This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk07: Ladies and gentlemen, welcome to the BWX Technologies' fourth quarter earnings conference call. At this time, all participants are in a listen-only mode. Following the company's prepared remarks, we will conduct a question-and-answer session. Instructions will be given at that time. I'd now like to turn the conference call over to our host, Mark Kratz, BWXT's Director of Investor Relations. Please go ahead.
spk00: Thank you, Jamie. Thank you, Jamie. Good morning and welcome to BWXT's fourth quarter 2020 earnings call. Joining me today are Rex Jevedin, President and CEO, and David Black, Senior Vice President and CFO. On today's call, we will discuss certain matters that constitute forward-looking statements and involve risks and uncertainties, including those described in the Safe Harbor provision found in yesterday's earnings release and the company's SEC filings. We will also provide non-GAAP financial measures, which are reconciled to GAAP measures in the quarterly materials that are available on the BWXT website. With that, Rex, I will turn the call over to you.
spk01: Thank you, Mark, and good morning, everyone. Yesterday, we reported fourth quarter results, and we will get into that during this call, but I first wanted to thank our 6,700 employees for their hard work, grit, and dedication to the BWXT mission through 2020. Despite battling a public health crisis and other business challenges, we met our commitments to customers and shareholders, made tangible progress toward future growth initiatives, and produced financial results that were well above expectations. In challenging times like these, our corporate purpose, which is to employ nuclear technology to solve some of the world's most important problems, is a clarion call that reminds us of our commitment to the highest safety, security, ethical, and environmental stewardship standards. We continue to demonstrate strong financial and operational results by staying focused on our mission while holding to our core values. In 2020, we exceeded revenue and earnings per share guidance, resulting in top line growth of 12% and earnings per share growth of 16%, setting new top and bottom line records for the company. Owing to our 2020 earnings performance, we achieved a long-term guidance established over three years ago and are therefore retiring it today. The company's 2021 guidance reflects more modest growth but remains aligned with the multi-year strategy against which we continue to execute. Our future growth opportunities are driven by the company's mission and strategy, and we have the building blocks for continued growth over the medium and long term. Let me give you a quick business update and some insight into our focus for 2021 before turning the call over to David. The nuclear operations group finished out a strong year, but it was not without challenges, particularly in the fourth quarter. We saw a dramatic increase in active COVID case counts, leading to a meaningful number of absences toward the end of the year, which ultimately had some limited impact on shop volume. Almost all the active cases have been determined to be non-workplace transmission, so our protocols continue to effectively mitigate the probability of contracting the virus at work. On a positive note, we are seeing active case counts come down significantly relative to January and early February, similar to what we are seeing across the country. Despite the adversity, our business remains strong, and we do not anticipate a material impact from absenteeism in 2021. Our backlog remains robust, and the team remains dedicated to the customers' and companies' mission success. To that end, we completed the negotiation of the next multi-year pricing agreement that is on track for a formal contract award toward the end of the first quarter or early second quarter pending final government approval. To remind everyone, this multi-year pricing agreement is very similar to the one we announced in February of 2019, a two-year agreement primarily supporting Virginia class and Columbia class fuel and component production. In the fourth quarter, we also shipped the second of three Virginia payload module missile tubes. The team has completed all weld repair efforts, and we expect to complete the remaining backlog for missile tube production as that program rolls off in the coming year or so. And the Nuclear Power Group, our principal customers, Ontario Power Generation and Bruce Power, are effectively managing COVID protocols, as we saw a pickup in the second half of 2020 with service outage activity. In the medical business, signs of recovery persist as fourth quarter revenues were only down mid-single digits, and we finished 2020 down about 7%, driven largely by some deferral of demand, particularly for elective procedures. Last summer, we hired Martin Coombs, a seasoned executive in the pharmaceutical and medical technology sectors, to lead the BWXT nuclear medicine business. Since then, Martin has been busy positioning the organization for future transformation recruiting top industry talent, optimizing production, and navigating near-term market disruptions. BWXT Medical is well positioned in 2021 to capture latent demand from a rebound in electric procedures and increased volume in other products. We expect the medical business to grow about 30% over the course of the next year, confirming the strong platform we acquired in 2018 as part of the Nordion acquisition. In