BWXT - Earnings call transcript Q4 2019

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Operator

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

now our host, would Relations. Kratz, like Director to to over Mr. ahead. go call the please Mr. Investor turn of I Mark BWXT's, Kratz,

Mark Kratz

joining and morning, quarter call. thank for Good BWXT's you XXXX fourth earnings

described Rex and statements uncertainties, Joining President certain Chief yesterday's Executive Senior Financial matters the will and discuss Officer. and On in that President Officer me Geveden, those BWXT provision and forward-looking David involve Harbor and risks found including release today earnings Black, we SEC constitute are Chief Vice Safe filings. today's call, in and

We the the which quarterly measures, section website. Investors will presentation along are in of Copies GAAP earnings these of documents, our measures non-GAAP also materials. provide with on reconciled available financial today's to are

turn that it to Rex. with I over And will

Rex Geveden

the kept we against revised revenue results good earnings for operations my the the open the $X.XX $X.X billion with to These quality year Thank values per year for share $X.XX to XX% to you, remarks BWXT and of growth XXXX enduring mission dedication entire exceptionally and into enable gratitude and detail year. X% setting We Mark, the a outperform commitment our revenue successful BWXT culminating record highest XXXX. earnings more for fourth expressing of continue outperformed and products non-GAAP with to today delivered of and want decade. BWXT everyone. safe had results. and solutions to guidance I core in evident as to to team an earnings for morning company X%. by move record annual in up the a was per for as work we strong and share the safe attention The to success results hard Yesterday, importantly we quarter reported off growth on

exhibited segment as delivered margins. and strong continued the solid Navy Fourth the was execution by anchored performance growth quarter franchise and

be a we contract $X on agreement nuclear Ford year. equipment the received propulsion contracts billion we delivered in billion The $X operating CANDU commercial the margins approximately early anticipated NOG resulting next cumulative was call in to as continues strong power with cycle out XXXX. for business and through we the refurbishment discussed January. strong Laker for also in carrier of the by business the As products Energy closed nuclear multi-year The -Class the acquisition last on edified

this opportunities complimentary provide acquisition expand share this with and power small, market moving global forward. to will A favorable Although and larger base products. nuclear incremental BWXT customer

the we Unfortunately, than in is which Additionally, have Services would by fourth lighter were the of the Contract awards awarded not during good segment liked given Hanford Cleanup delivered Central results but protest another results Plateau solid still quarter company. pace under the we XXXX.

unique nuclear last week up robust pace opportunities D&E deal Portsmouth published can contract notice solutions. back and we future the pick the which to DOE a provide our anticipate we in for awards However, to we extend to of pipeline the of we look as intent

successful contracts. $X.X Group progress Let discuss to on to aforementioned making financial me by and business update of strategic of The give detailed on backlog landscape driven you results. before billion over David the awards the with we an Nuclear the call the of the turning the priorities Operations year record the are ended

those is to its the due off near assessment end multi-year Couple new, budget in future. which which X-structure in Navy is of published weeks our and fiscal we of XXXX. be our ago XXXX of President the year to the the encompass negotiations pricing the expect and anticipate kicking complete to are government two revisiting released the around request midst years agreement we We next

nuclear programs priorities. the and that from feel remain top Navy's generally Overall, acquisition budgetary are insulated among we annual the pressures propulsion

change President's the Virginia-class submarine only would Navy the in one request XXXX. procure late in which included a However,

understand While with we consequence don't to working acquisition longer-term this of anticipate an possible change. immediate impact any scenario, we from customer this our are

of continue the per we buildup long-term ship to planned Over contemplate of Columbia horizon, on a planning nuclear procurement orders a Virginia-classes two Ford-Class and submarine the five-year class cadence The year. propulsion sets cadence. carrier

production Nuclear continues continue trajectory. positive an propulsion to franchise small would Navy look overall a supplement the with So for opportunities. we we this to announced uranium will our Lynchburg Earlier other contract SA In uranium of for convert the enriched critical US proliferation from this NNSA high be to and risk the nuclear to high UMoly low of on or Operations Outside facility enriched fuel. Group lower of ways uranium. month, remain from research capability a portions refurbish molybdenum and future reactors future decommission the to

