BWX Technologies, Inc. Q1 FY2025 earnings call

• BWXT had a solid start to 2025 with good first quarter financial results and multiple strategic wins. • Government operations had strong quarter with 14% revenue growth and 17% adjusted EBITDA growth, with wins like the management and operations contract for the Department of Energy's Strategic Petroleum Reserve and NNSA's intent to award the DUECE contract. • Commercial operations had record segment backlog of $1.3 billion in Commercial Power, driven by bookings including the Pickering life extension steam generator contract. • Special materials closed A.O.T. acquisition and is working on national security enrichment plant projects. • SMR market had significant milestone with Canadian Nuclear Safety Commission authorizing construction of the first BWRX-300 unit. • BWXT Medical had double-digit revenue and adjusted EBITDA growth, on track for over 20% full year growth.

Government operations: First quarter revenue was up 14%, driven by growth in naval propulsion, special materials, and about 1% contribution from the A.O.T. acquisition. Adjusted EBITDA was $117 million, leading to adjusted EBITDA margin of 21.1%. Commercial operations: Revenue was $128 million, up 10% year-over-year, led by double-digit growth in Medical and solid growth in commercial power. Within Commercial Power, higher revenue was driven by SMRs and Pickering component volumes. Adjusted EBITDA in the segment was $14 million, up modestly year-over-year but margin was 10.9%. Special materials: Closed the A.O.T. acquisition on January 3rd, working on large-scale opportunities to supply high-purity depleted uranium and halfway through a one-year study for the build-out of a national security enrichment plant. BWXT Medical: Had a solid quarter with double-digit revenue and adjusted EBITDA growth, driven by PET diagnostic product lines, on track for full year revenue growth of over 20%.

• Reaffirming guidance for revenue, adjusted EBITDA, EPS, and free cash flow. • Refined ranges for several items. • Expect full year free cash flow of $265 million to $285 million. • Government operations expected mid-single-digit revenue growth in 2025. • Commercial operations anticipated revenue growth of approximately 50%, with 14% to 15% EBITDA margin but lower end more likely due to raw material cost issue in first half. • Adjusted effective tax rate in 2025 expected to be only slightly higher versus 2024.

• Supply chains could be affected by macro disruptions. • Tariffs could impact BWXT Medical's product delivery. • Temporary impact of heightened inflation for specialized raw materials in CANDU Fuel business line. • Geopolitical risks related to material sourcing for certain business segments.

Q: There were some negative EACs this quarter, were they all at government operations?

A: No, it wasn't all in government operations EACs. It's about half and half between the commercial and the government business. Half from commercial operations due to zirconium cost impact, and half from government operations with nothing big on the positive side.

Q: Do you see BWXT as in line to get funds from the appropriated shipbuilding industry?

A: Not much in the CR, but optimistic about the reconciliation bill which has funding for defense enrichment, DoD reactors, etc.

Q: Can you go further on the reconciliation package and its impact on NASA and shipbuilding?

A: Reconciliation bill has funding for accelerating defense enrichment, DoD reactors, strategic capabilities office, coated fuels. Office of Shipbuilding impact too early to tell, but positive. NASA's nuclear thermal propulsion appetite is good.

Q: Latest update on perfecting the process on moly and time line to get into contracted sales in 2026?

A: Still a window for approval in 2025, but could bleed over into early 2026. Working on perfecting product with details to address technically.

Q: Next phases of the enrichment pilot program and HALEU market?

A: In conceptual stage designing pilot plant, sole source award for pilot plant next. HALEU market has different SWU needs, government has constructive view on using it to set up capability.

Q: Free cash flow seasonality this year?

A: Typical pattern, first quarter off to good start, CapEx and operating cash flow building over year, back half likely most significant in terms of free cash flow.

Q: Impact of AUKUS and second VA sub on 10-year growth CAGR?

A: Doesn't fundamentally change outlook but derisks it, early capital projects for AUKUS, scope on SSN-AUKUS-scope to be disclosed when possible.

Q: Color on BWXT's entry into SPR management and why chosen?

A: Competitive field with six proposals, won due to experiential quals going back to history, understanding of operating high-consequence sites, and confidence in BWXT brand.

Q: Progress on actinium-225 effort?

A: Doing well as largest commercial producer, working on multiple production modalities, other isotopes like lead-212 also in product pipeline.