BWX Technologies, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - THE BABCOCK & WILCOX COMPANY 8-K - BWX Technologies, Inc.	a50186838.htm

Exhibit 99.1

Babcock & Wilcox Announces Fourth Quarter 2011 Results

- Earnings per share of $0.54

- Revenues of $800.8 million increased 13.6%

- Ending backlog of more than $5.3 billion

CHARLOTTE, N.C.--(BUSINESS WIRE)--February 29, 2012--The Babcock & Wilcox Company (NYSE: BWC) (“B&W” or the “Company”) today reported fourth quarter 2011 revenues of $800.8 million, an increase of $95.6 million, or 13.6%, from the fourth quarter of 2010. Earnings per share for the fourth quarter of 2011 were $0.54, an increase of 20.0% from the $0.45 reported in the fourth quarter of 2010. Revenues for the full year of 2011 were $2,952.0 million, an increase of $263.2 million, or 9.8% from the full year of 2010. Earnings per share for the full year of 2011 were $1.43, an increase of 10.0% from the $1.30 reported in 2010.

Recent Highlights

Awarded $600 Million Naval Nuclear Component Contract
Awarded $115 Million Naval Nuclear Fuel and Support Contract
Awarded $75 Million Environmental Construction Contract for NIPSCO
Selected as Preferred Environmental Technology Provider for Luminant and Awarded $65 Million Environmental Technology Supply and Construction Contracts
Awarded Environmental Technology Supply Contract for Xcel Energy
Awarded $44 Million Environmental Technology Supply Contract for a Midwest Utility
Awarded $43 Million Environmental Technology Supply Contract for Interstate Power & Light
Awarded Fleet-Wide Nuclear Services Contract for Progress Energy
Awarded Preliminary Design Contract for Ohio Class Replacement Nuclear Components
Acquired German Material Handling Business; Operating as Loibl Allen-Sherman-Hoff GmbH

Results of Operations

Consolidated revenues for the fourth quarter of 2011 were $800.8 million, an increase of $95.6 million, or 13.6%, from the fourth quarter of 2010. Nuclear Energy segment revenues increased $52.9 million, or 110.5%, primarily due to a significant CANDU nuclear reactor services project started during the quarter. Power Generation segment revenues increased $48.2 million, or 13.3%, primarily due to increased activity for environmental equipment projects and waste-to-energy and biomass new-build steam generation systems. Technical Services segment revenues increased $4.6 million, or 16.7%, principally due to new environmental remediation, decontamination and decommissioning contracts, primarily for the U.S. Department of Energy (DOE), that were ramping up during 2011. Nuclear Operations segment revenues declined $5.5 million, or 2.0%.

Operating income for the fourth quarter of 2011 was $93.3 million, an increase of $18.8 million, or 25.2%, compared to $74.5 million in the fourth quarter of 2010. The increase in operating income was primarily due to improvements in revenues and operating margins in the Power Generation, Technical Services and Nuclear Operations segments, partially offset by an increase in research and development expenses related to the Company’s small modular reactor program.

“Recently, the Company undertook a bottoms-up review of the environmental opportunity given the recent finalization of the Mercury and Air Toxics Rule (MATS) in December of 2011. We believe that our environmental opportunity remains significant over the next several years as the industry is beginning to convert bidding activity noted in prior quarters into awards. In that regard, the Power Generation segment reported environmental bookings during the fourth quarter of approximately $278 million,” said Brandon C. Bethards, President and Chief Executive Officer of B&W. “As we look forward to 2012, on a consolidated basis, we expect double-digit, year-over-year revenue growth. We expect revenues and operating income in our combined government-related segments to remain stable at approximately current record levels. We expect the combined power-related segments to continue to improve, driven principally by the investment cycle related to recent U.S. Environmental Protection Agency rules, strong project execution and further U.S. nuclear services activity. Partially offsetting consolidated growth expectations is a cyclical reduction in equity income from the Company’s Asian joint ventures. Additionally, the Company expects somewhat higher pension expense in 2012 and an effective tax rate in the 32% to 35% range,” Bethards concluded.

Liquidity

The Company’s cash and investments position, net of debt, was $543.7 million at the end of the fourth quarter of 2011, an increase of $186.6 million compared to $357.1 million at the end of the third quarter of 2011. Seasonally, the fourth quarter typically represents the highest cash flow quarter of the year. In the fourth quarter of 2011, free cash flow was the result of strong operating income, the timing of payments from the U.S. Government related to fees earned, dividends received from joint ventures, and an improvement in working capital levels in the Nuclear Operations and Power Generation segments. In addition to net cash, the Company maintains a $700.0 million revolving credit agreement with $488.6 million of availability as of the end of the fourth quarter. The Company believes it maintains adequate liquidity to fund operations, which could include increased working capital requirements to fund internal growth, R&D programs and product and geographic expansion opportunities.

