Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, welcome to BWX Technologies First Quarter 2023 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.

I would now like to turn the call over to our host, Chase Jacobson, BWXT's Vice President of Investor Relations. Please go ahead.

Chase Jacobson

Hanna. you, Thank welcome and call. Good to evening today's

me LeMasters, Senior Rex President Geveden, Robb and CEO; and Vice Joining are President CFO. and

presentation call, website. today's of the we reference section that earnings Investors the on is the On of available first will XXXX BWXT quarter

discuss provision that constitute also company's investor and found involve in These forward-looking in described SEC matters including the uncertainties, the and those certain filings. the will statements. statements We risks Safe Harbor materials

GAAP Investors to in financial can measures, the which of We earnings the BWXT will frequently the reconciled appendix discuss non-GAAP be are found section website. measures presentation that on the of

now like would to call over Rex. I turn to the

Rex Geveden

Thank with that quarter Chase has results good Earlier BWXT ahead strong everyone. started good our of first you, were XXXX expectations. evening today, and to momentum. we reported

that to their highlight that more becoming is nuclear as our commercial BWXT and requirements medical forefront government in demand solutions. at clean apparent industry, nuclear with of high address wins and recent national seek Our security, the energy, it's and our are technologies the clients

Technical higher despite up fees revenue volume, First was adjusted good EBITDA by first compared performance XXXX to X%, ongoing the operational labor and and challenges. XXXX was quarter our solid line up in of quarter Services XX% business driven performance

anticipated. Adjusted than had adjusted non-operating earnings offset as as per more items share EBITDA the we growth grew X% of unfavorable impact

long-term guidance sustainable XXXX maintaining financial continue BWXT and growth. to are for are We we believe positioning

outcome. guidance macro to year the Accordingly, per a see of uncertainties had we quarter, While we EPS most as the of the $X in are strong first environment. $X.XX our likely share midpoint and early we persist in still the still

number have that in where there of how growth bearing fruit. some government I'll our start been with are highlights investments developments out highlight operations, a

which States UK announced the First Minister was is early the the by of and AUKUS the and Security in Australia. United President March jointly Prime Agreement, Trilateral the of

Virginia-class five up early at submarines will XXXXs. least Australia to agreement, three procure the in Under and the

Australia industrial will the a submarine procure thoughtfully these class, design for years new investment and the to manufacturing be that, build SSN-AUKUS, final in will Following necessary planned ahead. which the units

updated for XXXXs announced will to Navy that Virginia-class the be that the replacements Australia. as submarines additional recently XX-year plan in those anticipates sold The shipbuilding indicates building

yet and worked with the and from believe the BWXT allies, a Although this has fleet into the well Congress. submarine schedule, decision-making planning this goals more by we stand be Navy's our to published will aligns long-term the comprehensive thinking for Navy, process

I first and backdrop believe Naval scope both and in but of Controls will US naval Dynamic are strong visited valves, engineered companies precision we are fittings tailwind a and also the BWXT, both navies. This spending to ago the UK quarter, propulsor be highly and I they supplier base moment, Right expand strong at proprietary our prospects to parts navies. the both important the Cunico US and of most unique and our service one lifts needed. manifolds a is UK the could made day. franchise at business the the acquisitions for good year to almost suppliers two

found tight, a efforts In ways workforce. focused first to ability slower remains performed hiring The limit could of our staff and to the last than first demands hoped. staffing starting well programs. work quarter, a the challenge grow intensely the market quarters, we While our despite government and operations few to continuing in our similar little efficiently the on are we to remains to labor we quarter,

our BWXT the see workforce, multiple have term. for quarter-to-quarter naval noise There and over hiring modest we streamlined last near began kick been in recent margin we to year positive training experienced we outside months this that integrate As the and over processes in developments business. performance implemented may the less in

we April, two major announced awards. contract in Specifically,

First building Phase services, phase for and the X is hold million uranium these materials that ability purification shows pilot on in of a critical the $XXX conversion Administration year. award to the X from on We Security contract with and Nuclear we and National five-year completed programs manage special only to behalf. confidence NNSA's work handle and Category the execute last BWXT's license its

the contract, a in contract potentially group will single Technical joint was Department early our XXXX, in venture Also Second, XX-year disposition government largest the Energy. Hanford tank services BWXT-led the contract This awarded One integrated transitioned completion the performance be excess business. by onto of in Services the forecast. safety continue Mission same we our with into contract of to the this we receive contract alongside excellent in original we year Hanford. Savannah team and partnered at River are scores

microreactors Technologies our and to Advanced business. Turning

associated We this year. the United States. be are The and will $XXX to the Strategic capital called our contract Capabilities Pele, the schedule on revenue. progress in complete mobile million generating with Project deliver expenditures advanced making on Office good is nuclear The first build reactor and largely contract

to strong continue in DARPA's project, a We on rocket ourselves a the of position demonstration engine thermal first in Dreco space. nuclear

significant budget year to XXXX. expected for project funding based request receive a for on fiscal increase this is in DARPA the President's

kick-started government also interest a commercial markets of commercial industry number investments reminiscent growing the programs to in applications seeing a in know are as reactors of markets. that exciting advanced XXXXs nuclear commercial This it We the opportunity is we enable the for reactors across naval for nuclear today.

