What changed in this filing

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Item 1A. Risk Factors

2025-02-24 compared with 2024-02-27 · 65 added, 45 removed, 353 unchanged (24% of the section changed)

43 unchanged sentences

however, reductions in federal government spending could adversely impact programs in which we provide products or services.

In addition, these cuts could adversely

affect the viability of the suppliers and subcontractors under our programs.

In addition, these cuts could adversely affect the viability of the suppliers and subcontractors under our programs.

We may also be required to temporarily maintain operations of our joint ventures if the U.S.

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Under such a continuing resolution, funding at amounts consistent with appropriated levels for the prior fiscal year are typically available, subject to certain restrictions, but new contract and program starts are not authorized.

In the event of a continuing resolution, we expect our key programs will continue to be supported and funded under the continuing resolution.

However, during periods covered by continuing resolutions, we may experience delays in new awards of our products and services, and those delays could have a material adverse effect on our financial condition, results of operations and cash flows.

If Congress is not able to enact appropriations bills or extend the continuing resolution, the U.S.

During periods covered by a continuing resolution, we expect our key programs will continue to be supported and funded under the continuing resolution.

However, during periods covered by a continuing resolution, we may experience delays in new awards of our products and services, and those delays could have a material adverse effect on our financial condition, results of operations and cash flows.

If Congress is not able to enact appropriations bills or extend a continuing resolution, the U.S.

Government would enter a whole or partial shutdown.

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Our future business prospects in Canada are dependent upon the continued operation of Canadian nuclear plants and refurbishment of the majority of the plants in Ontario to extend their operating lives.

Unfavorable economic conditions, competition from other forms of power generation, increased competition for refurbishment contracts, changes in government policy or operational or project execution issues may lead nuclear plant operators in Canada to cease operations or delay, curtail or cancel proposed or existing life-extension projects, which may decrease the overall demand for our products and services in Canada and adversely affect our financial condition, results of operations and cash flows.

or cancel proposed or existing life-extension projects, which may decrease the overall demand for our products and services in Canada and adversely affect our financial condition, results of operations and cash flows.

We are subject to risks associated with contractual pricing in our industries, including the risk that, if our actual costs exceed the costs we estimate on our fixed-price contracts, our profitability will decline and we may suffer losses.

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• difficulties in engaging third-party subcontractors, equipment manufacturers or materials suppliers or failures by third-party subcontractors, equipment manufacturers or materials suppliers to perform could result in project delays and cause us to incur additional costs.

Our operations in foreign countries expose us to currency, political and trade risks, including from tariffs, trade barriers, and other protectionist or retaliatory measures, which could impact our results of operations.

We have significant manufacturing and sales operations in foreign countries, particularly in Canada.

Our financial results may be adversely affected by fluctuations in foreign currencies and by the translation of the financial statements of our foreign subsidiaries from local currencies into U.S.

Both the sales from international operations and export sales are subject to varying degrees of risks inherent in doing business outside of the U.S.

Such risks include the possibility of unfavorable circumstances arising from host country laws or regulations including, but not limited to changes in tariff and trade barriers.

Uncertainty remains with respect to trade policies and treaties between the U.S.

and other countries, including Canada, where we manufacture heavy nuclear components and products for our medical radioisotopes business that may be sold to US customers.

federal government has recently implemented tariffs on certain foreign goods and may implement additional tariffs on foreign goods.

For example, in January 2025, the U.S.

presidential administration stated its intention to impose a 25% tariff on imports from Canada into the United States, and the Canadian government stated it would take certain retaliatory measures.

On February 3, 2025, the U.S.

presidential administration and the Canadian prime minister announced a 30-day pause to the implementation of these tariffs.

As we currently manufacture substantially all of our products for our medical radioisotope business in Canada, a 25% tariff on all imports from Canada would increase the costs of those products manufactured in Canada and could adversely impact our gross profit for this business if we are unable to pass this cost to our customers.

Our Canadian business does not currently have any material contracts for the sale of heavy nuclear components to US customers so the direct risk related to those tariffs is currently negligible.

Such tariffs and, if enacted, any further legislation or actions taken by the U.S.

federal government or Canadian government that restrict trade, such as additional tariffs, trade barriers, and other protectionist or retaliatory measures taken by such governments, could adversely impact our profitability and ability to sell products and services.

For example, new or increased tariffs would increase the cost of our products and the components and raw materials that go into making them.

These increased costs could adversely impact the gross margin that we earn on our products, which could make our products less competitive and reduce demand from customers.

The ultimate impact of any tariffs will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, contractual terms, and the amount, scope, and nature of the tariffs.

Tariffs and other restrictive trade measures may require us to take various actions, including changing suppliers and restructuring business relationships.

