2020 First Quarter Earnings Call Presentation Reported May 4, 2020 - PowerPoint PPT Presentation

2020 First Quarter Earnings Call Presentation Reported May 4, 2020

Forward-Looking Statements Disclaimer BWX Technologies, Inc. (“BWXT”) cautions that statements in this presentation that are forward -looking and provide other than historical information involve risks and uncertainties that may impact actual results and any future performance suggested in the forward-looking statements. The forward-looking statements in this presentation include, but are not limited to, statements relating to our 2020 strategic priorities, including U.S. Navy procurement, medical radioisotope industrialization and organic growth opportunities; bookings and backlog, to the extent they may be viewed as an indicator of future revenues; the expected U.S. Navy long-term procurement schedules and forecasts; estimated pension costs; the expected Canadian nuclear power forecast for services, refurbishment timelines and opportunities; disruptions to our supply chain and/or production, changes in government regulations and other factors, including any such impacts of, or actions in response to the COVID-19 health crisis; our outlook, priorities, growth opportunities in our businesses and guidance for 2020 and beyond. These forward-looking statements are based on current management expectations and involve a number of risks and uncertainties, including, among other things, the availability of federal appropriations to government programs in which we participate; our ability to win new project awards; capital spending of power generating utilities; the extent to which the COVID-19 health crisis impacts our businesses; the extent to which the length and severity of the COVID-19 health crisis exceeds our current expectations; the potential recurrence or subsequent waves of COVID-19 or similar diseases; adverse changes in the industries in which we operate; termination, delays and other difficulties executing on contracts in backlog and adverse changes in the demand for or competitiveness of nuclear products and services. 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 risks, please see BWXT’s filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. BWXT cautions not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law. 2

1Q 2020 business highlights and COVID-19 response 1Q20 and recent business highlights COVID-19 / economic risks and company response Risks o Record quarterly revenue at $542M and earnings of $0.79 o Possible plant shut down in the event of spreading per share COVID-19 at BWXT facilities o NPG – Commercial power customer shifting the timing o Amended credit facility to increase capacity by $250M, of scope to mitigate on-site activity extend maturity, and improved pricing terms o USD/CAD currency volatility/fluctuations o Awarded $128M Navy fuel contract option o NSG – DOE sites reduced to essential personnel; o Awarded TRISO contract from DOE to support incremental delays to new awards Transformational Challenge Reactor (TCR) Actions o Awarded $14M microreactor design contract from Strategic Capabilities Office (SCO) o Created pandemic planning and response team; following CDC guidelines including social distancing, o Awarded $243M, 39-month contract extension from DOE for travel restrictions West Valley Demonstration Project o Implemented new policies and procedures to limit employee exposure, including staggering shifts o Cost reduction initiatives to maintain consolidated guidance; updated underlying components to reflect changing business dynamics and risks through 2Q20 3

2020 strategic priorities and 1Q progress Continue Navy capitalization o Invested $42M in NOG capital while simultaneously ramping to 1 o Accelerated material purchases and manufacturing volume full-year Columbia production o Awarded $128M for Navy nuclear fuel cadence Increase medical isotope capital o Completed Mo-99 comprehensive re-baseline; anticipate investments and progress on 2 commercial readiness in mid-year 2022 Mo-99 commercialization o Invested $20M in NPG capital, primarily for medical isotopes milestones o Awarded $14M microreactor design contract from the Strategic Seek new opportunities in Capabilities Office 3 nuclear services and government o Awarded TRISO contact from DOE to support microreactors microreactor development o Awaiting Hanford Tanks Contract award – delayed 4

1Q20 company results ($million, except per share amounts) 542 o 1Q revenue up 30% to a record $542M driven Revenue +30% 416 by increases across all 3 segments – primarily Nuclear Operations Group (NOG) due to timing o 1Q19 1Q20 1Q GAAP and non-GAAP EPS up 55% primarily from $0.27 of better operations 0.79 GAAP including volume and margins. Other favorable 0.79 Non- GAAP (1) income and expenses were partially offset by a EPS +55% 0.51 higher tax rate o 1Q operating margin up on higher NOG margin 1Q19 1Q20 and NSG operating income, partially offset by 98 GAAP lower NPG margins due to business mix, Op. Income and 18.1% resulting in operating margin expansion of 98 Non- margin 290 bps GAAP (1) 64 18.2% o Maintained robust backlog at $5.1 billion 15.3% 1Q19 1Q20 1) Non-GAAP figures exclude any mark-to-market adjustment for pension and postretirement benefits recognized and other one-time items. A reconciliation of GAAP to adjusted, non-GAAP items can be found in the appendix of this presentation or on the investor relations website at www.bwxt.com/investors. 5

