BWX Technologies, Inc.

Previous wording

The revenues of our Government Operations segment are largely a function of defense spending by the U.S. Government. Through this segment, we engineer, design and manufacture precision naval nuclear components, reactors and nuclear fuel for the U.S. Department of Energy ("DOE")/National Nuclear Safety Administration's Naval Nuclear Propulsion Program. In addition, this segment downblends Cold War-era government stockpiles of high-enriched uranium, develop and manufacture advanced materials and products for commercial, military and space applications and supply proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers. As a supplier of major nuclear components for certain U.S. Government programs, this segment is a significant participant in the defense industry.

Current wording

The revenues of our Government Operations segment are largely a function of defense spending by the U.S. Government. Through this segment, we engineer, design and manufacture precision naval nuclear components, reactors and nuclear fuel for the U.S. Department of Energy ("DOE")/National Nuclear Safety Administration's Naval Nuclear Propulsion Program. In addition, this segment downblends Cold War-era government stockpiles of high-enriched uranium, develops and manufactures advanced materials and products for commercial, military and space applications and supplies proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers. As a supplier of major nuclear components for certain U.S. Government programs, this segment is a significant participant in the defense industry.

Previous wording

This segment also provides various services to the U.S. Government by managing and operating high-consequence operations at U.S. nuclear weapons sites, national laboratories and manufacturing complexes. The revenues and equity income of investees under these types of contracts are largely a function of spending by the U.S. Government and the performance scores we and our consortium partners earn in managing and operating these sites. With our specialized capabilities of full life-cycle management of special materials, facilities and technologies, we believe this segment is well-positioned to continue participating in the ongoing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE, NASA and other federal agencies.

Current wording

This segment also provides various services to the U.S. Government by managing and operating high-consequence operations at U.S. nuclear weapons sites, national laboratories and manufacturing complexes. The revenues and equity income of investees under these types of contracts are largely a function of spending by the U.S. Government and the performance scores we and our consortium partners earn in managing and operating these sites. With our specialized capabilities of full life-cycle management of special materials, facilities and technologies, we believe this segment is well-positioned to continue participating in the ongoing cleanup, operation and management of critical government-owned nuclear sites, laboratories and manufacturing complexes maintained by the DOE and other federal agencies.

Previous wording

Through this segment, we design and manufacture commercial nuclear steam generators, heat exchangers, pressure vessels, reactor components, as well as other auxiliary equipment, including containers for the storage of spent nuclear fuel and other high-level nuclear waste. This segment is a leading supplier of nuclear fuel, fuel handling systems, tooling delivery systems, nuclear-grade materials and precisely machined components, and related services for CANDU nuclear power plants. This segment also provides a variety of engineering and in-plant services and is a significant supplier to nuclear power utilities undergoing major refurbishment and plant life extension projects. Additionally, this segment is a global manufacturer and supplier of critical medical radioisotopes and radiopharmaceuticals.

Current wording

Through this segment, we design and manufacture commercial nuclear steam generators, heat exchangers, pressure vessels, reactor components, as well as other auxiliary equipment, including containers for the storage of spent nuclear fuel and other high-level nuclear waste. This segment is a leading supplier of nuclear fuel, fuel handling systems, tooling delivery systems, nuclear-grade materials and precisely machined components, and related services for CANDU nuclear power plants. This segment also provides a variety of engineering and in-plant services and offers a broad suite of lifecycle support and management services for the global nuclear power industry, transmission and distribution markets. This segment is a significant supplier to nuclear power utilities undergoing major refurbishment and plant life extension projects and is a global manufacturer and supplier of critical medical radioisotopes and radiopharmaceuticals.

Previous wording

Our Commercial Operations segment's overall activity primarily depends on the demand and competitiveness of nuclear energy and the demand for critical radioisotopes and radiopharmaceuticals. A significant portion of our Commercial Operations segment's operations depends on the timing of maintenance outages, the cyclical nature of capital expenditures and major refurbishment and life extension projects, as well as the demand for nuclear fuel and fuel handling equipment primarily in the Canadian market, which could cause variability in our financial results.