addition to a positive outlook in the base medical business, I continue to be pleased with progress Martin and the medical team are making towards Technetium 99 generator commercialization. While there are no new significant milestones to report from the fourth quarter of 2020, we are rapidly completing major facility modifications in Kanata and we have begun in-cell equipment installation in the radiochemistry line. We expect to complete significant milestones in the coming quarters and we will continue to provide updates. Lastly, in the Nuclear Services Group, the 2021 Opportunity Pipeline remains robust. BWXT-led teams submitted proposals for the Management and Operating Services Contract at Y-12 and Pantex and the Savannah River Integrated Mission Cleanup Contract, both of which are expected to be awarded and to transition late this year. Beyond the aforementioned contracts, BWXT remains postured to help the DOE with its evolving mission at Hanford. As that procurement process has been significantly expanded to include additional scope combining a previously planned separate contract direct feed low activity waste into the new opportunity. As we progress into 2021 we are acutely focused on completing the energy capital campaign as we edified the company's premier position and naval nuclear reactors through outstanding execution. We also expect to provide incremental validation of our progress against significant medium and long-term opportunities, including achieving critical milestones in our disruptive Technetium 99 generator product, continuing to rebuild the DOE site management and environmental remediation portfolio and standing up a strong presence in the emerging nuclear micro-reactor market. Capital allocation priorities for 2021 remain largely unchanged. We continue to see long-term shareholder value creation and preservation through the capital investments in the Navy business and the Tech 99 generator production line. The Board of Directors increased the quarterly dividend 11% last week, resulting in a 250% increase since spin just five and a half years ago. This action reflects the confidence in BWXT's ability to generate future cash. As the two key capital campaigns roll off over the next 24 months, we anticipate a strong return to free cash flow generation. In order to maximize long-term shareholder value, we will maintain a flexible and strategic view about how much of that cash we return to shareholders and how much we reinvest in the business. And with that, I will turn the call over to David to discuss financial results and the 2021 guidance details.
spk03: Thanks, Rex, and good morning, everyone. Starting with the 2017 to 2020 bridge on slide four of the earnings presentation, As Rex mentioned, we are retiring our long-term EPS guidance in the first year of the three-year performance period since providing that target in 2017. Excluding the corporate tax law change, more than 90% of the multi-year EPS growth came from operations. Higher R&D costs and interest expense were offset with a reduction in share count from opportunistic share repurchases and additional pension income. Moving to 2020 results on slides five and six, fourth quarter and full year revenues were up 11% and 12% respectively, driven by outperformance across all three segments for the year. Fourth quarter earnings per share was up 4% to 74 cents, resulting in full year earnings topping our prior expectations at $3.03 per share, up 16% when compared with 2019. Fourth quarter and full year total company operating margins were down, driven by limited COVID impacts in the nuclear operations group in the fourth quarter and lower nuclear operations and nuclear power margins for the full year due to the absence of positive one-time items that occurred in 2019 and did not repeat in 2020. Operating cash flow was $196 million in 2020, down about $83 million from 2019, primarily driven by a single $89 million cash payment that we received on January 4th, the first business day of 2021, which we historically had received before the end of the fiscal year. Capital expenditures totaled $255 million in 2020, a significant increase compared with the last several years as we continue to invest heavily in the core Navy business and expand into the new product line in medical radioisotopes. Capital expenditures were about $15 million below our expectations due to timing, and they are anticipated to be incurred in 2021. Despite heavy investment for future organic growth, the company generated strong cash flow to enable relatively low borrowings and maintain a flexible balance sheet. At the end of 2020, the company's leverage ratio was two times. Moving to fourth quarter segment results on slide seven, the nuclear operations group generated robust revenue, which was up 15% to $426 million on higher long-lead material and naval nuclear fuel production. NOG operating income was $81.3 million up from the prior year, primarily due to higher volumes. This resulted in a 19.1% operating margin for the segment in the fourth quarter, slightly lower than last year due to some limited impacts from COVID. Nuclear power group fourth quarter revenue was $107 million, up 10% compared with the fourth quarter last year, primarily from the Laker acquisition, higher field service activity and fuel production, partially offset by lower component volumes. Segment revenue was down about 5.5% on an organic basis in the fourth quarter. The Nuclear Services Group delivered solid operating income of $8.4 million