fuel are TRISO the applications. now fuel and We supply contracts TRISO solutions and demands producing emerging supporting customer anticipate and of uranium defense ahead to on efforts We also continue defense forming progressing production restart our forward to schedule of unique move kernels. future this for for fuel consistent are efforts technicians space runs our BWXT's line, and

our complete missile XX% slower balance of work reserves adequate Lastly, or tube perceived. is roll in off progress continues originally tubes these and to to albeit more with About of XXXX remaining the on costs. welds XXXX are missile cover process. in repair than tedious scheduled now The

we're component In it of enter signs cycle, of middle the as the refurbishment of revenue refurbishment particularly we which the runs large Commercial Nuclear to the Power ahead as outages. relates manufacturing, stabilizing seeing Business,

of refurbishment activity. near-term activity with a give growth us along Our cycle. incremental opportunities and some in XXXX recurring The XX/XX to broader will seek product portfolio between revenues the inorganic were split products refurbishment acquisition Laker Energy about normal

several In Nuclear of Services, our over strong. the next pipeline opportunities years remains

aborted the starting anticipate this award spring you days a about delaying further of contract. tank in two in As award with of resolved contracts the the coming and in thereafter. work quarter were XXXX contract will XX closure under the We successful late are that know, anticipated Hanford Hanford protest believe be tanks

Beyond rebid that River the of Near-term Hanford opportunities our which is services waste Savannah expected to contract outlined evaluate team investor in opportunities we the the include continues other have briefing. liquid to two M&O line around be contract River Idaho to beyond XXXX we expected have opportunities sight be and of XXXX. awards are of end the that. the and awarded events Savannah

In Radioisotopes and XXXX. of growth trend the Medical Business, to last some expect late continue saw with introduction year the this incremental we products into tube we

addressing progress making some efforts moly-XX also while challenges. are We scheduled also moly-X, on commercialization

used and As that nine that of kits today. work we with cold-kits of in These We BWXT procedures North the results excess generator. utilizing including drop-in participants showing released American the in noted proprietary a representing as the replacement business' demonstrated the market will existing morning, demonstrated production labeled in Technology widely third-party all tested the we most market, cold-kits for today. XX-M of generators press proprietary moly-XX this of the the were XX% process technetium on the used labeling BWXT's successfully

The multi-faceted lines progress slower radio and Moly commercialization is now all facility make under efforts and chemistry anticipated. along manufacturing but than complete radiopharmaceutical to solid, contract. target lead are continue The items for

facility we first acceptance with a receive a Moly-XX the next also Kanata to month. cell test the of functional expect milestone significant completed hot at which successful We

around and pharmacy through line. announced schedule team However, the through against is radiation new to to radio second our plan to we morning. We past Research services regulatory comes regard, production agreement the challenges. hot working Reactor timelines. year mentioned also us required mitigate chemistry delays. order validation scheduled The progress radiation some radiation Missouri augment is had with to that development facilities In University as the that in from radio in the optionality utilize this material the enabling We services run MURR testing and for to of we

that provide with through we and the and an update technology expect on has and been are product But program success the the the demonstrated I we of and detailed to do these plans to steps risks investors remain final to automates work as lining Due to and delays, line. want focused crystallize. approaches industrialize schedule rebased we emphasize

Jim recently BWXT Lynchburg. facilities NASA Science Droegemeier the pleasure in of Advisor we Kelvin at hosting and the had Lastly, Dr. President's Administrator, Bridenstine

an naval the Propulsion and We Thermal reactors NASA update on program. provided our business, Nuclear

our Our advanced research nuclear and fuel additive manufacturing and activities manufacturing lines.