Current wording

Our Commercial Operations segment's overall activity primarily depends on the demand and competitiveness of nuclear energy and the demand for critical radioisotopes and radiopharmaceuticals. A significant portion of our Commercial Operations segment's operations depends on the timing of maintenance outages, the cyclical nature of capital expenditures and major refurbishment and life extension projects, as well as the demand for nuclear fuel and fuel handling equipment and engineering services primarily in the Canadian market, which could cause variability in our financial results.

Previous wording

On December 27, 2024, we entered into an agreement to acquire Kinectrics Holdings Inc., the parent company of Kinectrics Inc. ("Kinectrics"). Kinectrics is a leader in providing lifecycle management services for the global nuclear power and transmission and distribution markets, and in the production and supply of isotopes for the radiopharmaceutical industry. Kinectrics employs over 1,300 employees located across 20 sites worldwide. This acquisition is targeted to close in the middle of 2025, following necessary regulatory and other approvals. Once completed, Kinectrics will be reported as part of our Commercial Operations segment.

Current wording

On May 20, 2025, we acquired all of the equity interests of Kinectrics Holdings Inc., the parent company of Kinectrics Inc. ("Kinectrics"). Kinectrics is a leader in providing lifecycle management services for the global nuclear power and transmission and distribution markets, and in the production and supply of isotopes for the radiopharmaceutical industry which will enable us to expand our portfolio of products and services in the global nuclear market. Kinectrics is reported as part of our Commercial Operations segment.

Previous wording

For a summary of the critical accounting policies and estimates that we use in the preparation of our unaudited condensed consolidated financial statements, see Item 7 of our 2024 10-K. There have been no material changes to our critical accounting policies and estimates during the three months ended March 31, 2025.

Current wording

For a summary of the critical accounting policies and estimates that we use in the preparation of our unaudited condensed consolidated financial statements, see Item 7 of our 2024 10-K. There have been no material changes to our critical accounting policies and estimates during the six months ended June 30, 2025.

Previous wording

(1)During the three months ended March 31, 2025 and 2024, no adjustments to any one contract had a material impact on our consolidated financial statements.

Current wording

(1)During the three months ended June 30, 2025, our Government Operations segment results were favorably impacted by contract adjustments related to a nuclear operations contract. These adjustments resulted in an increase in revenue and operating income of $29.4 million for the three and six months ended June 30, 2025. During the three and six months ended June 30, 2024, no adjustments to any one contract had a material impact on our consolidated financial statements.

Previous wording

Results of Operations – Three Months Ended March 31, 2025 vs. Three Months Ended March 31, 2024

Current wording

Results of Operations – Three and Six Months Ended June 30, 2025 vs. Three and Six Months Ended June 30, 2024

Previous wording

Consolidated revenues increased 13.0%, or $78.3 million, to $682.3 million in the three months ended March 31, 2025 compared to $604.0 million for the corresponding period of 2024, due to increases in our Government Operations and Commercial Operations segments of $68.2 million and $11.3 million, respectively.

Current wording

Consolidated revenues increased 12.1%, or $82.6 million, to $764.0 million in the three months ended June 30, 2025 compared to $681.5 million for the corresponding period of 2024, due to increases in our Government Operations and Commercial Operations segments of $48.1 million and $34.6 million, respectively.

Previous wording

Consolidated operating income increased $3.7 million to $96.6 million in the three months ended March 31, 2025 compared to $93.0 million for the corresponding period of 2024. Operating income in our Government Operations segment increased $12.1 million which was partially offset by a decrease in operating income in our Commercial Operations segment of $2.1 million and an increase in Unallocated Corporate expenses of $6.3 million when compared to the corresponding period in the prior year.

Current wording

Consolidated operating income increased $7.3 million to $199.1 million in the six months ended June 30, 2025 compared to $191.8 million for the corresponding period of 2024. Operating income in our Government Operations segment increased $29.0 million which was partially offset by a decrease in operating income in our Commercial Operations segment of $11.9 million and an increase in Unallocated Corporate expenses of $9.8 million when compared to the corresponding period in the prior year.