in the fourth quarter, up slightly versus the prior year period as better contract performance and lower costs were offset by higher business development expenses. Turning now to full-year segment results on slide 8, Nuclear Operations Group Full-year revenues were up 15% and operating income was up 9%. Full-year NOG margins were solid at 19.8% and slightly lower than last year due to fewer favorable adjustments to backlog contracts and some limited COVID impacts. Nuclear power group revenues were up 5% in 2020. On an organic basis, excluding the impact from Laker Energy acquisition, revenues were down about 5%. Segment margins finished the year at 14.6% as business impacts from COVID were offset by the Canadian government reimbursements we recorded in the third and fourth quarters. The NPG segment secured $20.4 million in Canadian government COVID-19 relief to offset business impacts throughout the year. Not only has this program had a positive impact to financials, but it will have a lasting benefit as it has allowed us to invest in our workforce and maintain high operational readiness, enabling a quicker recovery as we emerge from the pandemic. Ultimately, this helps preserve BWXT's ability to have an enduring business in the Canadian nuclear power segment and the nuclear medical space in North America and globally in the future. And lastly, the Nuclear Service Group completed a robust year despite pressures from new award delays. Operating income rose by 60% to $27.4 million from improved overall performance. Turning now to 2021 guidance on slide nine. We anticipate consolidated revenue to grow in the low single digits in 2021. with non-GAAP earnings in a range of 305 to 320 per share, with the accelerating EPS growth throughout the year driven primarily from their recovery in NPG and the timing of new awards in NSG. This leads us to expect a year similar to 2019 with a 45-55 earnings split between the first and second halves of the year. CapEx is still anticipated to be high at about $250 million, only slightly below 2020 results due to timing events and items that moved into 2021. Although Navy CapEx is still elevated above maintenance levels, most of the heightened capital investment is expected to be related to medical isotopes this year. In the operating segments, NOG revenue is expected to be up slightly as we shift from higher material production in 2020 to more labor production in 2021. NOG margins are expected to expand slightly versus 2020 to more normal levels, which we have always described as high teens operationally with upside from the FASCAS pension reimbursement benefit. NPG revenue is expected to grow about 6% in 2021. primarily from an unexpected medical isotope recovery and increased product demand, as well as anticipated higher field service activity on the power side of the business. NPG margins are expected to be approximately 13%, which does not include an assumption of any significant amount of government COVID-19 relief in 2021. NSG operating income is expected to be from $25 million to $30 million in 2021, about flat at the midpoint with 2020 results as new award opportunities are not anticipated until late in the year. Other guidance information can be found on the right-hand side of Slide 9. We do anticipate that higher income from pension will be offset from increased expenses from other segment operations, including R&D, corporate unallocated costs, and a higher effective tax rate, which is all depicted on the guidance bridge on slide 10. As we turn the page into a new year, the company remains well-positioned to capitalize on future, near, and long-term growth opportunities. As we mentioned on the last call, we look forward to providing new ambitious targets on financial metrics, enabling insight into the organization's ability to maintain healthy growth and profitability over the long term, just as we have in the past. One of our first actions in 2021 is to wrap up the multi-year budgeting process, and we expect to provide investors updated financial framework on the next call. And with that, I will ask the operator to open the line for questions.
spk07: Ladies and gentlemen, we'll now begin the question and answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the numbers to ensure the best sound quality. Once again, that is star and then one to ask a question. Our first question today comes from Carter Copeland from Mellius Research. Please go ahead with your question.
spk11: Hey, good morning, gentlemen.
spk07: Good morning.
spk11: Good morning, Carter. A couple quick ones. One, the 30% growth in medical that you mentioned, Rex, how does that compare to what you saw? How much was it down in 20, just so we get a sense of calibrating that appropriately? And then, David, on the cash... Just a couple of pieces. One, which segment did that timing shift from Q4 into Q1, that payment on the 4th, what did that apply to? And just if you could give us some color, you had a big increase in contract assets year over year. Just any color on helping us think about what that is and how that liquidates over time. Thanks.
spk01: Yeah, so Carter, on the isotopes business, we were down about 7% in 2020 compared to 2019. And most of that cratering occurred in Q2 last year. We saw some reasonable recovery in the third and fourth quarters, back to more normal levels. And off of that baseline in 2020, we expect about 30% growth in 21. So a nice rebound and some real organic growth in addition to the rebound on the elective procedures.