commented were people. of the and path Administrator Lynchburg. the demand the significant exploration. This national our the growing to security quality NASA importance to that some uniquely of is we all goes Mars space visit nuclear for very work importance nuclear that of impressed solutions we by exceptional they the in advanced stated the believe do guests of BWXT Bridenstine the and through and exemplifies applications magnitude most that Our challenges likely to meet and address power positioned

into the company is well exit for XXXX, new believe we the growth decade. As we heading positioned

outlook will Navy as our peak to be NOG the per driven bearing already nuclear initial new company revenue XXXX are growth and about we organic earnings for last Similar wins of X% by growth total $X.XX quarter, and about investments groundwork anticipate and line. strength XXXX fruit business franchise we the the and in we continued we and capital the the for product that for major share Moly-XX CapEx in capacity expand lay provided Navy in services. of Our a expect

turn will the David. to over that, with And call I

David Black

lead higher morning. revenue continued Group Columbia $XXX purchases, partially material our of We and down good presentation. witnessed offset X up lower Thanks another with higher earnings to with on Rex volume strong X% production Starting from Operations blending. long results X quarter and segment and through Nuclear delivered by million. slide growth

Nuclear $X.XX material. previous primarily quarter XX.X% for the For Columbia revenue operating the revenue a margin. grew full and in X% NOG long million operating Propulsion lead income growth resulting outperforming lead year guidance. our driven for $XX billion equipment the by XXXX XXXX, was NOG was chipset to

contracts. down more changes versus significant was which in EAC had fourth XXXX to quarter we backlogged This

the not we in an to EAC forward. by NOG operating and driven charges going a third for absence XXXX contracts income provided XX.X% operating For higher of anticipate resulting quarter Segment missile $XXX XXXX, XXXX changes annually incremental produced that some backlog margins margin to one-time operating occur tube full the million margin. that do the were in year than of

fourth and Group last X% Power decline activities $XXX we year, This primarily decrease a fourth that driven represents revenue XXXX Nuclear million Segment the quarter versus decrease X% compared in million field when of slowdown The non-GAAP service completion produced the was by a $XX in offset XXXX. with the and revenue at of lower quarter, quarter Service in volume more was a robust we component non-GAAP million the Field fourth activity income more XX%. as project. generator resulting the NPG was than of margin China operating than $XX.X anticipated operating steam manufacturing higher by anticipated. was

million $XX.X primarily operating also offset of of absence the by by the change in service in was of and XXXX activity income obligation and year margin increase a to from projects. volume, retirement the was year year, the component steam and activity lower China due field medical completion of higher last non-GAAP resulting $X lower Full operating in margin asset service China XX%. was retirement versus an an partially primarily full This This asset generator isotopes favorable XX.X% partially million field steam project. obligation up offset a that's generator

the offset that at of operating than Full contracts new lower and more costs Nuclear of year. were non-GAAP last load of And than versus year results down higher prior income was XXXX lastly, by more lower million, lower the $XX.X contributed other fourth non-GAAP by pace as in year a $X.X proposal awards anticipated that income million $X the driven were million the completions. contract from projects. offset was Services performance than bid result we and during year activity lower on by quarter, better period income as than Group contract about XXXX operating a

to now on company Moving X. results slide

of was offset NPG result higher XXXX quarter remains This non-GAAP $X.X. rate items, quarter and the non-GAAP lower margins, lower as partially A previous and As one-time tax with of increased X fourth fourth $X.XX than EPS to higher margins Rex year from in when account. margins a tax as EPS a XX% bridges lower XXXX in came year down guidance in record higher energy rate than mentioned, share higher page XXXX compared and strong, volume a $X.XX last a better XQ, by NPG a and our earnings outstanding. NOG EPS margins of last and on at shares result presentation. XXXX

expenditures expense. pension positives partially million were by offset up million, capital full interest were in with and expenditures capital XXXX. quarter higher year $XX XX% and These lower R&D compared $XXX resulting Fourth of income

the in payments. We in also $XX continued through to shareholders capital million return fourth quarter dividend

full year, in and we including shareholders For in $XX $XX returned cash over the in million share and million $XX dividends. to million repurchases

and share quarterly a dividend Directors $X.XX a the declared first to increased XX% of The payment recently Board by quarter dividend of per in payable XXXX.

generation about million year. million, the Gross of million ratio a facility. period. end with company's The year remaining was at strong million cash $XXX debt typical restricted and at net under debt Cash the the of of the cash a up fourth availability Xx. the investments XXXX net As balance just at $XXX prior of $XX short-term $XXX comfortable had versus at $XX.X totaled with operating range EBITDA to was credit a quarter, end existing below million

now Turning on XXXX guidance X. slide

are updating We outperformance the guidance relative in to our XXXX.

