10-Q

QuickLinks -- Click here to rapidly navigate through this document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

ý	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended September 30, 2002
	OR
o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from              to

Commission File Number 0-14292

DURATEK, INC.
(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	22-2427618 (I.R.S. Employer Identification No.)
10100 Old Columbia Road, Columbia, Maryland (Address of principal executive offices)	21046 (Zip Code)

Registrant's telephone number, including area code: (410) 312-5100

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý        No o

        Number of shares outstanding of each of the issuer's classes of common stock as of November 4, 2002:

Class of stock	Number of shares
Common stock, par value $0.01 per share	13,505,128

DURATEK, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		PAGE
Part I	Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001	2
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2002 and 2001	3
	Condensed Consolidated Statement of Changes in Stockholders' Equity for the Nine Months Ended September 30, 2002	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4.	Controls and Procedures	18
Part II	Other Information
Item 1.	Legal Proceedings	19
Item 3.	Defaults Upon Senior Securities	19
Item 5.	Other Information	19
Item 6.	Exhibits and Reports on Form 8-K	20
	Signatures	21
	Certifications	22

1

Part I Financial Information

Item 1. Financial Statements

DURATEK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of dollars, except per share amounts)

			September 30, 2002			December 31, 2001
			(unaudited)			*
ASSETS
Current assets:
	Cash and cash equivalents		$	1,526		$	4,519
	Receivables, net			58,148			48,034
	Other accounts receivable			1,915			3,671
	Costs and estimated earnings in excess of billings on uncompleted contracts			12,746			25,539
	Prepaid expenses and other current assets			6,394			5,131
	Deferred income taxes			6,080			6,080
		Total current assets		86,809			92,974
Property, plant and equipment, net				71,130			75,883
Goodwill				70,797			70,797
Other intangible assets, net				6,730			7,936
Decontamination and decommissioning trust fund				19,724			18,640
Retention				5,858			4,236
Other assets				6,360			6,261
			$	267,408		$	276,727
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Current portion of long-term debt		$	10,400		$	10,400
	Short-term borrowings			5,218			7,763
	Accounts payable			17,178			24,987
	Accrued expenses and other current liabilities			44,932			41,903
	Unearned revenues			11,710			10,488
	Waste processing and disposal liabilities			9,948			10,584
		Total current liabilities		99,386			106,125
Long-term debt				60,649			73,900
Facility and equipment decontamination and decommissioning liabilities				31,938			30,014
Other noncurrent liabilities				1,447			2,547
Deferred income taxes				1,523			1,523
		Total liabilities		194,943			214,109
Redeemable preferred stock (Liquidation value $17,958 as of September 30, 2002)				15,752			15,734
Stockholders' equity:
	Preferred stock — $.01 par value; authorized 4,840,000 shares; none issued			—			—
	Common stock — $.01 par value; authorized 35,000,000 shares; issued 15,081,648 shares in 2002 and 15,070,879 shares in 2001			150			150
	Capital in excess of par value			77,300			77,240
	Accumulated deficit			(11,064	)		(20,594	)
	Treasury stock, at cost, 1,576,658 shares			(9,275	)		(9,275	)
	Deferred stock compensation			(398	)		(637	)
		Total stockholders' equity		56,713			46,884
			$	267,408		$	276,727

*

The Condensed Consolidated Balance Sheet as of December 31, 2001 has been derived from the Company's audited Consolidated Balance Sheet reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2001.

See Notes to Condensed Consolidated Financial Statements.

2

DURATEK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Three months ended September 30,						Nine months ended September 30,
	2002			2001			2002			2001
	(unaudited)						(unaudited)
Revenues	$	72,837		$	66,737		$	214,361		$	206,217
Cost of revenues		51,243			49,770			153,883			158,334
Gross profit		21,594			16,967			60,478			47,883
Selling, general and administrative expenses		13,916			12,719			38,695			36,146
Income from operations		7,678			4,248			21,783			11,737
Other income (expense)		108			(11	)		309			159
Interest expense, net		(1,173	)		(2,429	)		(4,279	)		(8,636	)
Minority interest in loss of consolidated subsidiary		10			—			10			—
Income before income taxes and proportionate share of loss of joint venture		6,623			1,808			17,823			3,260
Income taxes		2,682			837			7,218			1,418
Income before proportionate share of loss of joint venture		3,941			971			10,605			1,842
Proportionate share of loss of joint venture		(37	)		(50	)		(111	)		(150	)
Net income		3,904			921			10,494			1,692
Preferred stock dividends and charges for accretion		(315	)		(374	)		(964	)		(1,123	)
Net income attributable to common shareholders	$	3,589		$	547		$	9,530		$	569
Basic earnings per share	$	0.27		$	0.04		$	0.71		$	0.04
Diluted earnings per share	$	0.20		$	0.04		$	0.55		$	0.04
Basic weighted average common stock outstanding		13,504			13,479			13,500			13,446
Diluted weighted average common stock and dilutive securities outstanding		19,066			13,561			19,086			13,502

See Notes to Condensed Consolidated Financial Statements.