spk03: And as far as the cash, Carter, the, you know, NOG obviously is our big collector of cash. So it happened on, you know, the NOG segment. And as far as the, you know, growth of, you know, contract assets, I think, you know, as we grow the NOG business, there will be contract assets as well as the NPG business, you know, as we grow that and work with Bruce Power and Ontario Power Generation. Once again, you know, those assets will be, you know, building as we build, but then they'll be paid off according to the contracts that we have.
spk11: Okay. Thanks for the call. I'll let somebody else ask.
spk07: Thanks, Carter. Our next question comes from Bob Labick from CJS Securities. Please go ahead with your question.
spk10: Good morning, and look forward to the next call when you give the multi-year outlook. I was going to ask about that, so maybe I'll change the question a little bit. you know, without putting numbers to it until you finish your multi-year budget, could you talk about the primary drivers for growth over the next three to five years? And again, I understand that you'll give us, you know, numbers around it in three months, but maybe just like the components that you see as the biggest drivers for growth over the next three to five years.
spk01: Sure, I'll take that one, Bob. Yeah, there are a number of elements of growth here that should drive the business forward over the next few years. I mean, certainly we have planned growth in the isotopes business that we've talked a lot about. We do think, even though we've had some delays in our thinking over the past couple of years because of various award timing things, we do expect some really nice growth in our technical services business in the NSG segment. And that'll be based primarily on DOE awards for environmental management and for management and operations. in the weapons complex and the research laboratories in that space there. We feel quite well positioned for that. Obviously, we've been building kind of a new vertical, if you will, in micro-reactors, and so we have significant opportunities in fuel reactor design, ultimately manufacturing for various defense, national security, and space applications, and maybe commercial, maybe commercial applications in the long run there. And then I think, you know, This new Navy shipbuilding plan is interesting, and it certainly has some potential robust growth if the president requests a budget to that shipbuilding plan and the authorizers and appropriators line up to it. So we haven't built that kind of growth into our strategic forecast at this point, but I think there's kind of interesting upside around that. So those would be the four primary elements of growth.
spk10: Okay, great. And then just On the isotopes, you mentioned no, you know, material new milestones now, but more expected in 2021. And, you know, the hurdles are, as we've talked about in the past, the industrialization and regulation. And just in terms of the facility modification completion and reactor equipment, you know, design and insertion, how long do you have to complete those steps to maintain your current timeline of mid-2022 revenues? And do you feel you're still on track?
spk01: Yeah, Bob, I think we're, yes, our view fundamentally is unchanged. We've been tracking to the same milestones over the past year or so. We are making very tangible progress. The facility modifications in particular, you know, we've kind of gone from dirt and concrete a year ago to, you know, facilities that are really buttoning up. So we can see the finish line from here. I'm very impressed with what the team's doing with the program, and we're optimistic about it. Okay, super. I'll get back in queue. Thank you.
spk07: Thank you. Our next question comes from Pete Skibitsky from Allenbeck Global. Please go ahead with your question.
spk06: Hey, good morning, guys, and congrats on hitting your financial targets there that you've had out there for a while.
spk03: Thanks, Pete.
spk06: Yeah. Hey, guys, I continue to be confused about the Hanford contract. I think that's the one you won, and then it got protested. I think it got reopened. But, you know, are best and final offers in on that contract, or is that still an ongoing process? And just kind of update us on where we're at with that contract.
spk01: Yeah. What happened there, Pete, was we were awarded the contract. It did go into protest. And then the award was canceled. And the reason, what the DOE decided to do there was actually change the scope of that contract, as we talked about in the script. And so it was originally for management of the waste tanks at Hanford. They decided to add some new scope, this direct feed low activity waste component, which was to be a separate contract. And that will all now be combined into one single contract. large contract. They did publish, the DOE did publish a notice that the RFP or draft RFP for that would be out in Q1 this year. So they're certainly moving pretty quickly on that one. So it's a delayed opportunity for us. We'd like our positioning on us, but it's also now a larger scope opportunity. The scope increase is about 60% from what the original scope was to be. So a delay, but a bigger opportunity. So in the net, I think that's okay for us.
spk06: Okay. Are you keeping sort of the same teammates? And then what are you thinking, maybe like a summer or late summer kind of an award timeframe?
