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.	a50369014.htm

Exhibit 99.1

Babcock & Wilcox Announces Second Quarter 2012 Results

Earnings per share of $0.54, non-GAAP earnings per share of $0.44
Revenues of $853 million increased 13.3%

CHARLOTTE, N.C.--(BUSINESS WIRE)--August 7, 2012--The Babcock & Wilcox Company (NYSE: BWC) (“B&W” or the “Company”) today reported second quarter 2012 earnings per share of $0.54 compared to $0.39 in the second quarter of 2011. Included in second quarter 2012 earnings per share was $0.10 related to the recovery of loss contract costs incurred in the prior year on a Nuclear Energy segment condenser replacement project. Included in second quarter 2011 earnings per share were $0.08 of net charges related to loss contracts and an acquisition settlement. Before the impact of these items in both periods, non-GAAP earnings per share of $0.44 in the second quarter of 2012 decreased $0.03 or 6.4% from the $0.47 reported in the second quarter of 2011, primarily due to an increase in research and development spending on the B&W mPower^TM small modular reactor program.

Revenues of $852.6 million increased $100.2 million, or 13.3%, from the second quarter of 2011. Second quarter 2012 ending backlog of $5.7 billion increased $1.1 billion, or 23.4%, from the second quarter of 2011.

Recent Highlights

Announced MOU with FirstEnergy for B&W mPower Site Selection and Licensing Study
Received 25-Year Nuclear Regulatory Commission Operating License at Nuclear Fuel Services, Inc.
Awarded $100 Million Environmental Contract for a Major U.S. Utility
Awarded $82 Million in Contracts for Naval Reactor Components and Material Recovery
Awarded $73 Million in Contracts for Naval Reactor Technology Development and Manufacturing
Awarded $40 Million Boiler Pressure Parts Contract for South Dakota Coal-Fired Power Plant
Awarded $30 Million Environmental Upgrade Contract at Pennsylvania Power Plant
Awarded Engineering Release for Colombia, South America Boiler Project
Closed $700 Million Credit Facility; Extends Maturity to 2017 and Reduces Overall Facility Costs

Results of Operations

Consolidated revenues for the second quarter of 2012 were $852.6 million, an increase of $100.2 million, or 13.3%, from the second quarter of 2011. This increase is principally due to a $108.4 million increase in revenues in the Power Generation segment resulting from strong environmental control equipment and environmental aftermarket services as well as growth in new renewable steam generation systems. This increase was partially offset by the timing of material receipts for a Nuclear Energy segment replacement steam generator project and a 3.2% reduction in combined government segment revenues.

Operating income for the second quarter of 2012 was $89.4 million, an increase of $26.1 million from the second quarter of 2011. Included in second quarter 2012 operating income was $18.1 million related to the recovery of losses incurred in the prior year on a condenser replacement contract at a commercial nuclear site. Included in second quarter 2011 operating income were $15.1 million of net charges related to loss contracts and an acquisition settlement. Excluding the impact of these items in both periods, operating income in the second quarter of 2012 decreased $7.1 million compared to the second quarter of 2011.

The decrease in operating income excluding items was primarily due to an $11.6 million increase in research and development expenses principally related to the Company’s investment in the small modular reactor program and lower equity income contributions, as expected, from the Company’s unconsolidated steam boiler joint venture in China partially offset by increased revenues and strong execution within the Power Generation segment.

“In the second quarter, the Company continued to perform in-line with expectations and is tracking well for the full year,” said E. James Ferland, President and Chief Executive Officer of B&W. “Bookings in the first half of the year have been strong, but volatile on a quarterly basis. Importantly, early in the third quarter, following a similar recommendation by the House Defense Appropriations Subcommittee earlier this year, the Senate Defense Appropriations Subcommittee recommended advanced procurement funding for an additional Virginia Class submarine in the Fiscal Year 2013 Defense Appropriations Bill. Also early in the third quarter, the Company announced an MOU for site selection and licensing studies for B&W mPower small modular reactor units at FirstEnergy and has been awarded a more than $300 million boiler contract in Vietnam through our China joint venture, all positive signals of continuing strength in our business.”