Changing our operations in accordance with new or changed trade restrictions can be expensive, time-consuming, disruptive to our operations and distracting to management.

Tariffs and trade restrictions can be announced with little or no advance notice, and we may not be able to effectively mitigate all adverse impacts from such measures.

Operational Risks

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If we are unable to protect our proprietary and sensitive information, our customers could question the adequacy of our threat mitigation and detection processes and procedures, which could negatively impact our reputation and present and future business.

Moreover, the rapid evolution and increased sophistication, availability, and use of artificial intelligence technologies may exacerbate our cybersecurity risks by use of these technologies by us, our customers, suppliers, business partners, third-party providers, and bad actors.

These trends may increase the likelihood of cybersecurity events occurring.

The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means.

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Actual or threatened public health epidemics, pandemics or outbreaks, such as the global outbreak of COVID-19, could have a material adverse effect on our business and results of operations.

Any public health epidemic, pandemic or outbreak

poses the risk that we or our employees, contractors, suppliers, customers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.

Any public health epidemic, pandemic or outbreak poses the risk that we or our employees, contractors, suppliers, customers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities.

Our business could be materially adversely impacted by employee illness, quarantines, government actions, facility closures, other actions to contain the impact of such diseases and/or potential responses to such actions by our customers, suppliers, contractors and employees.

If our operations or the operations of our customers or our suppliers are restricted, we may be unable to perform fully on our contracts and our costs may increase as a result of a public health epidemic, pandemic or outbreak.

If our operations or the operations of our customers or our suppliers are restricted, we may be unable to perform fully on our contracts and our costs may increase as a result of a public health

epidemic, pandemic or outbreak.

These cost increases may result in unfavorable changes in estimates which may not be fully recoverable or adequately covered by insurance or through government assistance programs.

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Our intellectual property could be stolen, challenged, invalidated, circumvented or rendered unenforceable.

Furthermore, the increased use of artificial intelligence may raise potential liabilities related to privacy and intellectual property or result in a loss of intellectual property.

In addition, effective intellectual property protection may be limited or unavailable in certain jurisdictions where we operate.

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In the future, we may not be able to obtain necessary licenses on commercially reasonable terms, which could have a material adverse effect on our operations.

Our operations are subject to disruption caused by severe weather, environmental and natural disasters and other natural and manmade events that could adversely affect our manufacturing facilities or the infrastructure necessary to support them.

Our operations are subject to disruption caused by severe weather, environmental and natural disasters and other natural and man-made events that could adversely affect our manufacturing facilities or the infrastructure necessary to support them.

Our ability to operate or operate profitably could be significantly impacted, which could have a material adverse effect on our business, financial condition and results of operations.

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and Canada, including NRC Category 1 and CNSC-licensed nuclear manufacturing and fuel facilities.

While we take steps to mitigate the impact of severe weather, environmental and natural disasters, the frequency and severity of which may be impacted by climate change and other natural and manmade events, such events could result in severe disruption to our business operations at these facilities.

While we have experienced disruptions due to severe weather, environmental and natural disasters and other natural and man-made events in the past, including a recent facility closure due to Hurricane Helene, none have had a material adverse effect on our business or operations to date.

Similar events impacting the facilities of our customers, suppliers and other subcontractors could also impact our business or disrupt our operations.

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Depending on competitive conditions and other factors, we endeavor to obtain contractual protection against certain uninsured risks from our customers.

When obtained, such contractual indemnification protection may not be as broad as we desire or may

not be supported by adequate insurance maintained by the customer.

When obtained, such contractual indemnification protection may not be as broad as we desire or may not be supported by adequate insurance maintained by the customer.

Such insurance or contractual indemnity protection may not be sufficient or effective under all circumstances or against all hazards to which we may be subject.

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If any such strikes or other work stoppages were to occur, we could experience a significant disruption of operations.

In addition, negotiations with unions could divert management attention.

New union contracts or the organization of nonunion employees could result in increased operating costs, as a result of higher wages or benefit expenses, for both union and nonunion employees.

In addition, negotiations with unions could divert management's attention.

New union contracts or the organization of nonunion employees could result in increased operating costs, as a result of higher wages, higher benefit expenses and other factors, for both union and nonunion employees.

We rely on a limited number of suppliers, including single-source suppliers, which could, under certain circumstances, adversely affect our revenues and operating results.

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If the supply of a single-sourced or limited-sourced material is delayed or ceases, we may not be able to produce the related product in a timely manner or in sufficient quantities, if at all, which could adversely affect our revenues and operating results.