3

DURATEK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Nine months ended September 30, 2002

(in thousands of dollars)

	Common Stock
				Capital in Excess of Par Value		Accumulated Deficit			Treasury Stock			Deferred Stock Compensation			Total Stockholders' Equity
	Shares	Amount
	(unaudited)
Balance, December 31, 2001	15,070,879	$	150	$	77,240	$	(20,594	)	$	(9,275	)	$	(637	)	$	46,884
Net income	—		—		—		10,494			—			—			10,494
Amortization of deferred stock compensation	—		—		—		—			—			239			239
Exercise of options and warrants	1,125		—		7		—			—			—			7
Other issuances of common stock	9,644		—		53		—			—			—			53
Preferred stock dividends and charges for accretion	—		—		—		(964	)		—			—			(964	)
Balance, September 30, 2002	15,081,648	$	150	$	77,300	$	(11,064	)	$	(9,275	)	$	(398	)	$	56,713

See Notes to Condensed Consolidated Financial Statements.

4

DURATEK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of dollars)

				Nine months ended September 30,
				2002			2001
				(unaudited)
Cash flows from operating activities:
	Net income			$	10,494		$	1,692
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			8,806			9,787
		Stock compensation expense			239			239
		Proportionate share of loss of joint venture			111			150
		Changes in operating assets and liabilities:
			Receivables, net		(8,274	)		(907	)
			Cost and estimated earnings in excess of billings		12,793			(50	)
			Prepaid expenses and other current assets		(1,263	)		7,229
			Retention		(1,622	)		(1,722	)
			Accounts payables, accrued expenses and other current liabilities		(6,492	)		(8,314	)
			Unearned revenues		1,222			(3,369	)
			Waste processing and disposal liabilities		(636	)		(2,217	)
			Facility and equipment decontamination and decommissioning liabilities		840			147
			Other		195			60
		Net cash provided by operating activities			16,413			2,725
Cash flows from investing activities:
	Additions to property, plant and equipment, net				(2,052	)		(3,747	)
	Other				(134	)		(19	)
		Net cash used in investing activities			(2,186	)		(3,766	)
Cash flows from financing activities:
	Proceeds from (repayments of) short-term borrowings				(2,545	)		6,239
	Proceeds from (repayments of) borrowings under revolving credit facility				(5,200	)		5,500
	Repayments of long-term debt				(8,051	)		(7,800	)
	Deferred financing costs				(1,098	)		(648	)
	Repayments of capital lease obligations				(326	)		(684	)
	Preferred stock dividends				—			(268	)
	Treasury stock purchases				—			(24	)
		Net cash provided by (used in) financing activities			(17,220	)		2,315
Net increase (decrease) in cash and cash equivalents					(2,993	)		1,274
Cash and cash equivalents at beginning of period					4,519			431
Cash and cash equivalents at end of period				$	1,526		$	1,705

See Notes to Condensed Consolidated Financial Statements.

5

DURATEK, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
(in thousands of dollars, except per share amounts)

1.    Principles of consolidation and basis of presentation

        The accompanying unaudited condensed consolidated financial statements of Duratek, Inc. and its wholly owned subsidiaries (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in subsidiaries and joint ventures in which the Company does not have control or majority ownership are accounted for under the equity method.

        All adjustments (consisting of normal recurring accruals) that, in the opinion of management, are necessary for the fair presentation of this interim financial information have been included. Results of interim periods are not necessarily indicative of results to be expected for the year as a whole. The effect of seasonal business fluctuations and the occurrence of many costs and expenses in annual cycles require certain estimations in the determination of interim results. The information contained in the interim financial statements should be read in conjunction with the Company's latest Annual Report on Form 10-K filed with the Securities and Exchange Commission.

2.    Goodwill and Other Intangible Assets

        Goodwill is attributable to several acquisitions made by the Company. Goodwill was being amortized on a straight-line basis over a 30-year period through December 31, 2001. Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets, became effective for the Company on January 1, 2002. Under SFAS No. 142, the Company's goodwill is no longer amortized to expense (See note 5). The following is an analysis which adjusts actual amounts for

6

the three and nine months ended September 30, 2001 of net income and basic and diluted earnings per share as if SFAS No. 142 had been adopted effective January 1, 2001:

	Three months ended September 30,				Nine months ended September 30,
	2002		2001		2002		2001
Net income attributable to common shareholders	$	3,589	$	547	$	9,530	$	569
Plus: Income impact of assumed conversions — preferred stock dividends and charges for accretion		315		—		964		—
Net income attributable to common shareholders assuming conversion		3,904		547		10,494		569
Add back: Goodwill amortization, net of tax		—		386		—		1,087
Adjusted net income	$	3,904	$	933	$	10,494	$	1,656
Basic earnings per share	$	0.27	$	0.04	$	0.71	$	0.04
Add back: Goodwill amortization		—		0.03		—		0.08
Adjusted basic earnings per share	$	0.27	$	0.07	$	0.71	$	0.12
Diluted earnings per share	$	0.20	$	0.04	$	0.55	$	0.04
Add back: Goodwill amortization		—		0.03		—		0.08
Adjusted diluted earnings per share	$	0.20	$	0.07	$	0.55	$	0.12

        Other intangibles consist principally of amounts assigned to operating rights related to the Barnwell, South Carolina low-level radioactive waste disposal facility acquired as part of the Waste Management Nuclear Services ("WMNS") transaction, covenants not-to-compete, and costs incurred to obtain patents. The Barnwell operating rights are being amortized on a straight-line basis over the remainder of the eight-year life of the facility. Covenants not to compete and patent amounts are being amortized over 10 and 17 years, respectively, on a straight-line basis. Intellectual property is being amortized over 4 years.