established stand position transition other clearly and support position in nuclear naval we the applications, a power clean energy ready for global leadership efforts space, and applications and has BWXT and to to domains. in enable propulsion to terrestrial, nuclear

operations. commercial to on Moving

nicely and nuclear life of Canadian extension core by grew and in the reactors driven refurbishment power fleet. in projects performed on an quarter, first increase the number a Our well in business

another for lives XX the operational quarter, Pickering which five potential mentioned these reactors, last on of Ontario I feasibility As study of units at launching years. the the refurbishment and announced of extend its support government through plant eight is operating a would these reactors extensions

interest new as positioned it the player deployment while small and exploring design and potential see our the seeks Additionally, the in early for natural modular eliminate given key reactor experience grid reactors by in components. to nuclear power engineering, we continue very from are the as and strongly growing stages, still the a gas large-scale And manufacture to government XXXX. of is

on contract expectation reactor announced of first Energy the these Tennessee publicly in our with Canada, expressed a Energia at constructing interest for Fermi Generation have these the pressure Synthos of consisting Hitachi's grid of engineering Ontario end utilities, decade, is formally for GE have scale four vessel large Estonia as by modular utilizing and the Poland Authority, project Hitachi's We site in Green the reactor SaskPower reactors completed of Valley the in small BWRX-XXX the and to the including Darlington Power GE the Other reactor. up well. to and grid

or excited as are opportunities new design a for merchant we for our in about and this execute multiple technologies as build We and developers the strategy the supplier small other modular manufacturer reactor market.

continue on manufacturing, manufacturing business for player quarter XX% layers market of Turning is medicine. XXXX. the diagnostic which term, to our base over we In focus growth in will revenue deployment. radioisotopes and drug as contract isotope product a had tracking a later. additional solid on The Tech-XX to full-service isotopes, of organic nuclear with Medical We we near in and BWXT face touch therapeutic the a

identical with today. generator a fully superior is to on product at be essentially to XXXX scale the commercial in goal or is ramped that Our those market

The application. in for early we our and believe drug a in of new on FDA the March, inspection factors a pre-approval good conducted meeting approval we Canada handle have gating

target with give bring prepare in-depth delivery confidence to we necessary important given schedule. our me work the commercialization radiated MER ongoing our runs and for with FDA completing team this have depending to enhanced discussions in data are system supplement with February, And data. to the FDA. product filing We of approval on This installation will now the market the OPG and sample that the the our exchanges

have procedures forecasted and critical stabilize tool year. We diagnostic every of this with the and nuclear medicine ecosystem in helped used thousands foundational

work like approved. we actinium to are of pharmaceutical innovators ultimately lutetium the quantities towards active critical to commercializing support drugs if and also therapeutic sales that in their fully we companies scalable pharmaceutical Tech-XX may As and trials product key give ingredients see expanded therapeutic clinical continue in XXXX, and way

drug proprietary therapeutic Scientific's several of would beyond that discussions expand called business that on for meaningfully drug today we contract our component in Boston manufacturing, do cancer-treating are involved what And TheraSphere. we currently

cash up, year. labor are challenges growth are on Despite and To business, of flow sum XXXX inflection adjusted are start excited the it Core facing single-digit high and we us. ongoing ahead long-term Navy off a we near- in and for in to meaningful good track robust EBITDA the that this a the we about free in opportunities are

our to pathway We across financial are a and clear the targets. providing organization, strategic growing medium-term

financial over results guidance. me the Robb Let and to XXXX discuss it in quarter detail more discuss to now to turn our first reaffirmed

Robb LeMasters

everyone. evening, some good X with and Rex, Slide I'll highlights financial earnings of presentation. Thanks, the on total start company

First revenue basis X%. on operations X% consolidated was X% quarter government operations up with a up and Commercial up

and up EBITDA Commercial margins corporate This as the driven XX% revenue million, higher $XXX Government partially to operations expected. was in lower First higher from quarter a slightly offset expense contribution better is adjusted by operations. and by

the higher EPS offset mostly per X% interest EBITDA lower and grew Adjusted strong pension expense. share adjusted as income to $X.XX was by growth

quarter. and an detailing on the have EPS puts bridge We the Slide X, takes for

taxes. were million in as mostly of down $XX the a the modest seasonal the CapEx government capital to year to related contracts a in quarter long-term in We of build and our to as spending million, million with Free line $XX cash had expenditures cash generally flow quarter, to Capital use growth first operating working was use initiatives. early well of compared of modest use a as maintenance cash in $XX higher of related XXXX. operations consisting patterns

million, that higher Moving nuclear and first production to In the results by offset partially by material. Government lower segment was lead component X. operations, Slide $XXX was microreactor to volume quarter driven up long on now X% revenue naval

revenue, First of quarter technical services and performance in shortfall as up year-over-year XX% was mix to by the due adjusted staffing discussed. million EBITDA $XXX higher favorable inefficiencies segment was to Robb offset fees timing the

medical up In service increased by business, in X%, higher activity driven nuclear BWXT component and operations, manufacturing well revenue revenue. our as field higher Commercial was as sales commercial

outage This operations work $X less field First cost ongoing revenue approximately activity skewed the by down was controls and refurbishment adjusted offset EBITDA last as toward in manufacturing component was compared quarter and year. was partially to service million business. Commercial

guidance X. to now Slide Turning on

quarter. reaffirming compared key last metrics about XXXX the mid- up guidance organically to of five we our XXXX single-digits to are We results. provided We project high revenue for billion, $X.X

of million, entirely almost driven up by We expansion organic XX%, EBITDA margin about expect modest leading to high to approximately XXXX, to growth. compared EBITDA adjusted $XXX adjusted single-digits

growth EBITDA we come As to business, processing provided of discussed Navy our expect of of non-nuclear last guidance on quarter, lion's detailed the when recovery Core components. manufacturing our including estimated we from we costs uranium the share in

