BWX Technologies (BWXT) risk factors, FY2024 10-K

Industry Risks

1. 01Federal debt ceiling limitations, reductions in government spending, or impacts to federal appropriations that fund many of our contracts (such as those impacts arising from a continuing resolution or government shutdown), could adversely impact government spending for the products and services we provide
2. 02We 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
3. 03Our 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

Operational Risks

1. 04Our business could be negatively impacted by security threats, including physical and cybersecurity threats, and other disruptions
2. 05Actual or threatened public health epidemics, pandemics or outbreaks, such as COVID-19, could have a material adverse effect on our business and results of operations
3. 06epidemic, 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
4. 07In some instances, we have augmented our technology base by licensing the proprietary intellectual property of third parties. 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
5. 08We have a captive insurance company subsidiary that provides us with various insurance coverages. Claims, as a result of our operations, could adversely impact the ability of our captive insurance company subsidiary to respond to all claims presented
6. 09The loss of, or the inability to attract and retain, qualified personnel could have a material adverse effect on our business
7. 10Negotiations with labor unions and possible work stoppages and other labor problems could divert management's attention and disrupt operations. In addition, new collective bargaining agreements or amendments to agreements could increase our labor costs and operating expenses
8. 11We rely on a limited number of suppliers, including single-source suppliers, which could, under certain circumstances, adversely affect our revenues and operating results
9. 12Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully bid on and win various contracts
10. 13Our business strategy includes acquisitions and strategic investments to support our growth, which can create certain risks and uncertainties
11. 14Our business strategy also includes development and commercialization of new technologies to support our growth, which requires significant investment and involves various risks and uncertainties. These new technologies may not achieve desired commercial or financial results
12. 15We conduct a portion of our operations through joint venture entities, over which we may have limited ability to influence
13. 16If our co-venturers fail to perform their contractual obligations on a project or if we fail to coordinate effectively with our co-venturers, we could be exposed to legal liability, loss of reputation and reduced profit on the project
14. 17We recognize a large portion of our revenue on an over time basis which could result in volatility in our results of operations
15. 18Our backlog is subject to unexpected adjustments and cancellations and may not be a reliable indicator of future revenues or earnings
16. 19Pension and medical expenses associated with our retirement benefit plans may fluctuate significantly depending on changes in actuarial assumptions, future market performance of plan assets, future trends in health care costs and legislative or other regulatory actions

Legal, Regulatory and Compliance Risks

1. 20We are involved in a number of legal proceedings. We cannot predict the outcome of litigation and other contingencies with certainty
2. 21If we fail to comply with government procurement laws and regulations, we could lose business and be liable for various penalties or sanctions
3. 22Employee, agent or partner misconduct or our overall failure to comply with laws, regulations or government contracts could weaken our ability to win contracts, lead to the suspension of our operations and result in reduced revenues and profits
4. 23Our nuclear operations subject us to various environmental, regulatory, financial and other risks
5. 24Environmental, social and governance matters and any related reporting obligations may impact our business
6. 25Limitations or modifications to indemnification regulations of the U.S. or foreign countries could adversely affect our business
7. 26Our business requires us to obtain, and to comply with, federal, state and local government permits and approvals