In addition, a single-source or limited-source supplier of a key component could potentially exert significant bargaining power over price, quality, warranty claims or other terms relating to these materials, which could have a material adverse effect on our financial condition, results of operations and cash flows.

In addition, a single-source or limited-source supplier of a key component could potentially exert significant bargaining power over price, quality, warranty claims or other terms

relating to these materials, which could have a material adverse effect on our financial condition, results of operations and cash flows.

Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully bid on and win various contracts.

In line with industry practice, we are often required to post standby letters of credit and surety bonds to support contractual obligations to customers as well as other obligations.

These letters of credit and bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts.

If a letter of credit or bond is required for a particular project and we are unable to obtain it due to insufficient capacity or other reasons, we will not be able to pursue that project.

We utilize bonding facilities, but, as is typically the case, the issuance of bonds under each of those facilities is at the surety's sole discretion.

In addition, we have capacity limits under our credit facility for letters of credit.

Moreover, due to events that affect the insurance and bonding and credit markets generally, bonding and letters of credit may be more difficult to obtain in the future or may only be available at significant additional cost.

There can be no assurance that letters of credit or bonds will continue to be available to us on reasonable terms.

Our inability to obtain adequate letters of credit and bonding and, as a result, to bid on new work could have a material adverse effect on our business, financial condition and results of operations.

As of December 31, 2023, we had $38.4 million in letters of credit and $114.6 million in surety bonds outstanding.

In line with industry practice, we are often required to post standby letters of credit, bank guarantees and surety bonds to support contractual obligations to customers as well as other obligations.

These letters of credit, bank guarantees and surety bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts.

If a letter of credit, bank guarantee or surety bond is required for a particular project and we are unable to obtain such instrument due to insufficient capacity or other reasons, we will not be able to pursue that project.

We utilize surety bond facilities, but, as is typically the case, the issuance of surety bonds under these facilities is at the surety's sole discretion.

In addition, we have capacity limits under our credit facility for letters of credit and bank guarantees.

Moreover, due to events that affect the insurance and bonding and credit markets generally, surety bonds, letters of credit and bank guarantees may be more difficult to obtain in the future or may only be available at significant additional cost.

There can be no assurance that letters of credit, bank guarantees and surety bonds will continue to be available to us on reasonable terms.

Our inability to obtain adequate letters of credit, bank guarantees and surety bonds and, as a result, to bid on new work could have a material adverse effect on our business, financial condition and results of operations.

As of December 31, 2024, we had $35.0 million in letters of credit and bank guarantees and $278.7 million in surety bonds outstanding.

Our business strategy includes acquisitions and strategic investments to support our growth, which can create certain risks and uncertainties.

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Our ability to secure such financing will depend in part on prevailing capital market conditions, as well as conditions in our business and operating results.

Moreover, to the extent an acquisition transaction financed by non-equity consideration results in goodwill, it will reduce our tangible net worth, which might have an adverse effect on potential credit and bonding capacity.

Additionally, an acquisition may bring us into businesses we have not previously conducted and expose us to additional business risks that are different than those we have historically experienced.

Moreover, to the extent an acquisition transaction financed by non-equity consideration results in goodwill, it will reduce our tangible net worth, which may have an adverse effect on potential credit and surety bond capacity.

Additionally, an acquisition may bring us into a business we have not previously conducted and expose us to additional business risks that are different than those we have historically experienced.

Our business strategy also includes development and commercialization of new technologies to support our growth, which requires significant investment and involves various risks and uncertainties.

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There can be no assurance that we will be successful in addressing all of the technological challenges to developing and commercializing this technology or in obtaining the required authorizations from the FDA, Health Canada or the CNSC.

In addition, commercialization of the medical radioisotope technology could subject us to product liability claims.

In addition, commercialization of the medical radioisotope technology could

subject us to product liability claims.

The potential also exists for competitors to emerge with alternative technologies.

We can provide no assurance that those competitors will not develop and commercialize similar or superior technologies sooner than we can or at a significant cost or price advantage.

Additionally, the Company's competitors may adopt new technologies and technological advancements using artificial intelligence and machine learning to pursue new products and approaches more quickly, successfully and effectively than the Company.

We may be unable to successfully integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective manner and may become less competitive as a result.

We conduct a portion of our operations through joint venture entities, over which we may have limited ability to influence.

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Our business may be adversely affected by the outcome of legal proceedings, investigations, disputes and other contingencies that cannot be predicted with certainty.

As required by GAAP, we estimate loss contingencies and establish reserves based on our assessment of contingencies where liability is deemed probable and reasonably estimable in light of the

facts and circumstances known to us at a particular point in time.

As required by GAAP, we estimate loss contingencies and establish reserves based on our assessment of contingencies where liability is deemed probable and reasonably estimable in light of the facts and circumstances known to us at a particular point in time.