Previous wording

Operating income increased $12.1 million to $97.7 million in the three months ended March 31, 2025 compared to $85.7 million for the corresponding period of 2024, primarily driven by the operating income impact of the changes in revenues noted above.

Current wording

Operating income increased $16.9 million to $109.4 million in the three months ended June 30, 2025 compared to $92.5 million for the corresponding period of 2024, primarily driven by the operating income impact of the changes in revenues noted above.

Previous wording

Revenues increased $68.2 million, or 14.0%, to $555.3 million in the three months ended March 31, 2025 compared to $487.1 million for the corresponding period of 2024. The increase was primarily driven by the timing of long-lead material procurements of $62.5 million and the acquisition of A.O.T. during the quarter ended March 31, 2025 which increased revenues by $6.3 million. These increases were partially offset by a decrease in revenues associated with our advanced technologies business.

Current wording

Revenues increased $116.3 million, or 11.3%, to $1,144.2 million in the six months ended June 30, 2025 compared to $1,028.0 million for the corresponding period of 2024. The increase was primarily driven by the timing of long-lead material procurements of $62.2 million and uranium processing and downblending operations of $64.1 million which includes revenues associated with the acquisition of A.O.T., which was completed on January 3, 2025. These increases were partially offset by a decrease in revenues associated with our advanced technologies business.

Previous wording

Revenues increased 9.6%, or $11.3 million, to $128.3 million in the three months ended March 31, 2025 compared to $117.0 million for the corresponding period of 2024. The increase was primarily related to higher revenues in nuclear components manufacturing of $26.3 million which was partially offset by a $16.2 million decrease in revenues related to on-site inspection, maintenance and refurbishment work when compared to the corresponding period in the prior year.

Current wording

Revenues increased 24.5%, or $34.6 million, to $176.1 million in the three months ended June 30, 2025 compared to $141.5 million for the corresponding period of 2024. The increase was primarily related to the acquisition of Kinectrics, completed on May 20, 2025, which resulted in an increase in revenues of $38.9 million as well as an increase in revenues related to components manufacturing of $26.4 million. These increases were partially offset by a $29.7 million decrease in revenues related to on-site inspection, maintenance, modification and refurbishment work when compared to the corresponding period in the prior year.

Previous wording

Operating income decreased $2.1 million to $6.5 million in the three months ended March 31, 2025 compared to $8.6 million for the corresponding period of 2024. The decrease was primarily related to an unfavorable shift in our product mix as well as a $2.6 million increase in expenses associated with merger and acquisition and restructuring-related activities when compared to the corresponding period of the prior year.

Current wording

Operating income decreased $9.8 million to $6.9 million in the three months ended June 30, 2025 compared to $16.6 million for the corresponding period of 2024. The decrease was primarily related to an unfavorable shift in our product mix as well as a $2.2 million increase in expenses associated with merger and acquisition and restructuring-related activities when compared to the corresponding period of the prior year. These decreases were partially offset by the operating income impact of the changes in revenues noted above.

Previous wording

Unallocated corporate expenses increased $6.3 million in the three months ended March 31, 2025 compared to the corresponding period of 2024. The increase was due to higher healthcare costs of $3.2 million related to the timing of claims in addition to an increase in legal and consulting costs associated with merger and acquisition related activities of $1.9 million when compared to the corresponding period in the prior year. We also experienced a $0.9 million increase in expenditures related to the transformation of our information technology infrastructure.

Current wording

Unallocated corporate expenses increased $9.8 million in the six months ended June 30, 2025 compared to the corresponding period of 2024. The increase was due to higher healthcare costs of $3.4 million related to the timing of claims in addition to an increase in legal and consulting costs associated with merger and acquisition related activities of $3.5 million when compared to the corresponding period in the prior year. We also experienced a $3.6 million increase in restructuring-related expenditures. These increases were partially offset by a decrease in expenditures related to the transformation of our information technology infrastructure of $1.1 million.