spk01: So, you know, no comment on teammates because we're in the sensitive stages on that. But in terms of award timeline, I would hope it would be, you know, certainly towards the end of this year. But that's not fully known yet.
spk06: Okay. Thanks, guys.
spk01: Thank you, Pete.
spk07: And our next question comes from Robert Spingarm from Credit Suisse. Please go ahead with your question.
spk04: Hey, good morning. Good morning, Rob. Good morning. David, I think you referenced the NOG revenue mix changing as more revenues come from labor production rather than materials. Does this have an impact on margins?
spk03: No, once again, what we talk about in margins in that business is all of our contracts within that business are 15% fee, which is about a 13% margin. So that does not change throughout the contract on average.
spk04: Okay. And then, Rex, just moving to nuclear microreactors, what's your thinking on the TAM on that business? And I'm not sure what the best way to ask the question is, but let's say that if these reactors were to supplant maybe a quarter of the diesel generator power that the Army currently uses, what might that translate to for BWXT?
spk01: Yeah, hey, Rob. So we've been a little reluctant to try to scope out what the addressable market is there because it's still in the sort of emergent stages, I would say. The way we've tried to describe it, and I think it's an appropriately cautious way to do it, is that where we are in that market is that customers who are interested in this kind of technology for power and propulsion applications are doing things like developing fuel technology, letting design contracts, and various development contracts. And there are kind of three phases of this, right? There's technology development, which would then mature into demonstration programs, and we're seeing that with Department of Defense's Drago's Pele program. NASA's looking at a flight demonstration program for nuclear thermal propulsion in the long run. So you go from technology development, which in these contracts are kind of in the tens of millions. We've won fuel contracts that are in that range and design contracts in that range. These demonstration programs will be in dollar scope, kind of hundreds of millions for launches and demonstrations that work for terrestrial demonstrations. And then ultimately, and I think this is kind of a few years off, but ultimately these would be production programs where you might be manufacturing, let's call it two or three of these a year. And in that case, now you've got a revenue stream, let's call it a few hundred million a year is maybe a reasonable way to think about the scale of that opportunity. But we haven't published anything on what we think that total market looks like because it just needs to develop a little more before we get specific about it.
spk04: Okay. Well, that's helpful. When you mention a few years out on the production side, five, six, seven years, that kind of thing?
spk01: I think that's about right because these demonstration programs are just getting going, and we would expect to see reactor demonstrations, a terrestrial one, maybe in 2026, 2027 timeframe, somewhere in there. A space demonstration program, I think, is a longer putt and probably a bit beyond that. So I'd say towards the latter half of the decade.
spk04: Okay. Okay. Thank you very much.
spk01: Thank you.
spk07: And our next question comes from Peter Arment from Baird. Please go ahead with your question.
spk02: Thanks. Good morning, Rex, David, Mark. Hey, Rex, you mentioned, you know, the long-term, the new Navy shipbuilding plan, at least that the Navy had put out there, but we obviously have to see the new administration weigh in. But if that was to happen, you did start to see a third Virginia class in 25. How does that impact your kind of trajectory to hitting the maintenance level, you know, kind of trajectory? I know you thought you'd be in that range for 2023. Maybe you could just highlight that.
spk01: Yeah, we haven't scoped it out in detail yet, Peter, but I think you know from the shipbuilding plan that just was published, there are three additional Virginias in the 2020s, the ones that you referenced in 25 and 26, and there's another one in 29. Of course, for us in long-league material, that would start to impact us in 23. the 24 months lead time, so it's a significant looking opportunity. What we've said historically is that we could probably accommodate a third Virginian in a particular year and sort of wedge that into our existing capacity. If we do get into normal tempo on three Virginias, say those three in the 2020s and there's another six in the 2030s, we would have to do another build out, and we haven't scoped that out specifically yet, but it would impact future capital starting in, let's call it 23. Okay.
spk02: That's helpful. And just, and then just sort of clarification back on the isotopes. Are you, the plan for, I think was previously that at some point, maybe in the second half of 2021, you'd be submitting for approval of FDA, you know, an application for Molly 99, TC 99. Is that still the plan or does that shift into 22?
spk01: Yeah, no, we haven't, you know, we've been reluctant to publish, you know, internal milestones on that, but we're still tracking to that thinking. The thing that we can control is when we submit the package to the FDA, and our view on that is unchanged.
spk02: Appreciate it. Thanks, Rex.