Conference Call to Discuss Fourth Quarter 2011 Results

	Date:		Thursday, March 1, 2012, at 8:30 a.m. ET
	Live Webcast:		Investor Relations section of website at www.babcock.com

Forward-Looking Statements

B&W Cautions that this release contains forward-looking statements, including, without limitation, statements relating to our belief regarding a meaningful environmental opportunity over the next several years, our expectations regarding 2012 consolidated revenue growth, 2012 revenue and operating income levels for our government-related segments and 2012 improvements for our power-related segments, and our belief that the Company maintains adequate liquidity to fund its operations. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, adverse changes in: the demand or competitiveness of nuclear power, government funding for the defense or energy programs in which we are involved and the timing, scope or enforcement of U.S. Environmental Protection Agency environmental rules affecting our customers. If one or more of these risks or other risks materialize, actual results may vary materially from those expressed. For a more complete discussion of these and other risk factors, see B&W’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2011. B&W cautions not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.

About B&W

The Babcock & Wilcox Company is a leader in clean energy technology and services, primarily for the nuclear, fossil and renewable power markets as well as a premier advanced technology and mission critical defense contractor. B&W has locations worldwide and employs approximately 12,700 people, in addition to approximately 10,400 joint venture employees. A company overview presentation, which will be presented at investor conferences and meetings throughout this quarter, is available on the Investor Relations section of our website. For additional information please visit our website at www.babcock.com.

TABLES TO FOLLOW


THE BABCOCK & WILCOX COMPANY
CONSOLIDATED BALANCE SHEETS

	December 31,
	2011		2010
	(In thousands)
ASSETS
Current Assets:
Cash and cash equivalents	$	415,209	$	391,142
Restricted cash and cash equivalents		61,190		12,267
Investments		68,805		234
Accounts receivable – trade, net		305,832		289,374
Accounts receivable – other		77,505		64,231
Contracts in progress		315,286		225,448
Inventories		107,298		100,932
Deferred income taxes		102,022		90,620
Other current assets		33,929		34,868

Total Current Assets		1,487,076		1,209,116

Property, Plant and Equipment		1,017,422		968,712
Less accumulated depreciation		595,131		550,400

Net Property, Plant and Equipment		422,291		418,312

Investments		3,775		74,863

Goodwill		276,180		269,424

Deferred Income Taxes		241,739		236,504

Investments in Unconsolidated Affiliates		163,568		100,811

Other Assets		194,482		191,480

TOTAL	$	2,789,111	$	2,500,510


THE BABCOCK & WILCOX COMPANY
CONSOLIDATED BALANCE SHEETS

	December 31,
	2011			2010
	(In thousands)

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable and current maturities of long-term debt	$	4,653		$	4,790
Accounts payable		237,494			185,240
Accrued employee benefits		303,803			235,856
Accrued liabilities – other		71,079			71,242
Advance billings on contracts		438,753			369,644
Accrued warranty expense		97,209			109,588
Income taxes payable		1,816			5,467

Total Current Liabilities		1,154,807			981,827

Long-Term Debt		633			855

Accumulated Postretirement Benefit Obligation		80,663			84,100

Environmental Liabilities		44,069			40,889

Pension Liability		586,045			579,000

Other Liabilities		87,921			100,314

Commitments and Contingencies

Stockholders’ Equity:
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 118,458,911 and 116,963,664 shares at December 31, 2011 and December 31, 2010, respectively		1,185			1,170
Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; no shares issued		-			-
Capital in excess of par value		1,106,971			1,067,414
Retained earnings		266,325			96,671
Treasury stock at cost, 351,876 and 101,649 shares at December 31, 2011 and December 31, 2010, respectively		(10,059	)		(2,397	)
Accumulated other comprehensive loss		(538,628	)		(449,999	)
Stockholders’ Equity – The Babcock & Wilcox Company		825,794			712,859
Noncontrolling interest		9,179			666
Total Stockholders’ Equity		834,973			713,525

TOTAL	$	2,789,111		$	2,500,510


THE BABCOCK & WILCOX COMPANY
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME

	Three Months Ended						Year Ended
	December 31,						December 31,
	2011			2010			2011			2010
	(Unaudited)
	(In thousands)

