During an earnings call this week, BWX Technologies President and CEO Rex Geveden sounded less like a boss disheartened by seeing a $13-billion contract award undone than someone eager to land a bigger payday in the near future.
In December, the Department of Energy cancelled the Tank Closure Contract that a BWXT-led team won in May after losing bidders protested to the Government Accountability Office.
The good news, Geveden told analysts during Tuesday’s fourth quarter call, is DOE’s move to combine management and closure of 177 underground tanks of radioactive waste with a solicitation for direct feed low-activity waste. It makes for “a much bigger opportunity.”
As things turned out, the much bigger opportunity publicly surfaced on Thursday when DOE’s Office of Environmental Management issued a draft request for proposals for the potential $26-billion Integrated Tank Disposition Contract. The solicitation combines the tank contract with operation of the Waste Treatment Plant being built at Hanford by Bechtel.
The “delayed opportunity” is far larger in scope and value than the tank contract, Geveden said. “BWXT remains postured to help DOE to help the DOE with its evolving mission at Hanford.”
Geveden declined to say whether it would be the same BWXT-led team that would pursue the direct-feed contract. “No comment on teammates. … because we are in the sensitive stages,” he said.
For the tank contract, Virginia-based BWXT was teamed up with Texas-based companies Fluor and Intera, plus Richland, Wash.-based DBD.
When asked, Geveden speculated that an award could come by the end of the year although there is no way to be sure, he added.
The U.S. government accounted for about 77% of BWXT’s consolidated revenue during 2020, according to the company’s form 10-K report filed with the Securities and Exchange Commission this week.
Much of that comes from contracts to build reactor components for the U.S. Navy — a business on which BWXT holds a virtual monopoly.
BWXT Closes Out 2020 With Increase in Quarterly, Annual Revenue
BWXT posted a record $557 million in revenue for the fourth quarter of 2020, up 11% from the $501 million in the 2019 period.
In addition, BWXT’s net income for the fourth quarter was $65.7 million, or $0.69 per diluted share, up from $61.4 million, or $0.64 per diluted share for the same period in 2019.
For the year, BWXT took in $2.1 billion in revenue, which represents a 12% rise compared with $1.9 billion in 2019. Likewise, the full-year net income for 2020 was $279 million, or $2.91 per diluted share, which beat the 2019 figures of $244 million, or $2.55 per diluted share.
“We remain well-positioned for long-term growth with stable and expanding core businesses combined with exciting nuclear opportunities in new markets with new applications,” Geveden said in the earnings press release.
“While we expect modest growth in 2021, we remain focused on edifying BWXT’s premier position as the manufacturer of naval nuclear reactors through outstanding execution, while completing the capacity expansion campaign for the Navy’s growing demand for our products,” Geveden went on to say. The company expects 2021 earnings per share in the range of $3.05 to $3.20 for the year, excluding pension and post-retirement benefit.
BWXT is part of teams that submitted proposals to DOE for operation of the Y-12 Security Complex in Tennessee and the Pantex Plant in Texas as well as the Savannah River Integrated Mission contract in South Carolina, Geveden said during the conference call.
The Nuclear Operations Group, which includes BWXT’s naval business, raked in $426 million for the fourth quarter 2020, up 15% from the 2019 quarter’s $371 million. For the year, the group revenue was over $1.6 billion, which exceeded the 2019 total of roughly $1.4 billion by 15%. The Nuclear Operations Group’s income was $81 million for the quarter and $326 million for the year, both up from the $72 million and $298 million, respectively, for the 2019 quarter and yearly totals.
For the Nuclear Services Group, which supports BWXT’s business with the Department of Energy Office of Environmental Management, quarterly revenue of about $33 million was down from $39 million in 2019. Yearly 2020 revenue of $136 million was up from the 2019 total of $131 million. Both the quarterly and annual income totals of $8 million and $26 million are both up from the corresponding 2019 totals of roughly $6 million and $14 million.
Revenue at BWXT Nuclear Power Group, which caters to the commercial power plant sector, was $107 million for the recently-concluded fourth quarter and $371 million for the year, which beat the corresponding 2019 totals of $97 million and $353 million. But the power group’s quarterly income of $13 million was down from the $17 million recorded in the fourth quarter of 2019. The same goes for the 2020 annual income of $52 million, which is lower than the $54 million taken in during 2019.
Nuclear Power Group revenue is expected to grow about 6% in 2021, primarily from a recovery in the medical isotope business, BWXT officials said during the call. The isotopes business was down about 7% in 2020, compared to 2019, Geveden said. A rebound is seen in the coming year as people schedule elective medical procedures postponed during the height of the COVID-19 pandemic, he added.
BWXT is currently a minority partner in joint ventures operating at the Waste Isolation Pilot Plant in New Mexico as well as cleanup contracts at the Portsmouth Site in Ohio and the Los Alamos National Laboratory in New Mexico, among others.