spk01: Thank you.
spk07: And our next question comes from Michael Ceramoli from TruSit Securities. Please go ahead with your question.
spk09: Hey, good morning. Thanks for taking the question, guys. Maybe Rex or David, just to stay on kind of Peter's shipbuilding plans. I mean, we've sort of seen, you know, kind of aspirational shipbuilding plans. This one obviously has a significant amount of unmanned platforms. And, you know, we've heard, you know, Kathleen Hicks speak pretty aggressively against some of the big Navy. But taking into consideration what you just said, Rex, about the Virginia classes potentially impacting future capital, you've been in this big CapEx phase. How should we think about your longer-term free cash flow inflection if You know, do you get some extra Virginia classes? I don't think we know the scope yet if, you know, large aircraft carriers are sort of sunsetted here, you know, curtailed. We don't know if light carriers are going to have reactors. But, I mean, do you guys feel confident that we'll get this sort of, you know, CapEx holiday and start to see some significant free cash flow inflection against various naval shipbuilding scenarios?
spk01: So, hey, good morning, Mike. You know, our strategic forecast is for that two Virginia layered with a Columbia on top of it and the Ford program as we've been seeing it, which is on sort of on five-year, you know, procurement cadence. And so in that case, certainly our CapEx rolls off very significantly, you know, in next year and then rolling down to maintenance CapEx levels. So that's how we're forecasting the business right now. And so I do expect significant free cash flow generation and options for that cash flow when the time comes. We do hear some optimism from the chief naval officer around the Navy budget. We've heard similar things from Congressman Whitman and Courtney. And so I don't know where this will go, but it's certainly not in our baseline. Our baseline is to roll off on the CapEx and start generating a lot of cash. Okay.
spk09: Are you hearing anything from the Navy customer about the light carriers and whether they will be nuclear-powered?
spk01: Yeah, we just haven't had any discussions around that topic.
spk09: Okay. Maybe just one more for me. You know, the MPG margins, obviously you had COVID-related headwinds. You talked about the medical being down, I guess, 7% for the year. But even the 13%, if I were to look back historically on those margins, you guys were kind of doing 13 and 17 and 16 and in 2016, you know, even, even 14 and 18. I'm assuming the plan is still that medical will be highly accretive. I mean, do you see a pathway to margin expansion there? You know, maybe even back up to those prior levels in the MPG group?
spk01: Yeah, I think so in the long run that isotopes businesses is margin accretive, not only to that segment, but to the, to the full, to the integrated business at the enterprise level. So I think there's potential for margin improvement there in the long run.
spk09: Okay. Is it, is it just what, what's holding back the margins, I guess, this year, you know, even if those, you know, medicals are going to grow 30%. Yeah, I think, you know, the, the,
spk01: That 13% is kind of historically what that segment's done. You should see you're correct in thinking that the isotopes with their margin contribution should drive that some. But bear in mind, Michael, that as we go through this Tech 99 generator product line development, we do have some expenses related to it that are outside of the capital spending that will put some negative pressure on margins. the growth and the isotopes business a little bit offset by the expenses related to the Tech 99 product line.
spk09: Got it. Perfect. Thanks a lot, guys. I'll jump back in here.
spk07: Our next question comes from Ron Epstein from Bank of America. Please go ahead with your question.
spk08: Hey, good morning, guys. What are you thinking about on the M&A front? I mean, has the disruption of the pandemic offered up any opportunities?
spk01: So, Ron, maybe I'll put it in the terms I normally do, right? The bullseye for us is to be able to kind of expand around our core businesses, which we've done certainly in Canada, certainly would like to do around the Navy business, and so we keep our eyes open for targets like that. It's actually a pretty surprisingly interesting pipeline. The other, you know, sort of the next layer for us would be near adjacencies, and I would the radiochemical processing, medical isotopes into that category. And then third, we might move into some other areas that fit our competencies. I've always said and will continue to say that we have a pretty fine filter because we're, by and large, a nuclear technology and manufacturing business. And so finding targets in that space, not that easy to do. Finding people who will part with those kind of assets, not that easy to do. But we do keep a constant drumbeat of acquisitions in a pipeline. And, uh, and I kind of like, uh, like some of the things that I see.