XXXX, total We in expect and the expenditures we company up with by versus XXXX. XXXX, therefore return to EPS In of $X.XX, our to X% guiding delivered nearly capital some to about levels year billion $XXX in be CapEx from XXXX. timing related year X% maintenance and revenue the we a consolidated approximately a up about of we are million push CapEx last $X.X $X.XX for experienced to out peak

Moving be CAS with upside still revenue to from XXXX. the are growth operating reimbursements. expect segment Nuclear Core operating pension about high-teens despite margins up higher expected guidance. to than X% in in remain achieving Operations segment We to expected

the you level. and want that I margins XXXX not contracts in repeat last than expect slightly as be to third to backlog the However, remind expected reported lower quarter year, that same benefits at we occurred to our the results to one-time

expected products. and we acquisition Nuclear margins about Energy are growth from small the be medical and growth X% to In benefiting to Group, Segment Laker Power revenue anticipate of radioisotopes to generator levels about normal of steam benefit we XX% completion adjustments as the have China will XXXX. in we related the of not EAC that the to of return project the received

services of nuclear million operating in Lastly, $XX XXXX. income anticipate about we

follows. to Corporate be contemplates remain expect rates year. unallocated anticipated other a this we $XX contract about interest an start good guidance X% primarily million. segment of Our revenue. to and for $XX anticipated to Due of Hanford of plans in R&D to of pension primarily million. related award as at operating closeout information other guidance benefit approximately XXXX, about and post-employment the successful expected to expense Other costs summer asset and performance income the Other tank is are in related is

an of anticipate XX%. We tax effective rate

share be contribute NOG amortization Our guidance increased an we about $XX with remain from provided million. expected XXXX expense are and at XX depreciation On and depreciation flat is Operations partially is expected expense. about to $X.XX X, EPS items count bridge. to million and to higher EPS approximately in shares offset slide NPG headwinds anticipated an volume by the non-recurring

We also And income items. offsetting expense and tax rate. interest CAS and $X.XX accretion expect higher other about from $X.XX effective of higher higher pension from of dilution an a

year guidance Finally low on EPS our EPS the continue results. we a double-digit slide reiterate XX, CAGR long-term to non-GAAP over to three five from of XXXX period

ask will that the questions. operator I with the open And line for to

Operator

[Operator Instructions]

go ahead. CJS from today Please Securities. first with The comes Labick question Bob

BobLabick

Thanks wanted specifics the question give start, context. just Good kind at to I it's broad for but little with morning. Hi. two want to I taking of a end, my a question.

XXXX double XXXX the Given which earnings in today you long-term that request for XXXX us budget And acceleration your in It the tell for one growth in pushing out you've about is reiterated Virginia information project. for digits guidance also and timeframe. and based certainly is you XXXX essentially that us moly-XX somewhere gave the class the President's could implies or XXXX. on in then low

earnings confidence and specify XXXX still didn't timeframe? period, XXXX having those how in time the play in accelerating you growth Although into

RexGeveden

We a on budget go President's long on -- I'll appropriated give Yes. an request a way a program. so from Sure. little Maybe Thank getting color to that. to you you, Bob.

not So this really our into at analysis that's juncture. factoring

--we and go vigilant if we're happen. two that we other that Although, things will Virginia pressure turns have out XXXX those into But coupled puts one If extremely where on one. exactly with to our procurement turns if are that some it to certainly delays, evaluate Virginia three scenario. -- on and five-year for

of lot overcome other However, those to content some problems. kinds that our strategy of of help there's in a can

NSG we NPG to that and have if grow. and growth be in two a growth lift, example unfold For opportunities things it so the those it heavier business but business certainly way,