Liquidity

The Company’s cash and investments position, net of debt, was $417.9 million at the end of the second quarter of 2012, approximately the same level as the $418.7 million at the end of the first quarter of 2012. During the quarter, the Company contributed $94.0 million to its pension plans. The Company does not expect to make additional pension contributions for the remainder of 2012. In addition to net cash, the Company maintains a $700.0 million revolving credit agreement with $491.4 million of availability as of the end of the second quarter. The Company believes it maintains adequate liquidity to fund operations, which could include increased working capital requirements to fund internal growth, R&D programs, and product and geographic expansion opportunities.

Reconciliation of Non-GAAP Earnings Per Share and Operating Income
*(in $ millions, except per share amounts) amounts may not foot due to rounding**

	Q2 2012			Q2 2011*
GAAP operating income	$	89.4		$	63.3
NFS acquisition settlement		-			(10.9	)
NE Condenser Replacement Project		(18.1	)		26.0
Non-GAAP operating income	$	71.3		$	78.4

GAAP earnings per share	$	0.54		$	0.39
NFS acquisition settlement		-			(0.06	)
NE Condenser Replacement Project		(0.10	)		0.13
Non-GAAP earnings per share	$	0.44		$	0.47

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

Conference Call to Discuss Second Quarter 2012 Results

		Date:		Wednesday, August 8, 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 expectations regarding pension funding and our beliefs regarding liquidity and backlog, to the extent it may be viewed as an indicator of future revenues. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, adverse changes in the industries in which we operate and delays, changes or termination of contracts in backlog. If one or more of these or other risks materialize, actual results may vary materially from those expressed. For a more complete discussion of these and other risk factors, see B&W’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2011. B&W cautions not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.

About B&W

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

TABLES TO FOLLOW


THE BABCOCK & WILCOX COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

	June 30,		December 31,
	2012		2011
	(Unaudited)
	(In thousands)


Current Assets:
Cash and cash equivalents	$	206,770	$	415,209
Restricted cash and cash equivalents		56,762		61,190
Investments		155,554		68,805
Accounts receivable – trade, net		339,273		305,832
Accounts receivable – other		75,245		77,505
Contracts in progress		370,021		315,286
Inventories		115,507		107,298
Deferred income taxes		106,358		102,022
Other current assets		33,551		33,929

Total Current Assets		1,459,041		1,487,076

Property, Plant and Equipment		1,046,510		1,017,422
Less accumulated depreciation		621,485		595,131

Net Property, Plant and Equipment		425,025		422,291

Investments		3,949		3,775

Goodwill		278,737		276,180

Deferred Income Taxes		218,374		241,739

Investments in Unconsolidated Affiliates		186,800		163,568

Other Assets		209,235		194,482

TOTAL	$	2,781,161	$	2,789,111

THE BABCOCK & WILCOX COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

	June 30,			December 31,
	2012			2011
	(Unaudited)
	(In thousands)


Current Liabilities:
Notes payable and current maturities of long-term debt	$	4,601		$	4,653
Accounts payable		247,802			237,494
Accrued employee benefits		201,040			303,803
Accrued liabilities – other		62,789			71,079
Advance billings on contracts		445,447			438,753
Accrued warranty expense		96,055			97,209
Income taxes payable		26,799			1,816

Total Current Liabilities		1,084,533			1,154,807

Long-Term Debt		510			633

Accumulated Postretirement Benefit Obligation		77,370			80,663

Environmental Liabilities		45,057			44,069

Pension Liability		501,253			586,045

Other Liabilities		90,423			87,921

Commitments and Contingencies

Stockholders’ Equity:
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 119,204,529 and 118,458,911 shares at June 30, 2012 and December 31, 2011, respectively		1,192			1,185
Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; No shares issued		-			-
Capital in excess of par value		1,125,268			1,106,971
Retained earnings		377,093			266,325
Treasury stock at cost, 459,869 and 351,876 shares at June 30, 2012 and December 31, 2011, respectively		(12,944	)		(10,059	)
Accumulated other comprehensive loss		(520,438	)		(538,628	)
Stockholders’ Equity – The Babcock & Wilcox Company		970,171			825,794
Noncontrolling interest		11,844			9,179
Total Stockholders’ Equity		982,015			834,973