spk08: Gotcha. Gotcha. Gotcha. And then maybe just a, maybe a more specific question when we think about, uh, you know, cashflow in 2021, um, you know, outside of, um, uh, the CapEx, you know, what, what range are you thinking about when we're trying to model out free cash for 2021? Yeah, we did, you know,
spk03: We tend not to provide cash flow direction. We know that we have one large payment we came at the beginning of the year, so that will be a positive impact on cash flow. We've forecasted the capital to be $250, and so those are the types of things we give in guidance there, but not clear guidance on the cash flow for the year. Why not? You know, as we look at our long-term guidance in the future, I mean, if you look at our, you know, our cash flow, the only things that detract from it are capital. So, you know, we tend to, you know, give you the capital numbers, and we have swings on that capital. Like last year, that capital, you know, was underspent by $15 million, but that $15 million now is going to be spent this year. And so, you know, that makes our capital this year a little higher than we expected, thought last year, but the two years together, we're still at the same level. You know, other than that, you know, dividends, we give you the pieces. We just have not at this point in time chosen cash flow as a metric. And once again, we'll look, you know, at the next call to see what those metrics are that we want to develop for the next upcoming years.
spk08: Got it. Got it. Got it. And then, and then maybe just one last one here. When we look at the, the ramping of the Columbia fund, How should we, you know, think about the cadence that that'll have on the NOG growth rates?
spk03: Well, I mean, you know, we started with the first Columbia, and we've said the second Columbia is coming in in 2022, and then we've laid out at least pictorially what that should look like. It's not going to be exactly like that. It's just a representation because, you know, it'll shift between years and how it's done. But when we get to 2030, you're going to have seven-sevenths of a Columbia going through the shop, so you'll have a full one. So between now and then, it'll grow some way between now and then.
spk08: Got it. All right. Thank you.
spk07: Thanks, Ron. And, ladies and gentlemen, our next question comes from Pete Sullivan from Maxim Group. Please go ahead with your question.
spk05: All right. Thank you. Good morning. It sounds like you have a lot of milestone announcements. developing the Mo99 and Tech99 product, but can you give updated comments on the timeline to commercialize? I think your previous language was for mid-year 22. Is that still in place, please? Thank you.
spk01: Yeah, Tate, like I said earlier in the call, our view on the timeline really has not changed. We are highly focused on getting our FDA package submitted and And then, you know, when we commercialize in 22 is subject to regulatory approval, so there's a bit of uncertainty around that timeline, but our view on that has not changed.
spk05: Great. Thank you for confirming. And then related to the 30% medical growth in 21, is that spread? Can you highlight a specific isotope, or is that spread across pretty evenly across your current portfolio of isotopes, please?
spk01: It's pretty even spread. We have, you know, some pretty large products in that portfolio, like Strontium and Therosphere. Those are, you know, the bulk of the business, but we have a handful of other isotopes that are starting to show some growth in N21, and, you know, we like that whole portfolio there, and organically it's performing quite well.
spk05: Great, thanks. And last one for me, for NPG margins, you cited lower component volume in 4Q. Can you remind me, is that a higher margin business usually, and do you usually do more component work towards the end of refurbishments in Canada, or can you comment on that timing?
spk01: So the refurbishment timeline, maybe to take a general crack at that, Tate, you know, the refurbishment timeline is kind of ramps very early on long-lead components like steam generators and feeder tubes and things like that. And so we experienced a lot of growth on that curve early on. You start to see it in 2017 in that business, and we climbed up that ramp pretty rapidly. That business basically essentially tripled along with an acquisition over that period of time. We have sort of climbed that curve, and now the future opportunities are really around major component replacement, which is the field service activities related to installing steam generators and feeders and the various other components like that, heat exchangers. And so that's how we see the shape of the opportunity, if that's what you're driving at.
spk05: Thank you, Rex, sir. Well, have a great rest of the day.
spk00: Thanks. Thanks. Operator, do we have any questions? I was going to say, do we have anyone else who wants to jump back in the queue?
spk07: Oh, we do not, sir. I was going to turn the floor back over to management for closing remarks.
spk00: Well, thanks, everyone, for joining the fourth quarter earnings call. If you need to contact me, I can be reached at 980-365-4300. Thank you for joining again.
spk07: Ladies and gentlemen, with that, we'll conclude today's conference call. We do thank you for attending. You may now disconnect your lines.
Disclaimer