Revenues	$	800,789		$	705,162		$	2,952,040		$	2,688,811
Costs and Expenses:
Cost of operations		589,999			525,497			2,278,208			2,024,034
Research and development costs		31,878			18,458			106,396			69,167
(Gains) losses on asset disposals and Impairments – net		(3,713	)		(50	)		(3,087	)		38
Selling, general and administrative expenses		111,497			112,405			413,210			405,682
Total Costs and Expenses		729,661			656,310			2,794,727			2,498,921

Equity in Income of Investees		22,131			25,642			78,655			74,082

Operating Income		93,259			74,494			235,968			263,972

Other Income (Expense):
Interest income		331			295			1,342			1,187
Interest expense		(2,021	)		(1,610	)		(4,543	)		(12,939	)
Other income (expense) – net		(1,971	)		(2,914	)		2,168			(16,400	)
Total Other Expense		(3,661	)		(4,229	)		(1,033	)		(28,152	)

Income before Provision for Income Taxes		89,598			70,265			234,935			235,820

Provision for Income Taxes		27,558			17,231			72,982			82,294

Net Income	$	62,040		$	53,034		$	161,953		$	153,526

Net Loss (Income) Attributable to Noncontrolling Interest		2,232			(142	)		7,701			(264	)


Net Income Attributable to The Babcock & Wilcox Company	$	64,272		$	52,892		$	169,654		$	153,262

Earnings per Common Share:
Basic:
Net Income Attributable to
The Babcock & Wilcox Company	$	0.54		$	0.45		$	1.44		$	1.32
Diluted:
Net Income Attributable to
The Babcock & Wilcox Company	$	0.54		$	0.45		$	1.43		$	1.30

Shares used in the computation of earnings per share
Basic		117,998,268			116,615,156			117,560,594			116,260,425
Diluted		118,716,916			118,008,894			118,404,597			117,626,065


THE BABCOCK & WILCOX COMPANY
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2011			2010			2009
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	161,953		$	153,526		$	147,920
Non-cash items included in net income:
Depreciation and amortization		73,003			71,633			72,712
Income of investees, net of dividends		(20,854	)		(20,449	)		(4,450	)
(Gains) losses on asset disposals and impairments – net		(3,087	)		38			1,226
In-kind research and development costs		16,584			-			-
Provision for deferred taxes		29,902			33,457			29,535
Amortization of pension and postretirement costs		79,070			79,935			86,637
Stock-based compensation expense		17,927			16,308			25,891
Excess tax benefits from stock-based compensation		(4,083	)		(5,276	)		1,813
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable		(26,887	)		101,260			71,316
Accounts payable		48,246			19,882			(40,555	)
Net contracts in progress and advance billings		(28,746	)		(153,933	)		(63,879	)
Income taxes		31,961			9,239			10,740
Accrued and other current liabilities		(23,106	)		(9,761	)		(52,556	)
Pension liability and accrued postretirement and employee benefits		(144,802	)		(85,371	)		(378	)
Other		(33,490	)		(18,082	)		(33,149	)
NET CASH PROVIDED BY OPERATING ACTIVITIES		173,591			192,406			252,823
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in restricted cash and cash equivalents		(48,923	)		3,038			(8,189	)
Purchases of property, plant and equipment		(63,874	)		(63,649	)		(93,725	)
Acquisition of businesses, net of cash acquired		(11,907	)		(29,962	)		(8,497	)
Net decrease in available-for-sale securities		-			-			45,230
Purchases of available-for-sale securities		(145,198	)		(135,135	)		-
Sales and maturities of available-for-sale securities		147,288			134,276			-
Proceeds from asset disposals		6,468			753			245
Investments, net of return of capital, in equity and cost method investees		(38,176	)		(42,912	)		(2,700	)
Decrease in note receivable from affiliate		-			43,277			-
Other		-			-			1
NET CASH USED IN INVESTING ACTIVITIES		(154,322	)		(90,314	)		(67,635	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of short-term borrowings and long-term debt		(1,782	)		(29,914	)		(6,155	)
Payment of debt issuance costs		(82	)		(9,994	)		-
Increase in short-term borrowing		1,254			25,000			-
Dividend paid to McDermott International, Inc.		-			(100,000	)		-
Capital contribution from McDermott International, Inc.		-			12,501			-
Distribution to McDermott International, Inc.		-			(43,334	)		-
(Decrease) Increase in notes payable to affiliates		-			(43,386	)		2,368
Exercise of stock options		4,463			211			-
Excess tax benefits from stock-based compensation		4,083			5,276			(1,813	)
Other		(401	)		(93	)		-
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		7,535			(183,733	)		(5,600	)
EFFECTS OF EXCHANGE RATE CHANGES ON CASH		(2,737	)		3,315			10,234
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		24,067			(78,326	)		189,822
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		391,142			469,468			279,646
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	415,209		$	391,142		$	469,468

