Todd Jacobson
WC Monitor
2/27/2015
Operating income for B&W’s Technical Services Group took a significant dip in the fourth quarter of 2014, dropping to $345,000—$10 million less than during the fourth quarter of 2013—as B&W dealt with the loss of its Y-12 and Pantex management and operating contracts and lower fee from weapons complex sites impacted by the Waste Isolation Pilot Plant radiological release, most notably at Los Alamos National Laboratory. Overall, B&W reported this week a loss of $156.5 million in operating income in the fourth quarter of 2014, down $451.8 million from the same period in 2013, thanks to an adjustment for pension and other post-retirement benefits and restructuring activities associated with the company’s planned spinoff of its Power Generation business. Without the adjustments, the company reported $108.3 million in income during the fourth quarter, up from $86.7 million in the fourth quarter of 2013, as it was buoyed by its Power Generation and Nuclear Operations segments.
B&W’s Technical Services Group continued to reel in the fourth quarter of 2014 from its Y-12/Pantex defeat, which company President Jim Ferland previously said represented about half of the sector’s revenue. For the fourth quarter of 2014, revenues were $14.1 million, down from $26.3 million during the same period in 2013. For the year, B&W reported $35.2 million in income, down from $58.2 million in 2013. The loss of the Y-12/Pantex contract contributed $12.5 million to the decrease, B&W said in a Securities and Exchange Commission filing. In a statement, Ferland did not reference the performance of the Technical Services Group, but said that the spinoff of the Power Generation Business was on track to be completed in mid-summer. “The positive performance and significant momentum of the two core businesses at the end of the year reinforces our belief that the planned spin of the Power Generation business will result in two strong businesses with opportunities for increased growth,” Ferland said.
Technical Services Group Looking to Expand Scope
B&W said it expected the Technical Services Group’s operating income to be between $15 and $20 million in 2015 as it deals with a full year without income from Y-12 and Pantex as well as increased bid and proposal activity. B&W is bidding for the Chalk River Laboratories contract in Canada as well as the National Nuclear Security Administration’s Kansas City National Security Campus. Ferland also said B&W was closely following the new Idaho Cleanup Project (ICP) Core contract, the Savannah River Site management and operating contract and potential work in the United Kingdom. “There’s some changes going on at Sellafield and we continue to look to expand our business a little bit beyond our traditional DOE scope and look at DoD opportunities, NASA opportunities among others,” Ferland said in a Feb. 26 conference call with investors.
Ferland also said B&W was expecting to reap the benefits of a ramp-up in work on the Ohio-Class nuclear submarine replacement. B&W already won a contract last year to make missile tubes for the new submarine. “We feel good and positive about Ohio replacement and you will see it start to build in as we head into the backend of this decade,” Ferland said.