TOTAL	$	2,781,161		$	2,789,111

THE BABCOCK & WILCOX COMPANY CONDENSED CONSOLIDATED
STATEMENTS OF INCOME

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
	(Unaudited)
	(In thousands, except share and per share amounts)

Revenues	$	852,585		$	752,352		$	1,618,477		$	1,443,629

Costs and Expenses:
Cost of operations		638,400			587,741			1,221,139			1,152,547
Research and development costs		34,150			22,568			63,186			39,876
(Gains) losses on asset disposals and impairments – net		(622	)		89			(882	)		79
Selling, general and administrative expenses		107,985			97,078			214,008			199,711
Total Costs and Expenses		779,913			707,476			1,497,451			1,392,213

Equity in Income of Investees		16,687			18,381			34,044			33,742

Operating Income		89,359			63,257			155,070			85,158

Other Income (Expense):
Interest income		504			305			737			764
Interest expense		(1,152	)		(1,297	)		(1,775	)		(1,752	)
Other – net		4,328			4,425			3,226			1,431
Total Other Income		3,680			3,433			2,188			443

Income before Provision for Income Taxes		93,039			66,690			157,258			85,601

Provision for Income Taxes		31,909			20,349			52,266			25,593

Net Income		61,130			46,341			104,992			60,008

Net Loss (Income) Attributable to Noncontrolling Interest		2,894			(132	)		5,776			(289	)

Net Income Attributable to The Babcock & Wilcox Company	$	64,024		$	46,209		$	110,768		$	59,719

Earnings per Common Share:
Basic:
Net Income Attributable to The Babcock & Wilcox Company	$	0.54		$	0.39		$	0.94		$	0.51
Diluted:
Net Income Attributable to The Babcock & Wilcox Company	$	0.54		$	0.39		$	0.93		$	0.51

Shares used in the computation of earnings per share:
Basic		118,648,459			117,502,610			118,451,903			117,235,443
Diluted		119,257,911			118,353,937			119,058,527			118,155,592

THE BABCOCK & WILCOX COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended
	June 30,
	2012			2011
	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	104,992		$	60,008
Non-cash items included in net income:
Depreciation and amortization		35,530			37,775
Income of investees, net of dividends		(17,757	)		(16,689	)
(Gain) loss on asset disposals and impairments – net		(882	)		79
In-kind research and development costs		8,740			-
Amortization of pension and postretirement costs		43,057			41,021
Stock-based compensation expense		9,047			9,695
Excess tax benefits from stock-based compensation		(1,436	)		(4,356	)
Other, net		(7,837	)		(8,773	)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable		(42,582	)		(72,281	)
Net contracts in progress and advance billings on contracts		(45,882	)		(11,497	)
Accounts payable		18,360			15,941
Inventories		(10,031	)		(2,908	)
Current and deferred income taxes		43,534			36,605
Accrued warranty and other current liabilities		(11,404	)		(5,755	)
Pension liability, accumulated postretirement benefit obligation and accrued employee benefits		(189,882	)		(90,249	)
Prepaid expenses		297			(42,305	)
Other, net		(10,546	)		2,044
NET CASH USED IN OPERATING ACTIVITIES		(74,682	)		(51,645	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in restricted cash and cash equivalents		4,428			(9,439	)
Purchases of property, plant and equipment		(41,548	)		(32,195	)
Proceeds from sale of unconsolidated affiliate		2,091			-
Purchases of available-for-sale securities		(155,979	)		(88,746	)
Sales and maturities of available-for-sale securities		68,532			71,211
Investments in equity and cost method investees		(6,572	)		(35,467	)
Proceeds from asset disposals		132			714
NET CASH USED IN INVESTING ACTIVITIES		(128,916	)		(93,922	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of short-term borrowing and long-term debt		(101	)		(1,600	)
Payment of debt issuance costs		(4,747	)		(82	)
Excess tax benefits from stock-based compensation		1,436			4,356
Proceeds from exercise of stock options		1,424			4,052
Distributions to noncontrolling interests		(284	)		(170	)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(2,272	)		6,556
EFFECTS OF EXCHANGE RATE CHANGES ON CASH		(2,569	)		6,240
NET DECREASE IN CASH AND CASH EQUIVALENTS		(208,439	)		(132,771	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		415,209			391,142
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	206,770		$	258,371