        Goodwill is tested for impairment annually. Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value. The Company uses the two-step impairment test discussed in SFAS No. 142. The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, thus the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any.

        The second step of the goodwill impairment test, used to measure the amount of impairment loss, compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. If the carrying amount of reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess.

        The Company has completed the first step of the goodwill impairment test, which was performed as of January 1, 2002. It has been determined that the fair value of all of the Company's reporting units exceed their carrying amount, therefore, there is no goodwill impairment as of January 1, 2002.

7

3.    Earnings Per Share

        Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of stock options, restricted stock, and convertible redeemable preferred stock that could share in the earnings of the Company. The reconciliation of amounts used in the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2002 and 2001 consist of the following:

				Three months ended September 30,				Nine months ended September 30,
				2002		2001		2002		2001
Numerator:
	Net income attributable to common shareholders			$	3,589	$	547	$	9,530	$	569
	Plus: Income impact of assumed conversions — preferred stock dividends and charges for accretion				315		—		964		—
	Net income attributable to common shareholders assuming conversion			$	3,904	$	547	$	10,494	$	569
Denominator:
	Weighted-average shares outstanding				13,504		13,479		13,500		13,446
	Effect of dilutive securities:
		Incremental shares from assumed conversion of:
			Employee stock options		204		39		249		26
			Restricted stock		107		43		86		30
			Convertible redeemable preferred stock		5,251		—		5,251		—
					5,562		82		5,586		56
	Adjusted weighted average shares outstanding and assumed conversions				19,066		13,561		19,086		13,502
Basic earnings per share				$	0.27	$	0.04	$	0.71	$	0.04
Diluted earnings per share				$	0.20	$	0.04	$	0.55	$	0.04

        The effects on weighted average shares outstanding of options to purchase common stock and other potentially dilutive securities of the Company that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive were 697 for the three and nine months ended September 30, 2002 and 6,643 for the three and nine months ended September 30, 2001.

4.    Segment reporting

        The Company has three primary segments: (i) commercial processing and disposal, (ii) federal services, and (iii) commercial services. During the second quarter of 2001, the Company realigned some of its operating units within each reporting segment. The impact of these changes was not significant and all figures presented have been revised to be consistent with all periods presented. The following is a brief description of each of the segments:

1.

Commercial Processing and Disposal (CPD)—The Company conducts its commercial processing operations principally at its Bear Creek Operations Facility located in Oak Ridge, Tennessee and

8

its facility in Memphis, Tennessee. The disposal site is operated in Barnwell, South Carolina. The Company's waste treatment technologies include: incineration, compaction, metal decontamination and recycling, vitrification, and steam reforming. Commercial waste processing customers primarily include commercial nuclear utilities and governmental agencies. Material is received and disposed of at the Barnwell facility primarily from commercial nuclear utilities.

2.

Federal Services (FS)—The Company provides on-site engineering and waste processing services for large government projects under the direction of the United States Department of Energy ("DOE") and other governmental agencies. The on-site engineering and waste processing services provided by the Company on DOE projects include program development, project management, waste characterization, on-site waste treatment services, facility operation, packaging and shipping of residual waste, profiling and manifesting the processed waste, selected technical support services, and site clean up. These projects are generally performed under time-and-material, fixed price or cost-plus contracts as either a general contractor to the DOE or as a subcontractor under a prime DOE contractor.

3.

Commercial Services (CS)—The Company provides engineering support services including technical consultants and technicians for commercial customers with nuclear and/or chemical plant facilities and other hazardous operations. The engineering services provided also support and complement the Company's commercial and government waste processing operations by providing highly specialized technical support services for the Company's customers. These services are generally performed under time-and-material or fixed price contracts directly to third-party customers or under related party contracts.

9

        The Company's segment information is as follows:

	As of and for the three months ended September 30, 2002
	CPD		FS		CS		Unallocated Items			Consolidated
Revenues from external customers	$	22,087	$	32,669	$	18,081	$	—		$	72,837
Income from operations		1,252		3,011		3,415		—			7,678
Interest expense, net		—		—		—		(1,173	)		(1,173	)
Proportionate share of loss of joint venture		—		—		—		(37	)		(37	)
Income taxes		—		—		—		2,682			2,682

	As of and for the three months ended September 30, 2001
	CPD			FS		CS		Unallocated Items			Consolidated
Revenues from external customers	$	21,551		$	29,842	$	15,344	$	—		$	66,737
Income (loss) from operations		(615	)		3,230		1,633		—			4,248
Interest expense, net		—			—		—		(2,429	)		(2,429	)
Proportionate share of loss of joint venture		—			—		—		(50	)		(50	)
Income taxes		—			—		—		837			837

	As of and for the nine months ended September 30, 2002
	CPD		FS		CS		Unallocated Items			Consolidated
Revenues from external customers	$	68,592	$	99,046	$	46,723	$	—		$	214,361
Income from operations		5,998		9,290		6,495		—			21,783
Interest expense, net		—		—		—		(4,279	)		(4,279	)
Depreciation and amortization expense		5,286		392		898		2,230			8,806
Proportionate share of loss of joint venture		—		—		—		(111	)		(111	)
Income taxes		—		—		—		7,218			7,218
Capital expenditure for additions to long-lived assets		318		392		497		845			2,052
Total assets		136,202		72,013		40,305		18,888			267,408