BobLabick

And it isotope? moly-XX Great. the Okay. as to relates

RexGeveden

Right.

the have. you if at that the, portfolio look isotope So we

in one two that at that here that's last new We growing have of another year. products is I that script one the XX were Indium introduced growing. mentioned end oxine's of which the germanium

and out-year portfolio it robust that moly and that. beyond that pretty see we is is So course in of as then organic an growth or things add then to

BobLabick

bit project's you kind years successfully and in and that timeline delays. submit forgive a around can -- MURR just Okay that. submission talk more and already of FDA moly, to as working of demonstrated from not but cold-kit a And kind the you shift you knowing me labeling in then as little terms whole if or quarters about you've there's the you can with for since timeframe basic relates of a MURR the the then kind of MURR are what's of or delays? the and what delays everything, Can to sense us can the tie help all it

RexGeveden

But not a on is Power earlier Ontario the of let's track in we're material Generation work for what started some I an the that to regulatory to does way. risk much on to enables us shift. reduces sort shift shifting So it call with is to a baseline simpler MURR program. and MURR timeframe still mean radiating

us. for So against related target it's using a that's OPG. regulatory system kind good the -- think to any the open at delivery delays system of of that hedge And as at

moly lay programmatic systems system delay, delivery target is. the system the are In at structure three terms that the the moly what really the We here. have One that delivers that's sort principal the so involved OPG. just is in of reactor into production let of out me

then The our radiated chemistry standard contain of second then is Ottawa a This located that The line. series it line shielded chemistry through it take that's would Kanata, the into accepts. market into there's is thing moly-XX a the is out radio pharmacy called decaying in which one that's outside product which a on facility the that's And comes of take and technetium. chemistry dose we cells. and the generator radio do material and that line the the of that called we radio hot radio some technetium-XX the product at generator where where a vessel the we is

All of of I to those followed say target followed the of the hot it. degree delivery systems by a radio most and by has automation a the have -- of radio pharmacy would number part complexity. chem their radio And farm. The degrees is it mature of high challenging most system it. cells system that is that's

delivery related radio component the the to product The -- is pharmacy.

call So that path I the program. on the critical

they're schedule or think not be quarters, insignificant about probably a is, they're weeks As it I in we -- it certainly about delays, and think in good may or measured days delays like think way not of to that. think anything

have problems to with this, they'll do charge and is find -- as too. you and team need you -- you ways going and get we schedule like creative into ways that where of course, We you when the the are what to, improve as finding we to to and do

are its soon let as and we've to we're on the then that. and as work going clarity know got where do So investors team we let

BobLabick

this. of me Got are anticipating XXXX the that the I -- in appreciate and sales jump guidance, one back mean in. generators or you it. long-term tech in moly of XXXX? for I'll just still And you final terms having are still I and

RexGeveden

need get speculate Well, it's we yes, that, analysis. I to won't through -- our on

Operator

Suisse. from next The Spingarn Please go Credit comes ahead. question with Robert

RobertSpingarn

Good to little as more MPG Hi. going cadence a David in could morning. growth through NOG we XXXX. see margin was in you and if terms color us I give go bit of for

DavidBlack

we past. inside be will pension said for improvement NOG room reimbursements It'll what go. high with they've the the be our that was we as of been margins in consistent So for teens what

we change. anticipate that that So will don't

margins margins for there but if year in been have retirement steam So were normal. project little and higher generator we valued some we we remember the obligation things had at you, you that there inside the than a look to be NPG, caused past some had China higher this and NASA

going So margin of those XX% to said more back sustainable the what a we've is to year. that NPG go are for inside margins

provided. we've what that's So

RobertSpingarn

Okay. And we back just NPG if then to lower growth the in could year. go the for

because that's NPG XXXX? just said comps And year Bridge what's last from to has I of happened to you with think in it and happening -- XXXX NPG, clarify to want the the what growth. X% I do

DavidBlack

the year. refurbishment What we number to last continue continue year services those see changes is we on in the refurbishments place those last some outages think, NPG business take in and that cycle we we to we think I the We're to report for of and saw anticipated. of, outages see started I some a of of

also of outages we're -- those seeing some shift in Now out time.