wins full as The Hanford second driver a our XXXX such is and announced such River of And services are the awards a contract recently Savannah year growth from other third underway, wins new as is business forthcoming. and that are Project we we bucket of from Tanks in Pele. mix of believe

as expected Adjusted XXXX and is be by such we've expense, income lower pension interest EBITDA of higher in offset quarters. the last to with what discussed over couple growth non-operational consistent items,

such, and adjusted of range around per income the million to pre-tax $X.XX As adjusted in $X we $XXX expect share. of EPS

hiring our swing and look XXXX the the in timing potential This training new on biggest financial remain to our and likely reaching targets, non-nuclear to we forward, be position we confident push and employees we components enhance in in of factors will our guidance. the recoveries cost for future. workforce our will continue As

essentially the the naval and expected QX basis, now to quarterly our later QX previous QX compared forecast. timing expenses driven in we hit thought manufacturing would. a efficiency, performance on was to fees we of to forward, by look TSG expect originally Looking how outperformance we year,

did be Otherwise, third when We expect we quarter. start we to the by year. the the year the first that as EPS and essentially at gave will increases of full play of guidance expect QX out XX% guidance about subsequent in now we year fourth followed the midpoint,

flow, and of clear cash free a flow cash on expenditures. cash our $XXX Finally, flow we path capital to Overall, as see we BWXT achieving drive us portfolio enable position and strong successes financial targets. manage million operating is across growing strategic of positioning growth medium-term year the that and competitive achieve building on is another operational accelerate our and to and more

And taking forward with to look that, we questions. your

Operator

question The Instructions] Alembic first is Pete line Skibitski the from [Operator Global. of with

proceed. may You

Pete Skibitski

Good evening guys. Nice quarter.

Rex Geveden

Hey Pete. thanks

Robb LeMasters

Pete. Thanks

Pete Skibitski

on a a you're Rex, maybe sense some maybe first you XXXX? like balance you net basis, what labor net us the It in a goal how the the quarter And you're then the sounds could is were? trends on Can of short hiring. quantify little give of that short seeing. you

Rex Geveden

new get Yes, me that, the bringing Pete, sort question. and thanks thinking hear too Maybe talk it. to specific on Good you. look of about at cleared, how pipeline know. because people and won't a you that, for as doing about the I of build the checks process into employees business, those we're have let all but in When lot you there's of we to getting a it, background would including steps the people

So, those think the getting through -- business, about steps pipeline think the we of conversion filling from about those we having the pipeline, end through all -- rate the gates. all

the workforce. retention of of then, the third And there course, factor the is

of that, first of the I taking kind before And I two. kind mentioned so out of we some and eliminate got step, give had think pipeline the time sort to us I A and processes on call, on conversion the against leakage of to call worry an a you've trying that Kaizen done the previous steps, sort for each optimize about that. to of event and the

right got process really we've think the place. I in

we pipeline we've it than lower started than upward few little up. so a had the filling had a over little we seen been past weeks. And we've -- inflect anticipated, that but We slower

pretty good feeling I'm where so And we about are.

about is a The We conversion time that's hundred of retention moved of voluntary favorable basis is is well. couple the and direction. pipeline full. as the So, year, approached last pretty favorably going in nearly The double-digit it turnover part had good. points rate this

less leakage there, too. So,

a say behind shape. little good I'd but in pretty bit So, schedule, generally

Robb LeMasters

us peak a Yes. The basis. the of are that I'm on and on for Maybe of the showing potential really I'll the pipeline, funnel that starts. pending track just build pending the add you something about at weekly as there clearance that have in as employees it, numbers well way top through getting then adding daily this because level looking people statistics we to as we probably the true through, the -- is, Pete, Rex quickly said, and we're as process of just

room moved And of and those through look built trying shortly. really of two pipeline we're So find number, to. to a I classes hundred couple those the at people, when we that's for that here that

attrition they employees retirement the to kind starting you of to as into progress Rex things employees you talking turn the coming calendar, is dealing kind getting you have second different do you year, generally is bonus activity before also with funnel in been first, we've that on decide a in the that new location quarter. and a -- of happens the and to get So as move really and about build. The different know, all

back had rates. that seeing So from double-digit the there, I'm a seen kind also moving not toward of rate we but mid-single-digit couple way that attrition ago years back attrition industry-leading toward down of all that

turn we should those combination of So really if the two, be have the corner. we able to

feel happen same Some they're it way peers like pretty quickly. turning we feel that could and the our corner the of

that just And employees. that's little so bit conservative waiting little for specifically come second how a develop new going bit to Those with as through. inefficiency. year we're the one see is to of reasons we're And and the of come the a quarter we do those on

a be could a positive hiring on the right just that if bit company. front strain the So QX. little we're for I could on put of ultimately

we're So today. where about we here excited pretty sit

Pete Skibitski

Yeah.

one, ask like I'll Okay. It just some there. sense. That real there's one momentum last makes guys. sounds And

your expect now. different been anything to on And guys quarters declining order you from new re-upping year happens? four Are of it when we order? or kind next Just should three that close it's for backlog, government five

Rex Geveden

think more same, I could the expect Yeah, Pete. of you

through We are still working that process.

obviously, next deal then So, there. some there inflation we're or complicating are got details. of nothing set the also through, agreement, surprising We've are some of commodity full trying inflation, negative around that discussions going a time and on this in acceleration. to and some labor There working components Colombia factors with through pricing

we'll So through we with near and complicated have sort an a get fairly endpoint all to in it future. our -- of that those are the clearly and bit, factors customer

Pete Skibitski

you. color, Thank the Appreciate Okay. guys.

Rex Geveden

Thanks, Pete.

Operator

you. Peter Baird. Arment Thank with is The from next question

proceed. may You

Peter Arment

contracts? afternoon, through steady Rex, some Savanna. these state kind of of of service-related these Good us Hanford, kind awards of Robb, you maybe how kind a been Rex, expect do little Thanks. lot you've NSSA, to or of hit Could a walk pursuing up, ramp Chase. you bit on we when this

Rex Geveden

Sure, altitude When portfolio Yes. coming Y-XX had to rebuild change because into Pantex some you the in were rebuild last low portfolio point and off pivoted Maybe approached on business market, striking the history in XXXX, I to had, backdrop of a that We and equity with I really from I'll we success year. issues a it income business had over trouble. give Peter. sort think, we've pretty came the have contribution environmental million little this. performance and the that that $XX

we've that characterized like others. these like look it, and builds way large the And ones as when you business River, Hanford, Pantex well Savannah at

as below You as $XX $XX we're equity that can each, And those not think consolidating contributing you because million, maybe revenue. income. of in little line million more the up shows know, a

accretion we an business, one at so It's capital that's of all. reasons with right? EBITDA it. no booster. think that of the like get There's And And capital. as intensity this margin You

ROI And of so it's business. high very a kind

bunch, a in ones. smaller And of So those we've to you not of $XX big bunch -- contributors. $XX a layer but got a handful million then million got for we've

those Ohio Portsmouth, Portsmouth about the to in involved hexafluoride on OSMS, the from million up a a is in And called follow-on. conversion depending of those. a million be scale anywhere which We're and uranium maybe thing $XX Paducah, involved at We're would few environmental Kentucky. contract depleted

and builds for it us. builds think I So

a to really in recompetes the We of are strong the environmental on National back And remediation it, contracts. we're when into getting we're that pivoting Administration period in very the market. position side Security time of the now MNO Nuclear

Y-XX first, then Y-XX those Sandia recompetes and test then Alamos, Pantex are year to probably And the year site, Livermore, coming coming is a obviously, so at that Los out have by this -- And and ultimately, you'll next all there. is Nevada about out follow year.

built ahead. building So really have nice I pretty think It's it. really strongly, we're we and opportunities

Peter Arment

one just Is the you're just APXXX And work Appreciate them? having? there a those see so. week you any or just last SMR of conversations give to SMRs to on with SMRs, with opportunity kind one related was new do details. any quick out maybe updates in Westinghouse And Thanks. here then on you want

Rex Geveden

Yes. think, market we take say, don't is reactor script make, put market. our the long way I in have as I that I to that's generally. to to Peter, are the own pretty face Those would said the here, we a --

top like And so we that ourselves fuel positioned kind of services, supply design ultimately manufacturing, maybe thing. to we've the of and at servicing and provide manufacturing the chain, the component

the winner that's number so position position, supply in haven't and any chain. because in we're a of we the a And investments players. haven't that position picked to we And support in there, occupy made equity

work about public but relationship with. there with are GE, our others that been We've we

as we'd people one to their run who very of hoping market. the about and The certainly along a one in them talk And and And of legitimate who like so I that would build own with to in Westinghouse designs to are benefit things. for from quantities knows, large the participate growth market. promoting of reactors of meaningfully of those that growth handful really opportunities think those,

Robb LeMasters

in have as find we of because Peter, unique trends ahead invest really add develops, business SMR to We we stable had have some capabilities. these manufacturing position there. foresight Canada, maybe such I'll the Canada market a the of has should because Yes, excellent ourselves where in a

know, years. we had have the Canadian you the refurbishment. for stable doing that As been business we've They've

been of SMR and leader a servicing. really second an [ph]. And Canada then the selection has the of been that geo market that's we've in So of terms toxics part

ahead is look line CANDU at build all of some also and of obviously capability our of a And for So peers. us to now taking large-scale up plants. future Canada those sort backlog of greenfields

for So that's even us. a area fourth

So we're uniquely positioned in backdrop. Canada given that

that SMR And as so as Canada other help develops. as well designers market we'll

Peter Arment

Nice results. results. the Appreciate

Rex Geveden

Thanks Peter.

Operator

Thank you, from The question is CJS Mr. Bob with Securities. Labick Arment. next

proceed. may You

Bob Labick

congrats and afternoon, on the Good announced. Thanks. news you've all exciting

wanted So -- I yeah. start to absolutely, sure,

with the isotopes process Now I Tech-XX the want to with FDA. start

six think announced you about months review. the it's been since priority I

track relates year, steps you months So we next next just as here? commercially questions, next I I track cetera. to And What bunch hear to so on it a have you're What might know said launched curious, on the approval are has far? what process? of -- feedback but the the been six et the be you're over fully

Rex Geveden

We're as Bob, Yeah, on changed last perspective to I since that has much don't think we our in the nine-month discussed. six call. clock

of kind the see our we're pre-approval So by outcome to mailbox the inspection. standing of

a the regular FDA. the So tone has that with a a it. hasn't dialogue I changed. in in about that. good to with dialogue We're specific too we're FDA, But and won't be positive it

results the inspection. for by standing we're of that So pre-approval

Bob Labick

FDA, Okay, we And the still I well. guess, decide touched with moly think say or that OPG Darlington that you I to And holding is to like it guess, the go in time line? to should when pattern how as still -- approval you're about on there safe may is it, great. that

Rex Geveden

market But flux certainly good University limited with make because a to Research Yeah. that the was that on and have targets, Reactor. generators in Missouri clear. The drug amount small end, few get queries. side the we on of of can radiated down those we the question, that need we we at that reactor submitted a for there's that's offer subtlety on data the a to FDA new applicant That's a that targets

the offer spectrum the really that of where we move so is targets OPG need can radiation our targets. to full so of And we

reactor. that ahead a whether that at some move we FDA some been that at maybe are and now on targets we having internal our to get dialogue in Our ahead and of offering do are with irradiated XXXX go the been MER so the And and that discussions through go with OPG process as filing might and had forecasted. could and with with in, about irradiated faster first strategy the say, go full FDA product OPG, Darlington we've little a supplemental the and we supplement full spectrum to targets had part site with market

So that's we effect could the we'll going of on, And it we the avoid we it filing up. just if discussion commercial have then pull a that's a how approval, see and the that wrap positive offering. It might that but would off, could goes. in time supplemental and line be formal would on terms some implications full for

Bob Labick

plays Okay, OPG, as at but I and is least right? and guess, if potentially great. like just things with in sit moving That's planned, how all back ahead wait general, that sounds exciting. it not see are it we'll faster out,

Rex Geveden

we in Yes, standing by. a we're on Yes. feel good it, position and we're

Robb LeMasters

That's commercial with we right? Yeah. Verizon the to being view right line. got only on of Really, do that to full-scale if that the of you transcript. in why with -- as we ultimately a our was Bob. any product, if that path, would will, deviations Yes, we way supplementing we time or really accretive that data, But the that's focus

And judge. trying so that's to what we're

we with frankly, sure the we'll where can be in to so And that, make order market for bring the the product that in needs this of this communication FDA product.

with full-fledged we those ultimately to through that sure all get market want product. hoops the so we to the And present make

focused what on. we're that's So,

Bob Labick

now and TAM discussion shifting the just and period SMRs. And relatively for a Can of up you small then you, the and now -- it's on I Okay. going right and give revenue last kind gears what's on be just -- to for sales for sense but you following TAM? ramp right a us opportunity Super. your the mean

without next bigger year you single know year, you seemingly it year non-existent, I then like frame a opportunity almost or And a can it's much to a like year in that's the five and now, for set to then but was three SMRs years? ago, painting changing quarter. this

a it you out? how opportunity how big be period? of this think one, Just XX-year can plays in an five, And

Rex Geveden

Yes.

would in the think Hitachi on Let that vessel. pressure the are one. small me modular designing when on we'd bit try GE little say reactors, design where example, activities, one. you We're a be in we BWRX-XXX involved I the for reactor about

think that design somewhat for reactor. likely it's I we'll components other

is and and into then machining our to from course, our plant And operations more manufacturing would forgings, design, some ordering mean doing capacity. looking that of get locations goal Cambridge to other move which at expand to we're

front of on And component when so you of sort plant, on design really the the and about the occurs time on manufacturing developmental -- think cycle a the end that line.

So, a the think about grid. on of OPG timeline, reactor think when get it, first seven you or the call let's to eight-year one that

back half that it. kind the are sustaining in with activities mainly of activities our on -- of half say I'd the the of So, in sort -- of front some in the

said So that particular $XXX million our think also reactor. reactor, about of scope for we we and is -- that -- per

in if up four behind three I of goes scale couple to the a of but sense can the would up to four-pack a one, get there, certainly call a feather each that's second years two, would OPG think that first let's opportunity. the units So and you utility. that of it,

TBA looking on going by could a years. assessment I And environmental They're then see the the the OPG -- at doing other ones, reactor that that. and three an by Clinch right of one through of one that some studies couple now lagging is following at same River.

part today, in -- so on maybe up it unlike substantial a I of it Navy Canada to layers It's years come. business. going a not business in put our commercial cycle can't a and but just our that it's way, So, think very to be in could it long layer number over our I business years.

Bob Labick

detail. you. super. the Thank Appreciate Okay, extra

Rex Geveden

You're welcome.

Robb LeMasters

Thanks Bob.

Operator

Labick. Mr. you, Thank

Suisse. the Credit question Scott Our next is with line Deuschle from of

may You proceed.

Scott Deuschle

guys. afternoon good Hey

Rex Geveden

Scott. Hey

Scott Deuschle

prepared Robb, briefly is something adjustment you get remarks in touched this that guidance the you'll assumption equitable and contracts. on certain an on

you is expect think think why on baseline get maybe but us that well, in you'll quarter prior to for this I guidance your when you the as in just it? receive timing

Robb LeMasters

for Thanks Yes. the question. Yes.

brought working tracking program. the that it to to So last with working adjustments, with get tubes that true that up missile and we're is the specifically in customer, Navy quarter, we equitable

to a you year, a changes been contract shores. essentially took that years, U.S. couple the last that we've of interest know, we've capability our with different of at been past charge little worked we that standing in made have of the $XX expedite million. up for As bit to customer that And contract over frankly, just on

that, their and sure did all to that plans. We time that all within make work was accomplished on

as is to wrapping ultimately be that actually months. now couple shift contract here up. We'll so our final next in that wrapping tube up, And of the missile plan we

And so only to pain contract. the circle but time past years not of that of we've on last that year, where that the on in we delivering we couple that's the back charge took need experienced that

so with And itemize to working to the those find them way We best very changes, solution. we're be figure to that out customer trying to a find try to reasonable.

that's we when little so process That's the through that hits. going wanted on where exactly now. not bit timing. And that of the right of sure a We're we're flexibility

Scott Deuschle

this they is trending the point it. will item And this Got on at actually some this you favorably. relief? then Like there's customer give with suggestion that the specific dialogue

Robb LeMasters

discussion constructive. right. There's That's matter. legal has always The a been

in the get like going other They've I'm in suppliers But is feel I not to paid So different it. instances. of front good. definitely communication

credible parties. know we they're that so And

So there. yes, something plan get to we

Scott Deuschle

before you from give an can sense and just Okay. what us won a you Tank, and sustained. protects because on outcome protest it protested got And unfavorable Hanford this award did award for this then maybe Rex,

as we next do like, in the upside a actually award way curious for analysts we this evaluate anything the of kind can, how through government's RFP feather that that the to rely change of just So EBIT design in to responses or will RFP year? BWXT

Rex Geveden

received Scott, of little here, have government What the speculate registered. protest the see was minor last protest award and Yes, withdraw scope but to rethought just that was And I from a some time announced sort the was to bit to there. that the last correction -- scope case, and a a wasn't sustained. $XX In and position billion decided there what The one happened you its the that's time billion. we it. $XX reason at add award was the additional going

change the on So significantly pretty they it. did scope

dealing -- have I would for complexity Who can with come that this a experienced team. -- strong say a protest the then them with we're and very say with would some And dealing very we certain. we're out? in how

feel good so And we about our position.

certainly the hopeful that conviction are award. We has customer around that decision

this The quarter actually without that year. this a River one we protest survived the same is award before that before year, this we assembled for one. about time about last on Savannah team have -- the That last that quarter team

And it so that about protest uncommon a hopeful. through this quarter, time typical. periods. to on is would for not certainly scale contracts And the be line by we're It's go delay does typically, what

endure to prepared we're certainly So that, outcome. but about the hopeful

Scott Deuschle

second Robb. question to expectations? last then Anything just And Okay. for quarter offer housekeeping flow on cash

Robb Lemasters

the than negative higher employees payments, over QX QX. with haven't deal the higher have over flows. fourth larger We of retainages our building cash either third it's of the in specifically course QX build negative tax and bonus quarter. And sort we as year. built, to being But it expected flow definitely then quarter be we guided -- as slowly always will was we're quarterly cash But slowly payments the are to first a that know, the you

Scott Deuschle

Okay. Thank you.

Operator

line Ciarmoli Deuschle. Thank is with Michael question Truist. The you of Mr. next from the

You may proceed.

Michael Ciarmoli

kind resources? it Is what Virginia for these are some is Columbia guys. out new on? Just, sort heads results it most need question. labor up, for and maybe new the class, working guess, more and awards evening, the Thanks the of taking good programs or you're butter parse bread front ramping of you of Rex, Nice you Hey, labor can programs what commanding the and within on I Government, specific

Rex Geveden

It's Yeah, course, all a the in ramp, concentrated the Navy -- would above, two it's Mike. is always combined I of and Columbia with actually then, Ford programs, say, it's component where we've Virginias, the obviously, got, present there. of our

challenging. sort than whatever have this And that side. Canadian problems just So reasons, the on growth of for has been of U.S. the been on in that environment acute side the post-COVID more we've had climbing hill macro

we say business. on we up technical on, the been need do get to challenged engineering should the certainly prevail and pay more and for the we talent But go ramp. I'd example, we has that So around have talent we all away concentration are -- to Navy another

getting it. of arms our around growth but it's we're problems, all So sort

Michael Ciarmoli

various then Navy you're actually of from reactors sort I working keep class? track your Got the per are it. on the it. time Got hearing And on for Virginia you guys on we year, various delivering the But X.X. two on are chatter with know subs? they're not more you it's like

Rex Geveden

to wood, to our but shipyard have to day on to certainly shoulder Knock off into every been we've we've and put relative the path stay critical to critical it dates path. need that -- we able off Yes. tended stay --

Michael Ciarmoli

assuming to were mix, of Tc-XX. give a think they the driver part margin Okay. just And Is of there to The the profit any -- color then at tied multiyear out around other some in you pretty certainly drag I you I I I'm commercial. just maybe that those of guess, low. can there's but the terms shifting, a big margins, margins? And And called here pressure?

Robb Lemasters

it's Yeah, one. play thought was how what quarter the result the was going I'll with margin in line of in that much take we EBITDA ourselves terms Yeah, pretty -- to -- the and the out. it actually was Robb.

a The our first years. specifically of In look bit facilities quarter, the one business, lower Vancouver. us at outage in first experienced quarter medical you back always couple in our the we for significant is pretty if past a little

that's medical business. And know, so to the higher-margin a our sort that of And ability as grow business. you limits

outage. over didn't as first of experience the three quarter in So we that the as quarters, well the next in because a medical experience we'll ramp really

for were and about And we then second is again, the us thinking we with that in it. on factor, line touched which plan how within,

amount which field The work is services first outages other refurbishment work, a of quarter of services experienced otherwise. field even for or around really significant than us margin types lower

worked. that's how the So calendar just

do even mid-teens and where QX, margins. we As you experienced you at quarters year, can have look QX we check last QX,

be and flow as can projects as it medical the through different business ramps. choppy So through, as different product flows

first obviously So in we're had the first the revenue result about proud that we're worried too quarter quarter, great a of. not

Michael Ciarmoli

And it. housekeeping. then one Got Okay. last

Robb. heard I think you, I

EPS year. full XQ said XX% You of

quarter, track I puts pulled on and sounds it those like with So down just but year-over-year, bit sequentially, first back-end you benefits $X.XX, that of a guess, little $X.XX, of a down more had remains obviously, you, everything into more the ramp. loaded

Rex Geveden

That's exactly right.