Subsequent developments in legal proceedings may affect our assessment and estimates of the loss contingency recorded as a liability or as a reserve against assets in our financial statements.

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If we fail to comply with existing or future laws and regulations or if a government audit, review, or investigation uncovers improper or illegal activities, we may be subject to civil penalties, criminal penalties, or administrative sanctions, including suspension or debarment from contracting with the U.S.

Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in facilities and could increase environmental compliance expenditures, including increased energy, raw material and other costs.

For example, changes to the FAR requirements for federal contractors proposed in November 2022 would require companies to make annual greenhouse gas emissions and other disclosures in order to be deemed a responsible bidder on future government contracts.

Such additional requirements could result in additional expense and, if we are unable to comply with such regulatory changes, could have a material adverse effect on our business, financial condition and results of operations.

compliance expenditures, including increased energy, raw material and other costs.

If we are unable to comply with any such regulatory changes, it could have a material adverse effect on our business, financial condition and results of operations.

Further, our reputation could suffer harm if allegations of impropriety were made or found against us, which could adversely affect our operating performance and may result in additional expenses and possible loss of revenue.

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The precautions we take to prevent and detect these activities may not be effective, and we could face unknown risks or losses.

Further, incorporating artificial intelligence could give rise to litigation risk and risk of non-compliance and unknown cost of compliance, as artificial intelligence is an emerging technology for which the legal and regulatory landscape is not fully developed (including potential liability for breaching intellectual property or privacy rights or laws).

While new artificial intelligence initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, and our obligation to comply with them could entail significant costs, negatively affect our business, or entirely limit our ability to incorporate certain artificial intelligence capabilities into our offerings.

We are routinely audited and reviewed by the U.S.

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(with an available indemnification amount of approximately $16.5 billion) and in foreign countries (with an available indemnification amount of $2 billion).

The statutory authority for indemnification under the Price-Anderson Act has been extended by Congress four times, most recently through December 2025 by the Energy Policy Act of 2005 (Public Law 109-58).

The further extension of the NRC and DOE indemnification authority beyond 2025 is a matter presently being considered in the U.S.

The Price-Anderson Act extensions have historically been for twenty years.

The failure of an extension would not impact the existing government nuclear indemnifications already provided under our current DOE contracts and NRC licenses.

However, a failure to extend the indemnification authority would impact future DOE contract awards and NRC licenses.

In such an event, such contracts and licenses would not contain automatic government indemnification.

In certain instances, alternate indemnification authority exists but it must be specifically requested and separately approved and may not always be applicable (e.g., indemnification under Public Law 85-804 is available for contracts having a defense interest and certain DOE contracts may not be for supplies or services that satisfy this requirement).

Because nuclear liability risks are uninsurable or under-insurable, the absence of government indemnification would require us to choose between (i) accepting future DOE work and entering future NRC licenses (or providing fuel, components or services under NRC licensees lacking indemnification) without government indemnification and accepting the associated significant risk, or (ii) declining such future work.

The statutory authority for indemnification under the Price-Anderson Act has been extended by Congress five times, most recently through December 2065 by Section 107 to the Further Consolidated Appropriations Action, 2024 (Public Law 118-47, March 23, 2024).

We also provide nuclear fabrication and other services to the nuclear power industry in Canada and other countries.

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The Price-Anderson Act and Canada's NLCA indemnification provisions may not apply to all liabilities that we might incur while performing services as a contractor for the DOE and the nuclear power industry.

If an incident, damages or

evacuation is not covered under the indemnification provisions of the Price-Anderson Act or Canada's NLCA, we could be held liable for damages, in some cases regardless of fault, which could have an adverse effect on our financial condition and results of operations.

If an incident, damages or evacuation is not covered under the indemnification provisions of the Price-Anderson Act or Canada's NLCA, we could be held liable for damages, in some cases regardless of fault, which could have an adverse effect on our financial condition and results of operations.

In connection with the international transportation of toxic, hazardous and radioactive materials, it is possible for a claim to be asserted that may not fall within the indemnification provided by the Price-Anderson Act or Canada's NLCA.

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Any of these permits or approvals may be subject to denial, revocation or modification under various circumstances.

Failure to obtain or comply with the conditions of permits or approvals may adversely affect our operations by temporarily suspending our

activities or curtailing our work and may subject us to penalties and other sanctions.

Failure to obtain or comply with the conditions of permits or approvals may adversely affect our operations by temporarily suspending our activities or curtailing our work and may subject us to penalties and other sanctions.

Although existing licenses are routinely renewed by various regulators, renewal could be denied or jeopardized by various factors, including:

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors