BWX Technologies Stock

BWX Technologies, Inc. is a specialty manufacturer of nuclear components, a developer of nuclear technologies and a service provider. The company's core businesses focus on the design, engineering and manufacture of precision naval nuclear components, reactors and nuclear fuel for the U.S. Government. The company also provides special nuclear materials processing, environmental site restoration services, products and services to customers in the nuclear power industry, critical medical radioisotopes and radiopharmaceuticals and other advanced nuclear technologies. While the company provides a wide range of products and services, its business segments are heavily focused on major projects.

Business Segments

The company operates through two segments: Government Operations and Commercial Operations.

Government Operations

Through this segment, the company engineers, designs and manufactures precision naval nuclear components, reactors and nuclear fuel for the U.S. Department of Energy (DOE)/National Nuclear Security Administration's (NNSA) Naval Nuclear Propulsion Program. In addition, the company supplies proprietary and sole-source valves, manifolds and fittings to global naval and commercial shipping customers.

The company's Government Operations segment specializes in the design and manufacture of close-tolerance and high-quality equipment for nuclear applications. In addition, the company is a leading manufacturer of critical nuclear components, fuels and assemblies for government and limited other uses. The company supplies nuclear components for DOE programs and is the largest domestic supplier of research reactor fuel elements for colleges, universities and national laboratories. The company also downblends Cold War-era government stockpiles of high-enriched uranium. In addition, the company supplies components for defense applications.

The company works closely with the DOE-supported nuclear non-proliferation program. This program is assisting in the development of a high-density, low-enriched uranium fuel required for high-enriched uranium test reactor conversions. The company has also been a leader in the receipt, storage, characterization, dissolution, recovery and purification of a variety of uranium-bearing materials. All phases of uranium downblending and uranium recovery are performed at the company's Lynchburg, Virginia and Erwin, Tennessee sites.

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 in income of investees under these types of contracts are largely a function of spending by the U.S. Government and the performance scores the company and its consortium partners earn in managing and operating these sites. With its specialized capabilities of full life-cycle management of special materials, facilities and technologies, the company 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.

The Government Operations segment is also a leader in the development of advanced nuclear reactors for a variety of power and propulsion applications in the space and terrestrial domains. U.S. Government customers for these applications include NASA, the U.S. Department of Defense (DoD) and the DOE. The company offers complete advanced nuclear fuel and reactor design and engineering, licensing and manufacturing services for these programs.

Commercial Operations

Through this segment, the company designs and manufactures commercial nuclear steam generators, heat exchangers, pressure vessels, reactor components and other auxiliary equipment, including containers for the storage of spent nuclear fuel and other high-level nuclear waste. The company supplies the nuclear industry with more than 1,300 large, heavy components worldwide and is the only commercial heavy nuclear component manufacturer in North America. This segment is also 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. The company's in-depth knowledge comes from over 50 years of experience in the design, manufacturing, commissioning and service of nuclear power generation equipment.

The company's Commercial Operations segment specializes in performing full-scope, prototype design work coupled with manufacturing integration. This segment's capabilities include steam generation and separation equipment design and development; thermal-hydraulic design of reactor plant components; in-plant inspection, maintenance and modification services; nuclear component modification and replacement; commercial nuclear fuel manufacturing and design; nuclear fuel handling system design, manufacturing, delivery, installation and commissioning; containers for the storage of spent nuclear fuel and other high-level waste; structural and thermal-hydraulic design and vibration analysis for heat exchangers; structural component design for precision manufacturing; materials expertise in high-strength, low-alloy steels and nickel-based materials; material procurement of tubing, forgings and weld wire; and metallographic and chemical analysis.

This segment also manufactures and supplies products for diagnostic imaging and radiotherapeutic treatments and is a partner for contract development and manufacturing services for life science and pharmaceutical companies. Among its offerings is the manufacture of medical radioisotopes, radiopharmaceuticals and medical devices, as well as partnerships with life science and pharmaceutical companies developing new drugs.

The company's Commercial Operations segment's overall activity primarily depends on the demand and competitiveness of nuclear energy and the demand for critical medical radioisotopes and radiopharmaceuticals. A significant portion of the company's Commercial Operations segment's operations depends on the timing of maintenance outages and the cyclical nature of capital expenditures and major refurbishments for nuclear utility customers, principally in the Canadian market, which could cause variability in its financial results.

Contracts

Government Operations

The majority of the revenue generated by this segment is from long-term contracts with the DOE/NNSA's Naval Nuclear Propulsion Program. Unless otherwise specified in a contract, allowable and allocable costs are billed to contracts with the U.S. Government in accordance with the Federal Acquisition Regulation (the FAR) and the related U.S. Government Cost Accounting Standards (CAS).

Certain of the company's U.S. Government contracts span one or more base years and multiple option years. The U.S. Government generally has the right not to exercise option periods and may not exercise an option period for various reasons including, but not limited to, annual funding determinations. In addition, contracts between the U.S. Government and its prime contractors usually contain standard provisions for termination at the convenience of the U.S. Government or the prime contractor.

The company's Government Operations segment also enters into contracts that include the management and operation of nuclear production facilities, environmental management sites and the management of spent nuclear fuel and transuranic waste for the U.S. Government, primarily the DOE. This segment also serves customers of the company's advanced technology platforms primarily through contracts that are awarded following a competitive bid process, primarily in the early design and development phases of the underlying program.

Joint Ventures

Certain of the company's Government Operations segment unconsolidated joint ventures are described below.

Los Alamos Legacy Cleanup Contract. Newport News Nuclear BWXT - Los Alamos, LLC, a limited liability company formed by Stoller Newport News Nuclear, Inc., a subsidiary of Huntington Ingalls Industries, Inc.'s Technical Solutions division, and BWXT Technical Services Group, Inc. (BWXT TSG), was awarded a contract to perform environmental monitoring and remediation, waste management and disposition, and decontamination and decommissioning at the Los Alamos National Laboratory site and surrounding private and government-owned lands.

Lawrence Livermore National Laboratory: Lawrence Livermore National Security, LLC, a limited liability company formed by the University of California, Bechtel National, Inc., Amentum and BWXT Government Group, Inc., manages and operates Lawrence Livermore National Laboratory located in Livermore, California. The laboratory serves as a national resource in science and engineering, focused on national security, energy, the environment and bioscience, with special responsibility for nuclear devices.

Savannah River Integrated Mission Completion Contract: Savannah River Mission Completion LLC, a limited liability company formed by BWXT TSG, Amentum and Fluor Federal Services, Inc. was awarded a contract to receive, store, treat and dispose of radioactive liquid waste for the DOE at the Savannah River Site located in Aiken, South Carolina.

Portsmouth Gaseous Diffusion Plant D&D: Fluor-BWXT Portsmouth LLC is a limited liability company formed by Fluor Federal Services, Inc. and BWXT TSG to provide nuclear operations, decontamination and decommissioning services at the Portsmouth Gaseous Diffusion Plant in Portsmouth, Ohio. A follow-on contract was awarded by the DOE to a competitor in 2023 and transition is expected to occur during 2024.

West Valley Demonstration Project Phase I Decommissioning and Facility Disposition: CH2M Hill-BWXT West Valley, LLC is a limited liability company formed by CH2M Hill Constructors, Inc., BWXT TSG and Environmental Chemical Corporation. Services provided include project management and support services, site operations, maintenance, utilities, high-level waste canister relocation, facility disposition, waste tank farm management, U.S. Nuclear Regulatory Commission (NRC) licensed disposal area management, waste management and nuclear materials disposition, and safeguards and security.

Synergy Achieving Consolidated Operations & Maintenance (SACOM): Syncom Space Services, LLC is a limited liability company formed by PAE Applied Technologies, LLC (acquired by Amentum in 2022) and BWXT Nuclear Operations Group, Inc. to provide facility operations and maintenance services for institutional and technical facilities, and perform test and manufacturing support services at two NASA facilities - the Stennis Space Center in Hancock County, Mississippi and the Michoud Assembly Facility in New Orleans, Louisiana.

Paducah Gaseous Diffusion Plant Deactivation and Remediation Project: Four Rivers Nuclear Partnership, LLC is a limited liability company formed by CH2M Hill Constructors, Inc., BWXT TSG and Fluor Federal Services, Inc. to provide nuclear operations, deactivation and remediation services at the Paducah Gaseous Diffusion Plant in Paducah, Kentucky.

Customers

The company provides its products and services to a diverse customer base, including the U.S. Government, utilities and other customers in the nuclear power and radiopharmaceutical industries. The company's largest and primary customer of its Government Operations segment is the U.S. Government. During the year ended December 31, 2023, the U.S. Government represented approximately 75% of the company's total consolidated revenues.

Patents and Technology Licenses

The company holds a large number of U.S. and foreign patents and have patent applications pending in certain technologies, including nuclear reactor systems, components and fuel, advanced and additive manufacturing, space nuclear propulsion, and radioisotope production.

Competition

Government Operations: The company's primary competitors in the delivery of goods and services to the U.S. Government and the operation of the U.S. Government facilities include but are not limited to, Bechtel National, Inc., Amentum, Fluor Corporation, Jacobs Engineering Group, Inc., Northrop Grumman Corporation, Huntington Ingalls Industries, Inc., Honeywell International, Inc., Leidos, Inc., Westinghouse Electric Corporation and AtkinsRealis.

Commercial Operations: The company's Commercial Operations segment supplies heavy nuclear components, specialized engineering and maintenance services, nuclear fuel, fuel handling systems and tooling delivery systems for CANDU reactors. This segment competes with a number of companies specializing in nuclear capabilities including, but not limited to, Framatome, Cameco Corporation, Doosan Heavy Industries & Construction Co., Ltd., E.S. Fox Limited, AECON Group Inc., Bechtel National, Inc., Westinghouse Electric Corporation and AtkinsRealis.

This segment also manufactures medical radioisotopes, radiopharmaceuticals and medical devices, and partners with life science and pharmaceutical companies developing new drugs. This segment competes with a number of nuclear medicine companies which include, but are not limited to, Curium Pharma, Lantheus Holdings, Inc. and Jubilant DraxImage Inc.

Governmental Regulations and Environmental Matters

The company's operations are also governed by laws and regulations relating to workplace safety and worker health, including the U.S. Occupational Safety and Health Act and regulations promulgated thereunder.

The company has been identified as a potentially responsible party at various cleanup sites under the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (CERCLA) and other environmental laws.

The company is subject to continuing reviews by governmental agencies, including the U.S. Environmental Protection Agency and the U.S. Nuclear Regulatory Commission (NRC). The company is also involved in manufacturing activities at licensed facilities in Canada that are also subject to continuing reviews by governmental agencies in Canada, including the Canadian Nuclear Safety Commission (CNSC).

History

The company was founded in 1867. It was incorporated in 2010. The company was formerly known as The Babcock & Wilcox Company and changed its name to BWX Technologies, Inc. in 2015.