	As of and for the nine months ended September 30, 2001
	CPD			FS		CS		Unallocated Items			Consolidated
Revenues from external customers	$	66,443		$	84,871	$	54,903	$	—		$	206,217
Income (loss) from operations		(7,239	)		11,793		7,183		—			11,737
Interest expense, net		—			—		—		(8,636	)		(8,636	)
Depreciation and amortization expense		5,238			1,492		1,303		1,754			9,787
Proportionate share of loss of joint venture		—			—		—		(150	)		(150	)
Income taxes		—			—		—		1,418			1,418
Capital expenditure for additions to long-lived assets		2,218			105		700		724			3,747
Total assets		139,912			85,753		42,124		22,014			289,803

10

5.    New accounting pronouncements

        SFAS No. 142, Goodwill and Other Intangible Assets, became effective for the Company on January 1, 2002. Under SFAS No. 142, the Company's goodwill is no longer amortized to expense. Instead, goodwill is measured for impairment on an annual basis. SFAS No. 142 further requires additional disclosures including an analysis which presents net income and earnings per share for all periods presented as if the provisions of SFAS No. 142 had been adopted as of the beginning of the first period presented. As of the date of adoption, the Company had unamortized goodwill in the amount of $70.8 million and unamortized identifiable intangible assets in the amount of $7.9 million, both of which are subject to the transition provisions of SFAS 142. The impact on net earnings and earnings per share from the adoption of SFAS 142 as a result of no longer amortizing goodwill are presented in note 2. The Company completed the first step of the goodwill impairment test (as described in note 2) during the three months ended June 30, 2002; and no impairment of goodwill was indicated by that test as of January 1, 2002.

        SFAS No. 143, Accounting for Asset Retirement Obligations, will become effective for the Company on January 1, 2003. SFAS No. 143 provides criteria for the measurement and recognition of obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company has developed a plan to obtain a comprehensive engineering estimate to decontaminate its facilities and equipment and is currently evaluating the impact that SFAS No. 143 will have on its consolidated financial statements.

        SFAS No. 144, Impairment or Disposal of Long-Lived Assets, became effective for the Company on January 1, 2002. SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets and provides guidance on implementation issues related to SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, and addresses the accounting for a segment of a business accounted for as a discontinued operation. The adoption of SFAS No. 144 had no impact on the Company's consolidated financial statements as of January 1, 2002.

        In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when incurred at fair value. The statement eliminates the definition and requirements of EITF issue 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity. SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002 and may have an effect on the timing of future restructuring charges taken, if and when they occur.

11

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

        Duratek, Inc. (the "Company") derives substantially all of its revenues from commercial and government waste processing operations and from engineering support services to electric utilities, industrial facilities, commercial businesses and government agencies. The Company's operations are organized into three primary segments: (i) commercial processing and disposal, (ii) federal services and (iii) commercial services.

        The Company conducts its commercial processing operations at its three facilities in Tennessee: at its Bear Creek Operations Facility in Oak Ridge, at its facility in Memphis, and at its Gallaher Road Operations Facility in Kingston. The Company also has two facilities in Barnwell, South Carolina: the Duratek Consolidation & Services Facility ("DCSF") and the Barnwell Low-Level Radioactive Waste Management Disposal Facility. Revenue under commercial waste processing contracts is recognized as waste is processed.

        The Company's federal services operations provide on-site and off-site waste processing engineering and technical support services and provide on-site clean up (remedial action) services on large government projects for the United States Department of Energy ("DOE") and other governmental entities. Government waste processing projects and certain commercial waste processing projects are performed pursuant to long-term fixed unit rate and fixed fee contracts, some of which contain award fee components that are accounted for using the percentage-of-completion method of accounting. Revenues are recognized as costs are incurred according to predetermined rates. Contract costs primarily include direct labor, materials, and indirect costs related to contract performance.

        The Company's commercial services operations provide value-added waste treatment and engineering services to a diverse group of commercial clients, including nuclear power utilities. These operations are generally provided pursuant to short-term duration or multi-year cost plus fixed fee, fixed unit rate, or time and materials contracts. Revenues for fixed price contracts are accounted for using the percentage-of-completion method of accounting based on the costs incurred to date as compared to the total estimated costs at completion. Revenues for time and materials contracts are recorded based on agreed upon rates and actual hours incurred. Revenues for fixed unit rate contracts are based on actual units delivered. Contract costs primarily include direct labor, materials, and indirect costs related to contract performance.

        The Company's future operating results will be affected by, among other things, the duration of commercial waste processing contracts and amount of waste to be processed by the Company's commercial waste processing operations pursuant to these contracts; the timing and scope of DOE waste treatment projects; and the Company's waste receipts at its South Carolina disposal facility.

Critical Accounting Policies

        Critical accounting policies are those that are both important to the presentation of the Company's financial condition and results of operations and require management's most difficult, complex, or subjective judgements. The Company's most critical accounting policies relate to revenue recognition, decontamination and decommissioning liabilities, and impairment of long-lived assets and goodwill.

Revenue Recognition

Commercial Waste Processing

        Revenues from the Company's commercial waste processing facilities are recognized as waste is processed. The Company processes substantially all customer waste under fixed-unit-price contracts which allow for additional billings for burial price increases occurring within a set period of time following the Company's receipt of waste, or if the waste processed differs from contract specifications.

12

Upon completion of processing, the Company accrues for transportation, burial, and secondary waste processing costs. The Company maintains a waste tracking system ("Accutrack") that traces the processes undergone by customer waste material and assigns it a value based upon the contractual fixed-unit-price. The Company records revenue and adjusts its unbilled receivables and deferred revenue accounts monthly using the information maintained in Accutrack. On a quarterly basis, the Company performs a physical verification of the customer waste on site and reconciles that information to the general ledger. Concurrent with recording its quarterly adjustments relative to unbilled receivables and deferred revenue, the Company reconciles its recorded accrual for burial and secondary waste processing using the then current burial cost rates and its burial and processing schedules. If the burial cost rates or availability of the assumed burial sites were to change significantly, the Company's estimates of the cost of burial would likely increase.

Long-term Contracts

        Revenues under long-term contracts for engineering and technical support services are recognized using the percentage-of-completion method of accounting, using input measures such as labor and other direct costs, in accordance with the provisions of Statement of Position No. 81-1 ("SOP 81-1"), Accounting for Performance of Construction-Type and Certain Production-Type Contracts. Differences between incurred costs and estimated revenues, including estimated award fees, are recognized in the period in which work is performed. Costs and estimated earnings in excess of billings on uncompleted contracts are recorded as assets. Billings in excess of costs and estimated earnings on uncompleted contracts are recorded as liabilities and are included in deferred revenues. For contracts that do not fall under the guidance of SOP 81-1, such as commodity sales, processing of low-level radioactive waste, and others, revenue is recognized in accordance with Staff Accounting Bulletin 101, Revenue Recognition in Financial Statements.

        The percentage-of-completion method of accounting involves the use of various techniques to estimate project cost at completion. These estimates involve various assumptions and projections relative to the outcome of future events, including the quantity and timing of service deliveries. Also included are assumptions relative to future labor performance and rates, and projections relative to material and overhead costs. These assumptions involve various levels of expected performance improvements. The Company reevaluates its contract estimates monthly and reflects changes in estimates in the current and future periods. Included in revenues are amounts arising from contract terms that provide for invoicing a portion of the contract price at a date after delivery. Also included are negotiated values for hours delivered and anticipated price adjustments for contract changes, claims, escalation, and estimated earnings in excess of billing provisions, resulting from the percentage-of-completion method of accounting.

Decontamination and Decommissioning Liabilities

        The Company has responsibility related to the cost of decontamination and decommissioning of its commercial waste processing facilities and equipment in Tennessee. Such costs will generally be paid upon the closure of such facilities. The Company has estimated the cost of such decontamination and decommissioning and recorded a liability related thereto based on the present value of the future estimate. The Company evaluates the decommissioning cost estimate each year and makes adjustments for inflation, burial cost, and other risks.

        Similarly, the Company will be obligated for costs associated with the ultimate closure of the Barnwell Low-Level Radioactive Waste Disposal Facility in South Carolina and its buildings and equipment located at the Barnwell site. The Company has established a trust fund, as required by the state of South Carolina, to fund the site closure obligation, as well as recorded accruals related to these decontamination and decommissioning liabilities.

13

        Management updates its closure and remediation cost estimates for decontamination and decommissioning on an annual basis related to these obligations. These estimates are based on current technology and burial rates. Changes in technology, burial rates, laws and regulations, and the timing of closure could have a material impact on these estimates.

Impairment of Long-lived Assets and Goodwill

        The Company has made significant business acquisitions for which it has recorded the fair value of long-lived assets acquired and related goodwill and other intangible assets. The Company reviews long-lived assets for impairment in compliance with SFAS 144, Impairment or Disposal of Long-Lived Assets, which requires recoverability to be tested whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Goodwill is reviewed for impairment in compliance with SFAS 142, Goodwill and Other Intangible Assets, which requires impairment to be tested annually.

        The test for impairment of long-lived assets to be held and used is measured by a comparison of the carrying amount of the asset to its undiscounted future cash flows. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of assets exceed their fair values. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

        In assessing impairment of long-lived assets, goodwill, and other intangible assets, management makes estimates as to the future use of the acquired assets. These estimates are based upon current technology and its assessment of the future demand for the Company's services. Management is unable to reasonably estimate the impact that changes in technology or customer demand will have on the ultimate utilization and related cash flows of its assets. Changes in these factors could have a material impact on its estimates and the corresponding impairment analyses.

Results of Operations

Three Months Ended September 30, 2001 As Compared To Three Months Ended September 30, 2002

        Revenues for the Company increased by $6.1 million, or 9.1%, from $66.7 million in the third quarter of 2001 to $72.8 million in the third quarter of 2002. Federal Services revenues increased by $2.8 million, or 9.5%, from $29.8 million in the third quarter of 2001 to $32.7 million in the third quarter of 2002. Incremental revenues of $2.9 million were recognized in the third quarter of 2002 from a consolidated joint venture related to work performed to clean up and close an environmental technology site in Colorado. In addition, $1.9 million of the increase in revenues primarily related to increased work scope on the River Protection Project ("RPP") Vitrification projects. These revenue increases were partially offset by a decrease of $1.9 million relating to a reduction in work scope relating to work performed at the Los Alamos National Laboratories. Commercial Services revenues increased by $2.7 million, or 17.8%, from $15.3 million in the third quarter of 2001 to $18.1 million in the third quarter of 2002. The increase in revenues is primarily attributable to the award of new work in the radiological engineering services business and the site decontamination and decommissioning business due to an increase in volume of work on an existing contract, which together contributed $3.4 million of the increase in revenues. Primarily offsetting these increases was a decrease in revenues of $0.8 million due to a one-time special project performed in 2001 relating to non-utility cleanup and emergency response. Commercial Processing and Disposal revenues increased by $0.5 million, or 2.5%, from $21.6 million in the third quarter of 2001 to $22.1 million in the third quarter of 2002. This increase was primarily the result of a $2.3 million increase in revenues from a large component project in Memphis. Partially offsetting this increase was a decrease in revenues of $1.1 million from the Barnwell low-level radioactive waste disposal facility and the Duratek Consolidation & Services Facility, due to lower volumes of waste received in the quarter ended September 30, 2002 as compared to the quarter ended September 30, 2001, and a decrease in revenues of $0.8 million relating to the

14

commercial processing operations in Tennessee, primarily due to a change in the processed waste mix and lower processing volume.

        Gross profit for the Company increased by $4.6 million, or 27.3%, from $17.0 million in the third quarter of 2001 to $21.6 million in the third quarter of 2002. As a percentage of revenues, gross profit increased from 25.4% in the third quarter of 2001 to 29.6% in the third quarter of 2002. Gross profit from Federal Services increased by $2.2 million, from $6.8 million in the third quarter of 2001 to $9.0 million in the third quarter of 2002. This increase primarily related to the increased work scope on the RPP Vitrification projects offset by a decrease relating to a reduction in work scope relating to work performed at the Los Alamos National Laboratories. Gross profit from Commercial Services increased by $1.3 million, from $6.1 million in the third quarter of 2001 to $7.4 million in the third quarter of 2002. This increase was primarily due to the increased revenues from the radiological engineering services business and the site decontamination and decommissioning business. Gross profit from Commercial Processing and Disposal increased by $1.1 million, from $4.1 million in the third quarter of 2001 to $5.2 million in the third quarter of 2002. This increase was primarily attributable to the commercial processing operations in Tennessee, which had increased gross profit of $2.0 million. This increase was primarily due to a decrease in labor expense as a result of a reduction in the work force, a more favorable mix of waste than previously estimated on a significant high radiation process completed in 2002, lower burial expense due to a reduction in the burial rate in 2002, lower aged waste volume in 2002, and higher margin work performed in 2002. Partially offsetting these increases were decreases relating to the Barnwell low-level radioactive waste disposal facility and the Duratek Consolidation & Services Facility due to lower volumes of waste received in 2002, and the large component project in Memphis in 2001.

        Selling, general and administrative expenses increased by $1.2 million, or 9.4%, from $12.7 million in the third quarter of 2001 to $13.9 million in the third quarter of 2002. As a percentage of revenues, selling, general and administrative expenses was unchanged at 19.1%. The increase in selling, general and administrative expense is primarily attributable to higher professional service fees, which include bank consultant fees, and personnel related expenses, which were partially offset by lower marketing expenses.

        Interest expense, net of interest income, decreased by $1.2 million from $2.4 million in the third quarter of 2001 to $1.2 million in the third quarter of 2002. The decrease was the result of the lower average borrowings and lower interest rates.

        Income taxes increased from $0.8 million in the third quarter of 2001 to $2.7 million in the third quarter of 2002. The Company's effective tax rate was 46.3% and 40.5% in 2001 and 2002, respectively. The decrease in the Company's effective tax rate was due to a reduction in the impact of non-deductible expenses on taxable income, principally relating to goodwill amortization.

Nine Months Ended September 30, 2001 As Compared To Nine Months Ended September 30, 2002

        Revenues for the Company increased by $8.1 million, or 3.9%, from $206.2 million in 2001 to $214.4 million in 2002. Federal Services revenue increased by $14.2 million, or 16.7%, from $84.9 million in 2001 to $99.0 million in 2002. Revenues increased $16.7 million primarily due to increased work scope and the award of new work primarily relating to the K25/K27 Gaseous Diffusion Plant in Oak Ridge, Tennessee, the waste removal operations at the Hanford 100 area, work performed on the RPP Vitrification projects, and increased waste shipments at the Los Alamos National Laboratories. In addition, incremental revenues of $2.9 million were recognized in the third quarter of 2002 from a consolidated joint venture related to work performed to clean up and close an environmental technology site in Colorado. Partially offsetting these increases were a decrease of $4.0 million relating to revenues recognized in 2001 from the sale of limited rights to the Company's vitrification technology for use at the DOE Hanford Washington site and a $1.1 million decrease in

15

revenues relating to a decrease in work scope relating to environmental and waste management support work for the United States Department of Energy and its subcontractors. Commercial Processing and Disposal revenues increased by $2.1 million, or 3.2%, from $66.4 million in 2001 to $68.6 million in 2002. This increase was primarily the result of a $4.2 million increase in revenues from a large component project in Memphis and $1.4 million in revenues recognized by the Barnwell low-level radioactive waste disposal facility relating to a decision by the South Carolina Public Service Commission to allow a portion of the amortization expense of the Barnwell Operating Rights as a reimbursable allowable cost. The incremental revenues recognized during 2002 include an adjustment to record revenue for the reimbursement of this amortization expense since July 1, 2000, the date that the decision by the South Carolina Public Service Commission went into effect. Partially offsetting these increases were a $2.3 million decrease in revenues from the Barnwell low-level radioactive waste disposal facility and a $1.2 million decrease in revenues from the Duratek Consolidation & Services Facility due to lower volumes of waste received in 2002. Commercial Services revenues decreased by $8.2 million, or 14.9%, from $54.9 million in 2001 to $46.7 million in 2002. This was primarily the result of a $6.5 million decrease in revenues from the technical support services business which was sold in April 2001, a $5.7 million decrease in revenues from the radiological engineering services business and the completion of a large contract in 2001 relating to non-utility clean up and emergency response. Partially offsetting these decreases was an increase in revenues of $4.0 million from the site decontamination and decommissioning business due to an increase in volume of work on an existing contract.

        Gross profit for the Company increased by $12.6 million, or 26.3%, from $47.9 million in 2001 to $60.5 million in 2002. As a percentage of revenues, gross profit increased from 23.2% in 2001 to 28.2% in 2002. Gross profit from Commercial Processing and Disposal increased by $12.4 million, from $6.4 million in 2001 to $18.8 million in 2002. This increase was primarily due to a more favorable mix of waste than previously estimated on a significant high radiation process completed in 2002, which contributed $2.5 million to the increase, a decrease in labor expense as a result of a reduction in the work force, lower material expense due to processing efficiencies realized, and a decrease in transportation expense due to the increased use of rail transportation in the commercial processing operations. In addition, the $1.4 million in revenues recognized by the Barnwell low-level radioactive waste disposal facility on the amortization of Barnwell operating rights also contributed to the increase. Gross profit from Federal Services increased by $0.7 million, or 3.2%, from $22.6 million in 2001 to $23.3 million in 2002. This increase is primarily attributable to the increase in revenues, offset by the gain in 2001 of $3.7 million on the sale of limited rights to the Company's vitrification technology for use at the DOE's Hanford Washington site. Gross profit from Commercial Services decreased by $0.5 million, or 2.8%, from $18.9 million in 2001 to $18.3 million in 2002. This decrease in gross profit was primarily due to the decrease in revenues from the radiological engineering services business and a $0.7 million decrease from the technical support services business that was sold in April 2001 and the completion of a large contract in 2001 relating to non-utility clean up and emergency response, partially offset by an increase in gross profit from the site decontamination and decommissioning business.

        Selling, general and administrative expenses increased by $2.5 million, or 7.1%, from $36.1 million in 2001 to $38.7 million in 2002. As a percentage of revenues, selling, general and administrative expenses increased from 17.5% in 2001 to 18.1% in 2002. The increase in selling, general and administrative expenses is primarily attributable to higher professional service fees, which include bank consultant fees, and personnel related expenses, which was partially offset by lower marketing expenses.

        Interest expense, net of interest income, decreased by $4.3 million from $8.6 million in 2001 to $4.3 million in 2002. The decrease was the result of the lower average borrowings and lower interest rates.

        Income taxes increased from $1.4 million in 2001 to $7.2 million in 2002. The Company's effective tax rate was 43.5% and 40.5% in 2001 and 2002, respectively. The decrease in the Company's effective

16

tax rate was due to a reduction in the impact of non-deductible expenses on taxable income, principally relating to goodwill amortization.

Liquidity and Capital Resources

        The Company generated $16.4 million in cash flows from operating activities in the first nine months of 2002. Cash flow from operating activities includes activities relating to the operations of the Barnwell low-level radioactive waste disposal facility in South Carolina. Under South Carolina law, the Company is required to bill customers based on the amounts agreed upon with the State. On an annual basis, following the State's fiscal year-end on June 30, the Company will remit amounts billed to customers of the waste disposal site less its fee for operating the site during such fiscal year. During the nine months ended September 30, 2002, the Company had collected approximately $19.0 million, net of allowable costs from waste processing activity plus an applicable margin, from customers of the waste disposal facility and remitted to the State approximately $21.5 million in July 2002. The remaining cash flow from operating activities of $18.9 million is due to an increase in working capital from operations, net of $9.0 million depreciation and amortization expenses.

        The Company used approximately $2.2 million in cash flows for investing activities for purchases of property and equipment in the first nine months of 2002.

        Cash flows from operating activities during the first nine months of 2002 were used principally to repay borrowings under the Company's bank credit facility and to pay down long-term debt.

        In October 1999, WMNS was awarded the Oak Ridge Environmental Management Waste Management Facility Contract to design, construct, operate, and close a 400,000 cubic yard land disposal cell on the DOE's Oak Ridge Reservation. Under the terms of the June 8, 2000 purchase agreement between the Company and Waste Management, Inc. ("WMI"), WMI will provide up to $11.9 million in project financing at a fixed rate of 9.0% to the Company for the design and construction phase of the contract, which was completed in March 2002. As of September 30, 2002, the Company had borrowings outstanding of $5.2 million under the project financing agreement, and during 2002 has repaid $6.7 million. Cash generated from the project will be used to repay the borrowing under the project financing agreement.

        The Company has a bank credit facility (the "credit facility") which provides for borrowings of up to $130.0 million. The credit facility consists of a five-year $40.0 million revolving line of credit (which has a temporary limit of $25.0 million as of October 2002, that was amended effective March 27, 2002, see below), a five-year $50.0 million term loan and a six and one-half year $40.0 million term loan. The term loans must be prepaid in an amount equal to 50% of excess cash flows, as defined in the credit agreement. Borrowings under the credit facility bear interest at LIBOR plus an applicable margin, or at the Company's option, the prime rate plus an applicable margin. The applicable margin is determined based on the Company's performance and can range from 2.25% to 5.0% for LIBOR based borrowings and 1.75% to 4.0% for prime based borrowings. The facility requires the Company to maintain certain financial ratios and restricts the payment of dividends on the Company's common and preferred stock and the Company's ability to make acquisitions. The Company has accrued dividends of $2.2 million on its outstanding convertible redeemable preferred stock.