forward. So outages we as go the some revenues changes causing are to those

RobertSpingarn

see. you that I over all of contributions lastly, CAS ERISA next years, sector. building since your the then recovery several how in particularly remind And we're the the out XXXX for just us for companies year trend can and

DavidBlack

that reimbursements amounts. in what show I saying continue CAS Right. we're strong now Yes. recoverable right our we is to mean

was next years for million. after and those And roughly that will it the CAS roughly XXXX, the fall For $XX will were they cost off. three continue

Operator

question comes next from go Arment with Peter The Baird. ahead. Please

PeterArment

up on kind CapEx of the David, Rex, on follow question morning, just to Mark. another Good the David Yes. profile.

incremental this was that some You that's anything the timing there million? Was step that $XXX so very related. sounds year much mentioned it's like of in up just that

DavidBlack

last quarter $XXX it $XXX out because we year, about Now and this now to and the up the million to we the remember for now pushed worked timing of way $XXX year talked roughly timing being we're than million year million. last had capital

about we you a million. into to look only you million, $XX up year is a to this $XXX so get pushed $XXX million that at $XXX the If year spent there's then million play last

at related point cap, is the timing spend not to capital this the causing us increased peak time. expenditures to all in mainly So

PeterArment

CapEx was Understood. that XXXX? Okay. X.X% I then And X% of to your maintenance valid believe still for still level Is sales.

DavidBlack

Yes.

So we XXXX, will for revenue. of X.X% X% be to to back the feel

PeterArment

And we're to your obviously how you so comes anticipation? -- that model. all much does XXXXwhich didn't What's it trying How in down?

DavidBlack

our Once schedule in moly project. the again lining rebased we're

will some what think XXXX. on need that going up of capital we're tighten I So to for

So capital in saying are it's our to a than first very XXXX somewhere happened between yet. maintenance today than high remember, the where and be maintenance we -- our be higher capital. And just we definitely It'll find higher it'll been months, for we level. six had

that So why might full capital some is XXXX. we're slip starting that's of year now saying maintenance in

PeterArment

questions And quick one just just on follow back is around the more a so strategy the of of MURR de-risking kind push was this is a just the overall of from from or in bringing of you kind it, back this regulators? Okay. just -- view the Rex it

RexGeveden

timeline. easy target at a was just hedge to doesn't from system. of get It back no. really It's the It all. pushed an exotic that regulators the the no, and way require MURR out way to regulatory have arranged we delivery Oh one against wasn't and in

have material fixture. a into able just put your be You to to

a for but lower to Canada us be facilities run So up volumes, able to way us albeit also it's it's frankly. production through a to for at ramp hot our simple way chemistry good in

it's nice So a hedge.

Operator

ahead. The Matthew comes Please Barclays. next question with from go Akers

MatthewAkers

question. the for Thanks guys. morning, good Hey,

on I of of much the might or forecast I isotope you missed I shift think is of you schedule of much how shift, questions. CapEx guess could finalizing guess And this isotopes? for it, that of have that that a isotopes, the latest up on so as the your in sort follow work is how through versus chance shift kind So NOG do yes CapEx on the sort side you've that there year? out de-risked

DavidBlack

much XXXX is we So into isotope. versus NOG of going XXXX how defined haven't

into the said elevated say NOG be maintenance of where XXXX but year have of the to of towards capital resides, we haven't I level was we is haven't elevated the but the have XXXX its that that of And it and maintenance capex isotopes We defined we of be we XXX the shift that supposed for will is the to as from would or capital which. at XXXX, XXXX XXXX, is NPG and of NOG which an for We're saying whose an also but of specifically it's year elevated CapEx. is inside stated said go is would XXXX level got -- presentation our there's XXX as about either. end investor XXX really lower, future an but XXXX. at it'll be in I still the It's XXX level

MatthewAkers

to Okay. of Got your of a it. get numbers? would one finalized before on the when budget, just impact did negotiations that And if the then sort obviously get case the the in Virginia cut really we class one I guess but budget Virginia-class lot worst if we

