Thank you for visiting this CFO page which provides me with a venue to share my thoughts on the strengths of the Company’s financial profile and its future direction. As a new member of Holtec’s executive team, I am pleased to have an opportunity to share my insights and observations with our stakeholders. Having joined the Holtec executive team recently has given me the unique perspective of a newcomer to observe the inner workings of the Company with a fresh and externally oriented perspective and to highlight Holtec’s key competitive advantages.
One of the most surprising aspects of Holtec’s financial profile is the absence of long-term debt on the Company’s balance sheet. The Company has been cash flow positive since shortly after its inception in 1986 and over the years has generated significant positive cash flow enabling it to fund its operating and expansion needs purely on the strength of its internal cash generating capability. While being debt free is a laudable record, I believe it also means missed opportunities for growth. As the new CFO with a broad mandate, I plan to place a modest amount of debt on our balance sheet and give the Company’s business teams the means to seek out new growth opportunities.
A second highlight of Holtec’s business model is the unusually large portion of income that it dedicates to R&D. Spending in excess of 25% of operating profit on R&D initiatives demonstrates the Company’s commitment to taking a long-term strategic business view. Holtec’s long-term R&D programs like the HI-STORE CIS facility and the SMR-160 program highlight management’s long view investment philosophy. As a privately-owned company Holtec is not beholden to quarterly earnings releases and thus unlike publicly traded companies, can pursue emerging technologies which may be upwards of a decade off from commercialization. I plan to continue supporting the R&D programs.
Another strength of the Company’s financial profile is its high performing and internationally diversified business portfolio. The preponderance of Holtec’s core business is tied to long-term contracts with some completion dates extending into the 2030s. This business model makes Holtec’s cash flow quite predictable and increases the accuracy of medium- and long-term financial planning exercises. With a customer base comprised of large multinational firms, many of whom are Fortune 500 companies, the risk profile of Holtec’s contract to cash project life cycle is extremely low. In addition, Holtec’s diversified global presence has helped it safely navigate the turbulent waters of today’s nationalistic and tariff challenged international business environment.
The innovative spirit at Holtec is yet another defining characteristic that sustains the financial performance of the Company. With over 110 patents and deep technical knowhow Holtec’s intellectual property portfolio confers a tremendous competitive advantage on the Company enabling it to maintain either a #1 or #2 market share position in the markets it serves. Holtec is globally recognized as an unrivaled pioneering supplier to the nuclear energy industry. Holtec maintains deep long-term customer relationships with some of the largest energy companies in the world and is viewed as a partner which provides advanced technical solutions to some of the world’s most pressing clean energy needs.
Finally, I would like to personally applaud Holtec’s dedication to corporate social responsibility. A shining example of Holtec’s commitment to corporate social responsibility was its decision to move its headquarters & technology Center to Camden NJ which is amongst the poorest cities in the country. I take great pride in knowing that Holtec is committed to hiring from the local community and providing opportunities to those less fortunate.
With an ever expanding dynamic and diverse workforce combined with robust business fundamentals and a resilient financial foundation Holtec is poised for significant growth and prosperity.
James Graham, Vice President & CFO