EPS. Geo mean, pencils for happened things two quarter we where we in fact, In I the first -- how yes, in really actually that's really outperformed. That's was And we really had out quarter. business our first what happened what guided

Core the mix, we Naval business, good performance. and great On very just timing, had volume

So that the was in geo. of about of terms outperformance half

group, margin is fees great microreactor in performance in really the first leaves And well first from control as into that later there, second the other so which potentially the year you we because that's outperformance our Technology the going in That's as to absorption. get in you quarter then standpoint and volume building thought not second just where the just And and quarter, sort the you Advanced then we fell a the so of a the don't in as good is if of program. was hole a had quarter, the TSG will, expense feather first the we're over half pull-in, that factor.

and business as building. of that So ramps, that we out levels sort sort that of also see

on I'd our final an is then from that merits employee standpoint, say X. And factor the that just April kick in

second that increased strain workforce final grow we on bring through which put that talked a headwind quarter. I the a And that's the ultimately just quarter. thing, was second then could in so about the will And as during

All we're goodness a So and right you're in be third build there. to QX badness we've line. and trying that QX transitory, the we are as for talked and conservative But little those just fourth quarter.

Michael Ciarmoli

guys. lot a Thanks Perfect. it. Got

Rex Geveden

Michael. Thanks,

Operator

The of from you, America. Epstein is question with next Ron Ciarmoli. Thank Mr. Bank

proceed. may You

Ron Epstein

Hey, evening, we stuff has so A can go. yes, a of of far, lot couple guys. maybe asked been places but good

Ukraine forth, that kind going things In happened that coming nuclear other power that and of on are of the And what we here, you guys so new would of for on of you in be potential to down some the maybe terms Rex, great. what and should speak for? could post if looking of the awards are pike be looking in resurgence the so terms

Rex Geveden

business, converting the wins River, on of Okay. into Hey, we've Ron. the the targets remarkably many that opportunities we've pipeline, and past way, get Hanford, example. years, few And things multiple those worth Yeah, other to so and commercial go over nuclear it's the in for saying maybe Pele, for in by the had been Savannah successful us. side

foundation good that the really very we've about I built. feel of so And growth

we've award, my and feel I've because is When I'll we but a is here pipeline, you at look and we one. that for positioned been what DRACO for imminent, in believe quarters, risk else the this said well of saying the credibility couple

There's uranium is Portsmouth mentioned there. So OSMS, the that remediation this with out in in The with Energy. called contract earlier services, a conversion is pipeline. and environmental to one contract the has hexafluoride I do Department of answer an

Lutetium-XXX, medical I be agreements opportunities. active supply script, perhaps announcing potentially on at in and pharmaceutical or ingredients the Importantly, this and manufacturing side, contract around said the we'd other other looking actinium ones

There the large we and slew that projects meaningfully participate nuclear got very And whole mention new in new the other of opportunities a reactor the big opportunities become potential be deploying Pickering are new then reactor in the opportunities. it's We've -- should well-positioned interested in have. small CANDUs, refurbishment international build things. builds support commercial modular new we'd Canada that, to that power, to to builds not

So we opportunity meaningfully of there's to there. it. a And address have a bunch lot out an

So about I'm pretty that. excited

sure would part caught The question, repeat when second I it. wasn't you I your of Ron, that

Ron Epstein

No, there. got it you

everything of on that. You hit kind

what hit changing of recruiting have line personnel bottom costs? seen mean, do maybe you attract -- people does what them? But terms and have just terms your I actually how your maybe We've to gears. talked that do you in labor to of So And inflation? about people. retain in

Rex Geveden

mean changes. be to reflect worked to changes get of has try those out. backlog to that retain certainly high-quality our on will certainly kind right there agreements, cost certainly we kind Yeah. and any to pricing respond those of in But all and having seen Well, We to attract people pressure work, the workers. try we've of and right I will certainly we're relief

I to say have so bearing well. up we're And think it far, through you'd pretty that

results supply costs results are holding that -- the that manage we've and think and chain up our it managing to I well to labor been that costs able enough. point -- it's

wish you may Robb, to add to.

Robb LeMasters

No. Yeah. group. the to to opt really on had we mean I that front, supplier

backlog a already or when we pricing and to or because customer such we the on material look at out those race in the lock otherwise. risk the of We much As you we sign have have freight hedged one know, XX% our took plus down the the try of backlog agreements purchased foresight. about we of as supplies, either

really So there. good staying

Rex exactly front, right. the labor On is

think but in we compelling employees, the pretty our we've a we've always addressed what market. had heard for package I

As increases prior on I are just we and mentioned to X, business, that merit and the bleeding different the the we're into moving that absorbing we're absorbing the on. starting prior -- have at sites April question, that,

of basis on And inflation the ratcheting employees EBITDA even with the so type and hit to that we're pretty proud be able to earnings experiencing up. growth we're of our those on

Ron Epstein

does And And Got are there? seeing? deployment what all? look M&A looking it. out you Got it. any at are, guys front. it Are the And you maybe you how at if capital then on

Robb LeMasters

Yes.

always a maintain overall some There goal view lot with terms that changed to so that deals our core try we capacity. in has want our to and is to always of not some acquire within -- we our do So, franchises. dream

different prepared and specifically any stay of naval shake that those to we're assets on that the close we that. for could always side, So, if so There's loose hearsay loose those break situation.

we in nuclear microreactors, of medicine, Outside markets and growth that, have fuels.

tuck-in that of not time looking line always our looking of We're those most That's growth. of would we're would spending so to acquisitions acquisitions. add where creative another those. at most really we're be accelerate and And

growth growth to all that organic CapEx year, As year, you underlying is out then on and this of plus coming are X% setting and growth really can on see we an story last EBITDA really from our bear. X%, ourselves

So, businesses, our top, And any we're on cherry we plan to But do it. our M&A here is that not the Hail Mary on executing on will growth. the focused M&A organic core if do throw front. on

Ron Epstein

you. it. Thank Got

Robb LeMasters

Thank you.