RexGeveden

a than began. mean but year funding impact in us significant the it The ship in out later minor this starts goes taper for in in time And got XXXX. the wedge of appropriations impact way starts imagine to would and in before on I nuclear on that to us the on the the three year. budget two, calendar peak sets. the those the to that if more QX fiscal start starts President year, because signed It all way. years then off theoretically of government later year mean I you done fiscal

Operator

Ciarmoli The comes Michael next SunTrust. from ahead. Please go with question

MichaelCiarmoli

two-year given a XQ not maybe stay just why taking that would get we signed on provided just for potentially that, Virginia-class October I potentially the Thanks CapEx know, would what timing it's Maybe to happen to sooner that that had And than capacity a and possibilities Xst Rex not to the guys. question. eliminate a in morning, more Good thought being your budget that off of lot place sequester. impact realm clarity planning. would regarding prior your Hey. the but I And deal President's but have a already basically years. on just budget

RexGeveden

Yes.

as CapEx two laid of and if any on occurs the the the out So through really because is when any going the Columbia's capacity through doesn't even four about two in point Virginia change shop Virginia in two going of would production math in tempo we're in chipsets it picture would into the point or any our Columbia. you time capital the a time. going we any time at having first forward. the capacity, handful maybe that And be it on the between continued way. expect picture it on the past, factories to that future. to we've and And we of completion accommodate tempo sort Virginia Because expect at as Virginia's the to think at get really in of we doesn't some able build one, on our A at And change Ford-Class terms state is. out appreciable margin Michael, one XX picture

I is so And running the way full guess capacity would of we're I kind it. at that put

for So that one Virginia doesn't us. change much

one that imagine on the change capital So one possibility based that Virginia scenario I occurs spending year. that that would we wouldn't our in

the election the October We I'm a terms or and budget not just whether of being budget a I right. certainly In budget an history year before we get cannot get by signed a looking in imagine deal deal never before deal, at can off President. election

MichaelCiarmoli

it we everything of the said having utilization overhead some what-have-you? just kind just the with just think else Okay. it's -- And to and of is maybe full Virginia not or given back then kind about capacity not Ford's just margin Columbia's and absorption at running just just under you should on

RexGeveden

it things course, we mean manage would on the in I occurs. an those all if certainly it Yes. of has impact, but margins of something

MichaelCiarmoli

timing comments on the calendar had is generating this should said level we setting not think or product line to is but moly XQ, I considering just terms more expectations. how this revenue of previously commercialization mean I XXXX still late said XXXX then ready XXXX in you like you days just for And seems quarters now? mean our about it Okay. a

RexGeveden

this about think want -- their is way Michael, do team I color the way tagging. out program viability with on absolutely until would around we say it the the addressed the technological just all any don't would let the questions work to cold-kit any that we've I maybe put

enough out Now well, going been physics The saying, materials doesn't the marketplace in have market -- we've got have who critics not the to activity. work. oh,

of tag and a going make a to that. you it it's bunch like nonsense never If cold-kit to

is And answered question a whether certainly it's the product so the whether or not on we've viable drop-in replacement. and

that We've So optimistic we from I and think And than have. all our into maturity, -- with large components into is the up retired we're and line product Kanata. nitty-gritty risk vendors drawings; right. program modifying feel detail these -- under hardware the just getting ever contract the standpoint sitting of converting natty and the can converting specifications all about we through final technological other here we the feel in taking see today this vendors these got thing more about that's finish technological facility

So we're of heat right it. the in

let I before these the but not about have again I'm characterize prepared right and do speculating date. readiness we do team than just to we any work just want further So now. the start delays that their to it

MichaelCiarmoli

Got it. just then housekeeping. one And

little late I a on What the think driver a was to you blending called down the that? guys but -- it going behind bit was be I lower? jumped was bit out,

RexGeveden

down QX yes. The mean? numbers Oh, blending you

MichaelCiarmoli

Yes.

yes. Sorry,

RexGeveden

in Yes. It nothing was that big nothing and just program the there. was timing

Operator

go from next with Alembic Peter The question ahead. comes Skibitski Global. Please

PeterSkibitski

of I meaningful both opportunities? the guys. then struck on think by lot if at set you about was increase reactor their may and I'm at the out the airport this at but, there's if kind in was wondering there's morning, of year mentioned point there? the of Rex, apologies guidance small for of magnitude And be I work. be was a for visits I and the Mars where guess think And reactors? anything I Good Thanks. noise. NASA. the XXXX DoD if I wondering I opportunities at talk we small quantify there all are nuclear could point Moon you you kind and opportunity budget the Yes. can And And reactor

RexGeveden

develop. continue Thank we BWXT and it take Navy question. space at said having on security an for to Pete. say to other a replicate pretty the And in Sure, to applications. exciting that any that think markets I that internally our other is I've Yes. of call as for such and national this certainly it'll while have interesting you said franchise opportunity platform

to to that that's it up President's the million. out for of all within way million horizon saw line goes the a we went for what then up and five-year and the it nuclear both of that terms power budget top-line was $XXX encouraging contained the and propulsion will you is nuclear request, NASA power In budget and a me if was $XXX propulsion. XX% over technology line XXXX And

call that those I over five-year haven't billion-ish $X.X a or that numbers better period. integrated but

part the similarly a do President's the solutions these Of called as budget surface but and for it's $XX there's appropriators the do said program is the in just DoD, with and what range on budget strong and I XXXX. authorizers nuclear in it line the they an propulsion. interest DARPA the coming that's And certainly and for on the White are conferences the for that, interesting of indicate, reactor in course, million rocket. does of power this Virginia, then early days DoD a will out funded And House in that in within one's request --

various seeing in we seeing it we're ultimately go it, dollars I we're so places. And that would say development What -- technology are would missions. demonstration occurs that and towards towards what

programs we're for there's production and type five-year be call let's timeframe nothing where it that multiple So in building units. shouldn't

in of in someone millions deeply think or opportunity the of else. got we if of for range into tens Maybe hundreds that's with a the I either rising few the BWXT, it's years. millions something of the NASA involved demonstration characterizing DARPA or over So terms next mission in

are starting of it. and So one green I'm of it's that to being see And the the seeds on playing growth we're here. around planted some shoots game long we're these optimistic definitely but

MarkKratz

we last will the now question. take Operator,

Operator

Akers is The follow-up Matthew question go ahead. Okay. Please last with Barclays. a for

MatthewAkers

bit for EAC? operations. EACs nuclear guess had Could little I you particular guys. comment good coming we for milestones be of may that here and follow big the on a up. Hey, Thanks Are there sort any

DavidBlack

No. I year. get changes every estimated we completion our mean

when they year QX those to because NOG. that through they mean and then of take from you to those Once quarter-to-quarter on those you could EACs; from we've year-over-year of backlog come it year. improvements run QX you you contracts So improvements improvements your year-over-year And inside come run the this contracts. next improvements I in then we it percentages completion those take through take said it's depending always could in difficult come to

for that happens So continually us.

a we adjustment is EACs we'll normal the but EACs out, that's the as something the in and an or while Now every our all through once go are there in business call those abnormal little for year. usually things

of End Q&A

Operator

to any turn concludes Kratz question-and-answer now remarks. session. over for would Mark conference our This the to like I back closing

Mark Kratz

you and our this morning. us call. thanks This conference for Thank quarter concludes joining fourth XXXX

me If call have XXX-XXXXX-XXX. please further questions, Thank you at you.

Operator

now you This conference attending Thank today's is presentation. concluded. for

You may now disconnect.

Mark Kratz	Director, IR
Rex Geveden	President, CEO & Director
David Black	SVP, CFO & Treasurer
Bob Labick	CJS Securities
Robert Spingarn	Credit Suisse
Peter Arment	with Baird
Matthew Akers	Barclays
Michael Ciarmoli	SunTrust
Peter Skibitski	Alembic Global Advisors

BWX (BWXT) 25 Feb 202019 Q4 Earnings call transcript