The Babcock & Wilcox Company
Business Segment Information
For the Periods Ended June 30, 2012 and 2011
(In thousands of U.S. dollars)

		THREE MONTHS ENDED						SIX MONTHS ENDED
		6/30/12			6/30/11			6/30/12			6/30/11
REVENUES:
Power Generation		$	497,037		$	388,643		$	911,310		$	744,827
Nuclear Operations			265,398			272,625			515,576			523,080
Technical Services			28,269			30,668			53,242			59,028
Nuclear Energy			67,392			93,877			153,978			159,139
Adjustments and Eliminations			(5,511	)		(33,461	)		(15,629	)		(42,445	)

	TOTAL	$	852,585		$	752,352		$	1,618,477		$	1,443,629

SEGMENT INCOME:
Power Generation		$	46,458		$	28,098		$	74,437		$	54,731
Nuclear Operations			48,541			59,289			96,543			89,739
Technical Services			18,411			14,466			33,029			26,608
Nuclear Energy			(12,935	)		(33,342	)		(29,762	)		(70,820	)
	SUBTOTAL		100,475			68,511			174,247			100,258
Corporate			(11,116	)		(5,254	)		(19,177	)		(15,100	)
	TOTAL	$	89,359		$	63,257		$	155,070		$	85,158

EQUITY IN INCOME (LOSS) OF INVESTEES:
Power Generation		$	3,054		$	6,030		$	6,876		$	12,040
Nuclear Operations			0			0			0			0
Technical Services			13,633			12,351			27,168			21,702
Nuclear Energy			0			0			0			0

	TOTAL	$	16,687		$	18,381		$	34,044		$	33,742

PENSION EXPENSE:
Power Generation		$	16,668		$	16,139		$	33,107		$	32,067
Nuclear Operations			10,372			8,946			20,743			17,892
Technical Services			698			633			1,396			1,267
Nuclear Energy			1,013			1,098			2,238			2,279
Corporate			1,946			1,744			3,892			3,424

	TOTAL	$	30,697		$	28,560		$	61,376		$	56,929

DEPRECIATION AND AMORTIZATION:
Power Generation		$	4,903		$	4,399		$	9,491		$	9,119
Nuclear Operations			8,414			9,743			16,903			20,134
Technical Services			54			66			128			132
Nuclear Energy			1,463			1,323			3,008			2,504
Corporate			2,981			2,929			6,000			5,886

	TOTAL	$	17,815		$	18,460		$	35,530		$	37,775

RESEARCH AND DEVELOPMENT, NET:
Power Generation		$	5,810		$	5,786		$	10,649		$	8,780
Nuclear Operations			0			23			119			34
Technical Services			110			646			325			646
Nuclear Energy			28,230			16,113			52,093			30,416

	TOTAL	$	34,150		$	22,568		$	63,186		$	39,876

CAPITAL EXPENDITURES:
Power Generation		$	4,516		$	3,895		$	10,247		$	8,034
Nuclear Operations			10,582			3,984			23,356			15,750
Technical Services			0			0			0			0
Nuclear Energy			1,735			1,320			2,600			3,783
Corporate			3,274			2,243			5,345			4,628

	TOTAL	$	20,107		$	11,442		$	41,548		$	32,195

BACKLOG:
Power Generation		$	2,528,575		$	1,455,575		$	2,528,575		$	1,455,575
Nuclear Operations			2,859,748			2,693,961			2,859,748			2,693,961
Technical Services			14,070			12,820			14,070			12,820
Nuclear Energy			310,260			467,896			310,260			467,896

	TOTAL	$	5,712,653		$	4,630,252		$	5,712,653		$	4,630,252

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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