1Q19 to 1Q20 EPS bridge ($ per diluted share) 0.79 0.02 0.01 Lower R&D expense 0.27 Lower corporate expense 0.51 Higher pension income Lower interest expense NOG volume, margins NPG volume NPG margins/mix NSG income 1Q19 Operating segments Other Tax rate 1Q20 6

1Q20 segment results Segment Revenue Op. Income / Margin Summary 424 ($million) 90.4 o Revenue up 39% on accelerated timing of procurement of long-lead material and higher +39% 57.6 305 production volume 21.3% NOG o Operating income up 57% primarily from higher 18.9% revenue and favorable contract adjustments 1Q19 1Q20 1Q19 1Q20 o Revenue up 4% from higher component 88 84 manufacturing volume and the Laker Energy GAAP 8.5 12.6 acquisition, partially offset by lower field Non- +4% NPG 8.6 GAAP (1) service activity 14.9% o Operating income and margin down from an 9.8% unfavorable shift in product mix, including the 1Q19 1Q20 1Q19 1Q20 absence of the China steam generator project o Operating income up $4.8M primarily from 6.4 NSG increased income in U.S. commercial nuclear service outage work 1.6 1Q19 1Q20 1) Non-GAAP figures exclude any mark-to-market adjustment for pension and postretirement benefits recognized and other one-time items. A reconciliation of GAAP 7 to adjusted, non-GAAP items can be found in the appendix of this presentation or on the investor relations website at www.bwxt.com/investors.

2020 guidance; assumes COVID-19 impact through 2Q20 BWXT consolidated guidance Other information Green = positive revision vs. prior guidance Red = negative revision vs. prior guidance Non-GAAP EPS (1) Revenue Cap-ex o Other segment operating expense primarily for R&D: ~1% of revenue up ~8% ~$2.80 ~$270M o Corporate unallocated costs: ~$15M (vs. ~$20M) Operating segment guidance o Other income, primarily related to pension and Revenue Operating margin / income other post-employment benefit plans: ~$37M “high teens” + CAS pension NOG up ~9% o Non-GAAP effective tax rate: ~23% reimbursement o Average diluted shares outstanding: ~96M down ~1% ~11% NPG (vs. up ~5%) (vs. ~13%) o Depreciation & Amortization: ~$65M (vs. ~$70M) NSG N/A (2) ~$25M (3) 1) Non-GAAP EPS exclude any mark-to-market adjustment for pension and postretirement benefits recognized during 2020 and other one-time items, which are not known at the time guidance is provided. A reconciliation of GAAP to adjusted, non-GAAP items can be found in the appendix of this presentation or on the investor relations website at www.bwxt.com/investors. 2) NSG revenue is not consolidated for minority positions in Joint Ventures, which comprise most of the segment’s activity 3) NSG operating income guidance assumes successful contract award of Hanford Tank Remediation project in summer of 2020 with fall transition 8

2019 to 2020 guidance non-GAAP (1) EPS bridge ($ per diluted share) ~ 0.02 ~ 2.80 ~ 0.09 ~ 0.03 ~ 0.05 2.62 ~ 0.05 Lower corporate expense NOG volume Lower R&D expense NSG income NPG volume, margins/mix 2019 non-recurring items in NOG (favorable EAC to backlog contracts) and NPG (China steam generator and Asset Retirement Obligation) 2019 Operating Other Pension Interest Tax rate 2020 guidance segments 1) Non-GAAP figures exclude any mark-to-market adjustment for pension and postretirement benefits recognized and other one-time items. A reconciliation of GAAP to adjusted, non-GAAP items can be found in the appendix of this presentation or on the investor relations website at www.bwxt.com/investors. 9