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest (net of amount capitalized)	$	4,525		$	3,746		$	24,728
Income taxes (net of refunds)	$	33,505		$	27,227		$	(29,663	)


The Babcock & Wilcox Company
Business Segment Information
For the Periods Ended December 31, 2011 and 2010
(In thousands of U.S. dollars)

		THREE MONTHS ENDED						YEAR ENDED
		12/31/11			12/31/10			12/31/11			12/31/10
REVENUES:
Power Generation		$	411,420		$	363,203		$	1,541,509		$	1,424,574
Nuclear Operations			265,703			271,159			1,043,185			995,969
Technical Services			32,113			27,521			119,711			90,147
Nuclear Energy			100,736			47,855			321,406			196,282
Adjustments and Eliminations			(9,183	)		(4,576	)		(73,771	)		(18,161	)

	TOTAL	$	800,789		$	705,162		$	2,952,040		$	2,688,811

SEGMENT INCOME:
Power Generation		$	46,372		$	33,869		$	140,029		$	128,278
Nuclear Operations			43,702			38,186			171,554			147,235
Technical Services			20,884			12,465			68,239			45,614
Nuclear Energy			(10,407	)		(2,677	)		(118,748	)		(27,560	)
			100,551			81,843			261,074			293,567
Corporate			(7,292	)		(7,349	)		(25,106	)		(29,595	)
	TOTAL	$	93,259		$	74,494		$	235,968		$	263,972

EQUITY IN INCOME OF INVESTEES:
Power Generation		$	5,866		$	11,665		$	25,778		$	30,788
Nuclear Operations			0			0			0			0
Technical Services			16,265			13,977			52,877			43,294
Nuclear Energy			0			0			0			0

	TOTAL	$	22,131		$	25,642		$	78,655		$	74,082

PENSION EXPENSE:
Power Generation		$	14,901		$	15,517		$	60,710		$	62,047
Nuclear Operations			8,075			9,672			34,219			40,687
Technical Services			617			653			2,468			2,613
Nuclear Energy			1,128			924			4,472			3,547
Corporate			2,031			1,876			7,182			15,326

	TOTAL	$	26,752		$	28,642		$	109,051		$	124,220

DEPRECIATION AND AMORTIZATION:
Power Generation		$	3,892		$	5,579		$	17,264		$	18,564
Nuclear Operations			9,103			8,400			38,169			36,955
Technical Services			65			65			262			263
Nuclear Energy			1,393			1,246			5,346			4,988
Corporate			3,057			3,343			11,962			10,863

	TOTAL	$	17,510		$	18,633		$	73,003		$	71,633

RESEARCH AND DEVELOPMENT, NET:
Power Generation		$	6,907		$	5,903		$	21,325		$	25,715
Nuclear Operations			178			123			234			147
Technical Services			1,232			2,953			1,878			4,791
Nuclear Energy			23,561			9,479			82,959			38,514

	TOTAL	$	31,878		$	18,458		$	106,396		$	69,167

CAPITAL EXPENDITURES:
Power Generation		$	5,173		$	3,589		$	15,788		$	13,627
Nuclear Operations			10,315			7,488			32,082			24,718
Technical Services			0			15			0			15
Nuclear Energy			928			3,032			7,257			4,480
Corporate			3,461			742			8,747			20,809

	TOTAL	$	19,877		$	14,866		$	63,874		$	63,649

BACKLOG:
Power Generation		$	1,947,274		$	1,564,351		$	1,947,274		$	1,564,351
Nuclear Operations			2,995,364			3,151,353			2,995,364			3,151,353
Technical Services			13,756			1,181			13,756			1,181
Nuclear Energy			382,638			485,005			382,638			485,005

	TOTAL	$	5,339,032		$	5,201,890		$	5,339,032		$	5,201,890

CONTACT:
The Babcock & Wilcox Company
Investor Contact
Michael P. Dickerson, Vice President and Investor Relations Officer, 704-625-4944
investors@babcock.com
or
Media Contact
Jud Simmons, Public Relations Manager, 434-522-6462
hjsimmons@babcock.com

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