Rex Geveden

Ron. Thanks

Operator

next from The is Epstein. Thank you, David Mr. question Strauss Barclays. with

You may proceed.

David Strauss

evening. Good Thanks.

Rex Geveden

David. Hey

David Strauss

this a -- opportunity. to it? So, -- quantified guess, equity it still get or numbers think to that of about you numbers? or I the And the that over Is as that million previously, is protested, this income for way that doesn't I even if $XX Hanford still near-term right does, had it what in have could do, you do kind And year? anything think if

Robb LeMasters

we million say -- to period think Yes. and years. XX tell I'll And be $XX XX total of how billion There years, you there's really, clear, a maybe some performance JV about headline the $XX headlines little was number for bit the was it. a of a

thing to one that's So note.

be second is does include scope $XX would outside The thing that the billion of or potentially that fee product earning ourselves. for

to billion So, of and we of run as annual $X -- a will our run see of margin the JV. build share with rate to performance to is it when And the make And into amount it sort winnow that. be that annual then what make then ultimately, you a on we some then that subject percent will a partners. so and that and we kind forth, down rate then this, we

to having that you be couple million the million that even us of it could this, perform profit. in would $XX And million when to to of opportunities pencil I We'll in who when significant do And next kind one would well, that years you getting be we math you see down, $XX say build of of could any on Rex -- of good to going $XX knows it's these math that. operating a upper can so to as inch about share the I this and that million. end a us BWXT say talked through that. margin over $XX of

David Strauss

of run And is helpful. then but million Pele? monthly to kind I of That's rate this, Okay, great. how missed Are $XX Pele revenue kind going? have that on you pacing might

Rex Geveden

have in on don't yes, we're fine, head, revenue going order. but specific it's I And that David. ramping my it's that a program. Yes, number

David Strauss

update longer-term special was on capital? that quarter, objective obviously, drag to on and to anything working down an kind bring maybe Robb, And Okay. the the big this a working of then front capital

Robb LeMasters

Yes. heart. dear and my Thanks. near It's a to topic

looking so working buckets we've three this been yes, at So really really in of opportunities. capital

We accounts have the front. receivable

billings. We unbilled, then by basically is accounts advanced SIP payable have our which the offset and

when just three that And we of and seeing all at more those, efficient. and out get so where charting of we're kind more could look we

about to and lining on milestones. we're the instance, thinking take how at for efficiency working so up And and billing we're specifically and billing looking related receivables side, milestones

we're contracts, don't And optimizing that front, and with vendor a more lining unbilled get on as of with to of cash. enough, and AP really just in we workflow efficient that have vendors On surprisingly the some payments the process up and working so side, we're our of portal building on we aware we're new the our yet, focusing on sign contracts. then actually being

operating year, is we we're income. when to flow control And which all through So obviously, working all up, P&L, hard, is, cash what about. you comes on heart those call three the which can that's really, this the leading other than the that. net working that capital frankly, That's

to been we've day, working the getting as the factors, XXs, combination we by low capital in path see each X.X of as we're the side, XXs. a the year days a those low really On

to million-plus or good I going per year we're back push working days days, if And two. that's be a by adding target X.X so a two to maybe And we take basically the each $XXX out year, capital. slowly think day

that incremental And step-up. see so plus we'll growth

David Strauss

a Thanks lot. Great.

Robb LeMasters

you. Thank

Operator

Mr. Thank you, Strauss.

question last Maxim Group. Our Sullivan from with is Tate

You may proceed.

Tate Sullivan

X last the And being announced contract you that when metals capability? about in Y-XX on relates to And the Can might terms of you. month? start? contract Thank it $XXX down-blending of you specialty million talk down Phase how

Rex Geveden

Yes, down Hi, the in It's has of stockpile the that it facility described bridge capability a Tate. in there. And contract. -- Yes. it the think we exactly maintenance it's activity. to it at as relates Y-XX DOE

in already that. on X are the We Phase

phase Phase contract our fact, modest activity had we we so of between the that bridge to X workforce In next. a have a bridge X and and -- Phase one from continuity would our

in motion. already in And -- already it's it's so

Tate Sullivan

very you Thank Okay. much.

Rex Geveden

Tate. Thanks,

Operator

are Sullivan. additional Mr. There at this questions no time. you, waiting Thank

further the to Chase Jacobson remarks. for any I over So will turn call

Chase Jacobson

at joining investor us seeing for forward you your BWXT. interest in and and you everyone, Thanks, today We for events. speaking many to of look upcoming with

at you can reach have by questions, or you. e-mail Thank If us any investors@bwxt.com. XXX-XXX-XXXX you at

Operator

Thank participation. conference. you today's your concludes That for

disconnect now your may You lines.

BWX (BWXT) 8 May 232023 Q1 Earnings call transcript