Previous wording

We primarily operate in the U.S., Canada and the U.K. and we recognize our U.S. income tax provision based on the U.S. federal statutory rate of 21%, our Canadian tax provision based on the Canadian local statutory rate of approximately 25%, and our U.K. tax provision based on the U.K. local statutory rate of 25%.

Current wording

We primarily operate in the U.S. and Canada and we recognize our U.S. income tax provision based on the U.S. federal statutory rate of 21%, our Canadian tax provision based on the Canadian local statutory rate of approximately 25%, and other foreign jurisdictions at various enacted rates.

Previous wording

Our effective tax rate for the three months ended March 31, 2025 was 17.7% as compared to 22.5% for the three months ended March 31, 2024. The effective tax rate for the three months ended March 31, 2025 was lower than the U.S. corporate income tax rate of 21% primarily due to excess tax benefits associated with equity compensation partially offset by the unfavorable foreign rate differential. The effective tax rate for the three months ended March 31, 2024 was higher than the U.S. corporate income tax rate of 21% primarily due to state income taxes within the U.S. and the unfavorable rate differential associated with our foreign earnings and lower levels of excess tax benefits associated with equity compensation.

Current wording

Our effective tax rate for the three months ended June 30, 2025 was 19.7% as compared to 20.3% for the three months ended June 30, 2024. Our effective tax rate for the six months ended June 30, 2025 was 18.8% as compared to 21.3% for the six months ended June 30, 2024. The effective tax rates for the three and six months ended June 30, 2025 were lower than the U.S. corporate federal income tax rate of 21% primarily due to benefits from U.S. federal research and development tax credits and excess tax benefits associated with equity compensation. The effective tax rates for the three and six months ended June 30, 2024 approximated the U.S. corporate federal income tax rate of 21% due to the revaluation of our Canadian net deferred tax liabilities, which was required by the temporary reduction of the Canadian federal tax rate for qualifying nuclear manufacturers for tax years beginning on or after January 1, 2024.

Previous wording

We do not include the value of our unconsolidated joint venture contracts in backlog. These unconsolidated joint ventures are included in our Government Operations segment.

Current wording

We do not include the value of our unconsolidated joint venture contracts in backlog.

Previous wording

As of March 31, 2025, our ending backlog was $4,878.7 million, which included $396.3 million of unfunded backlog related to U.S. Government contracts. We expect to recognize approximately 61% of the revenue associated with our backlog by the end of 2026, with the remainder to be recognized thereafter.

Current wording

As of June 30, 2025, our ending backlog was $6,015.2 million, which included $651.4 million of unfunded backlog related to U.S. Government contracts. We expect to recognize approximately 53% of the revenue associated with our backlog by the end of 2026, with the remainder to be recognized thereafter.

Previous wording

As of March 31, 2025, borrowings under the Term Loan totaled $234.4, borrowings and letters of credit issued under the Revolving Credit Facility totaled $170.0 million and $1.4 million, respectively, and we had $578.6 million available under the Revolving Credit Facility for borrowings and to meet letter of credit requirements. As of March 31, 2025, the weighted-average interest rate on outstanding borrowings under the Credit Facility was 5.67%.

Current wording

As of June 30, 2025, borrowings under the Term Loan totaled $231.3 million, borrowings and letters of credit issued under the Revolving Credit Facility totaled $505.0 million and $1.4 million, respectively, and we had $243.6 million available under the Revolving Credit Facility for borrowings and to meet letter of credit requirements. As of June 30, 2025, the weighted-average interest rate on outstanding borrowings under the Credit Facility was 5.67%.

Previous wording

We issued $400 million aggregate principal amount of 4.125% senior notes due 2028 (the "Senior Notes due 2028") pursuant to an indenture dated June 12, 2020 (the "2020 Indenture"), among the Company, certain of our subsidiaries, as guarantors, and U.S. Bank Trust Company, National Association (formerly known as U.S. Bank National Association) ("U.S. Bank"), as trustee. The Senior Notes due 2028 are guaranteed by each of the Company's present and future direct and indirect wholly owned domestic subsidiaries that is a guarantor under the Credit Facility.

Current wording

We issued $400 million aggregate principal amount of 4.125% senior notes due 2028 (the "Senior Notes due 2028") pursuant to an indenture dated June 12, 2020 (the "2020 Indenture"), among the Company, certain of our subsidiaries, as guarantors, and U.S. Bank Trust Company, National Association (formerly known as U.S. Bank National Association) ("U.S.

Previous wording

We have posted surety bonds to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters. We utilize surety bond facilities to support such obligations, but the issuance of surety bonds under those facilities is typically at the surety's discretion, and the surety bond facilities generally permit the surety, in its sole discretion, to terminate the facility or demand collateral. Although there can be no assurance that we will maintain our surety bond capacity, we believe our current capacity is adequate to support our existing requirements for the next 12 months. In addition, these surety bonds generally indemnify the beneficiaries should we fail to perform our obligations under the applicable agreements. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue. As of March 31, 2025, surety bonds issued and outstanding under these arrangements totaled approximately $304.5 million.

Current wording

We have posted surety bonds to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters. We utilize surety bond facilities to support such obligations, but the issuance of surety bonds under those facilities is typically at the surety's discretion, and the surety bond facilities generally permit the surety, in its sole discretion, to terminate the facility or demand collateral. Although there can be no assurance that we will maintain our surety bond capacity, we believe our current capacity is adequate to support our existing requirements for the next 12 months. In addition, these surety bonds generally indemnify the beneficiaries should we fail to perform our obligations under the applicable agreements. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue. As of June 30, 2025, surety bonds issued and outstanding under these arrangements totaled approximately $325.4 million.

Previous wording

Similarly, we have provided letters of credit and bank guarantees to governmental agencies and contractual counterparties to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters. We utilize our Revolving Credit Facility and a bilateral letter of credit facility to support such obligations, but the issuance of letters of credit and bank guarantees under our bilateral letter of credit facility is at the issuer’s discretion, and our bilateral letter of credit facility generally permits the issuer, in its sole discretion, to demand collateral if the issuer does not otherwise have the benefit of the collateral under our Credit Facility. Although there can be no assurance that we will maintain our bilateral letter of credit facility capacity, we believe our current capacity, together with capacity under our Revolving Credit Facility, is adequate to support our existing requirements for the next 12 months. As of March 31, 2025, letters of credit and bank guarantees issued and outstanding under our bilateral letter of credit facility totaled approximately $28.0 million, and such letters of credit and bank guarantees are secured by the collateral under our Credit Facility.

Current wording

Similarly, we have provided letters of credit and bank guarantees to governmental agencies and contractual counterparties to support regulatory and contractual obligations for certain decommissioning responsibilities, projects and legal matters. We utilize our Revolving Credit Facility and a bilateral letter of credit facility to support such obligations, but the issuance of letters of credit and bank guarantees under our bilateral letter of credit facility is at the issuer’s discretion, and our bilateral letter of credit facility generally permits the issuer, in its sole discretion, to demand collateral if the issuer does not otherwise have the benefit of the collateral under our Credit Facility. On May 14, 2025 we amended our Credit Facility to increase the maximum aggregate amount of the bilateral letter of credit facility to $75 million. Although there can be no assurance that we will maintain our bilateral letter of credit facility capacity, we believe our current capacity, together with capacity under our Revolving Credit Facility, is adequate to support our existing requirements for the next 12 months. As of June 30, 2025, letters of credit and bank guarantees issued and outstanding under our bilateral letter of credit facility totaled approximately $54.0 million, and such letters of credit and bank guarantees are secured by the collateral under our Credit Facility.

Previous wording

As of March 31, 2025, we had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $99.0 million. These long-term liabilities are expected to require use of our resources to satisfy future funding obligations. Based largely on statutory funding requirements, we expect to make contributions of approximately $8.8 million for the remainder of 2025 related to our pension and postretirement plans. We may also make additional contributions based on a variety of factors including, but not limited to, tax planning, evaluation of funded status and risk mitigation strategies.

Current wording

As of June 30, 2025, we had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $190.3 million. These long-term liabilities are expected to require use of our resources to satisfy future funding obligations. Based largely on statutory funding requirements, we expect to make contributions of approximately $13.3 million for the remainder of 2025 related to our pension and postretirement plans. We may also make additional contributions based on a variety of factors including, but not limited to, tax planning, evaluation of funded status and risk mitigation strategies.

Previous wording

Our working capital increased by $36.0 million to $491.8 million at March 31, 2025 from $455.8 million at December 31, 2024, primarily due to net changes in contracts in progress and advance billings on contracts due to the timing of project cash flows and a decrease in current liabilities associated with the payment of accrued incentives.

Current wording

Our working capital decreased by $49.1 million to $406.7 million at June 30, 2025 from $455.8 million at December 31, 2024, primarily due to net changes in contracts in progress and advance billings on contracts due to the timing of project cash flows, as well as increases in accounts receivable, accounts payable and accrued liabilities.

Previous wording

Our net cash provided by operating activities increased by $17.6 million to $50.7 million in the three months ended March 31, 2025, compared to cash provided by operating activities of $33.0 million in the three months ended March 31, 2024. The increase in cash provided by operating activities was primarily attributable to the timing of project cash flows.

Current wording

Our net cash provided by operating activities increased by $110.8 million to $209.7 million in the six months ended June 30, 2025, compared to cash provided by operating activities of $98.9 million in the six months ended June 30, 2024. The increase in cash provided by operating activities was primarily attributable to the timing of project cash flows.

Previous wording

Our net cash used in investing activities increased by $126.0 million to $156.4 million in the three months ended March 31, 2025, compared to cash used in investing activities $30.3 million in the three months ended March 31, 2024. The increase in cash used in investing activities was primarily attributable to the $103.3 million acquisition of A.O.T. and $26.4 million investments in equity method investees.

Current wording

Our net cash used in investing activities increased by $568.9 million to $629.5 million in the six months ended June 30, 2025, compared to cash used in investing activities $60.6 million in the six months ended June 30, 2024. The increase in cash used in investing activities was primarily attributable to the acquisitions of A.O.T. and Kinectrics for $103.3 million and $434.4 million, respectively, net of cash acquired. We also experienced an increase in investments in equity method investees of $33.0 million.

Previous wording

Our net cash provided by financing activities increased by $116.9 million to $84.8 million in the three months ended March 31, 2025, compared to cash used in financing activities of $32.2 million in the three months ended March 31, 2024. The increase in cash used in financing activities was primarily due to an increase in net borrowings of long-term debt of $123.4 million which was partially offset by a $10.0 million increase in repurchases of common stock when compared to the corresponding period of the prior year.

Current wording

Our net cash provided by financing activities increased by $450.8 million to $385.8 million in the six months ended June 30, 2025, compared to cash used in financing activities of $65.0 million in the six months ended June 30, 2024. The increase in cash used in financing activities was primarily due to an increase in net borrowings of long-term debt of $471.9 million which was partially offset by a $10.0 million increase in repurchases of common stock when compared to the corresponding period of the prior year.

Previous wording

At March 31, 2025, we had restricted cash and cash equivalents totaling $6.5 million, $3.7 million of which was held for future decommissioning of facilities (which is included in Other Assets on our condensed consolidated balance sheets) and $2.8 million of which was held to meet reinsurance reserve requirements of our captive insurer.

Current wording

At June 30, 2025, we had restricted cash and cash equivalents totaling $7.2 million, $4.1 million of which was held for future decommissioning of facilities (which is included in Other Assets on our condensed consolidated balance sheets) and $3.0 million of which was held to meet reinsurance reserve requirements of our captive insurer.

Previous wording

At March 31, 2025, we had long-term investments with a fair value of $8.5 million and our investment portfolio consisted entirely of mutual funds. These equity securities are carried at fair value with the unrealized gains and losses reported in earnings.

Current wording

At June 30, 2025, we had long-term investments with a fair value of $7.6 million and our investment portfolio consisted entirely of mutual funds. These equity securities are carried at fair value with the unrealized gains and losses reported in earnings.