        As of December 31, 2001, the Company was not in compliance with certain financial and technical covenants included in the credit agreement. On March 27, 2002, the credit agreement was amended to waive all existing non-compliance as well as to adjust certain covenants either permanently or for 2002. Such covenants include several financial ratios and financial and operational requirements, which are measured on a monthly, quarterly or annual basis. Under the amendment, there was a 0.5% increase in the applicable margin on all borrowings. In addition, the maximum amount available under the revolving line of credit portion of the credit facility was reduced from $30.0 million to $18.0 million as of March 27, 2002. This availability was temporarily increased to $35.0 million for the period from

17

July 26, 2002 through September 30, 2002 to meet certain working capital requirements of the Company, and will decrease incrementally as follows:

As of:	Through	Availability
October 1, 2002	October 31, 2002	$25.0 million
November 1, 2002	December 31, 2002	$18.0 million
January 1, 2003	February 28, 2003	$15.0 million

        The amount of available borrowings under the revolving line of credit portion of the credit facility after February 28, 2003 will be determined by the Company's lenders. At September 30, 2002, after giving effect to this amendment, the Company had $22.1 million of borrowings available under the revolving credit portion of the credit facility. At September 30, 2002, the Company had $7.3 million in outstanding borrowings under the revolving line of credit portion of its credit facility, $24.9 million term loans bearing interest at LIBOR plus 3.25% (5.07%), and $38.9 million term loans bearing interest at LIBOR plus 3.75% (5.57%).

        The Company believes that cash flows from operations and borrowings available under its credit facility will be sufficient to meet its operating needs for at least the next twelve months. However, if management is unable to improve the Company's operating results during 2002 to fund operations and scheduled reductions in available borrowings under its credit facility, or is unable to meet the monthly, quarterly, or annual financial and technical covenants under its revised credit facility, the Company may need to obtain further modifications to the credit agreement from its banks and/or additional sources of funding. There can be no assurance that such modifications and/or funding, if needed, will be available.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

        The Company's major market risk relates to changing interest rates. At September 30, 2002, the Company had floating rate long-term debt of $71.0 million, of which the current portion is $10.4 million. Average outstanding borrowings under the revolving credit portion of the credit facility were $3.5 million during the nine months ended September 30, 2002. The Company has not purchased any interest rate derivative instruments but may do so in the future. In addition, the Company does not have any material foreign currency or commodity risk.

Item 4. Controls and Procedures

        Within 90 days prior to the date of this report, the Company carried out, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information which is required to be included in the periodic reports that the Company must file with the Securities and Exchange Commission.

        There have been no significant changes in the Company's internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation.

18

Part II Other Information

Item 1. Legal Proceedings

        Refer to the Company's annual report on Form 10-K for the year ended December 31, 2001 for a discussion of legal proceedings.

Item 3. Defaults Upon Senior Securities

        See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

Item 5. Other Information

In response to the "safe harbor" provisions contained in the Private Securities Litigation Reform Act of 1995, the Company is including in this Quarterly Report on Form 10-Q the following cautionary statements which are intended to identify certain important factors that could cause the Company's actual results to differ materially from those projected in forward-looking statements of the Company made by or on behalf of the Company. Many of these factors have been discussed in prior filings with the Securities and Exchange Commission.

        The Company's future operating results are dependent upon the Company's ability to manage its commercial waste processing operations, including obtaining commercial waste processing contracts and processing the waste under such contracts in a timely and cost-effective manner. In addition, the Company's future operating results are dependent upon the timing and awarding of contracts by the DOE for the cleanup of other waste sites administered by it. The timing and award of such contracts by the DOE is directly related to the response of governmental authorities to public concerns over the treatment and disposal of radioactive, hazardous, mixed and other wastes. The lessening of public concern in this area or other changes in the political environment could adversely affect the availability and timing of government funding for the cleanup of DOE and other sites containing radioactive and mixed wastes. Finally, a significant component of the Company's direct costs include the cost of disposal of materials in licensed landfills. The ability to reflect increased costs in pricing to customers, the availability of these licensed facilities, and any changes in the rate structures of such licensed facilities have the potential to affect the operating results of the Company.

        The Company's future operating results may fluctuate due to factors such as: the timing of new commercial waste processing contracts and duration of and amount of waste to be processed pursuant to those contracts; the acceptance and implementation of the Company's waste treatment technologies in the government and commercial sectors; the evaluation by the DOE and commercial customers of the Company's technologies versus other competing technologies as well as conventional storage and disposal alternatives; and the timing of new government waste processing projects, including those pursued jointly with others, and the duration of such projects.

19

Item 6. Exhibits and Reports on Form 8-K

a.

Exhibits

See accompanying Index to Exhibits.

b.

Reports

Current report on Form 8-K filed on August 14, 2002.

20

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DURATEK, INC.
Dated: November 14, 2002	BY:	/s/  ROBERT F. SHAWVER Robert F. Shawver Executive Vice President and Chief Financial Officer
Dated: November 14, 2002	BY:	/s/  WILLIAM M. BAMBARGER William M. Bambarger Corporate Controller

21

CERTIFICATIONS

I, Robert E. Prince, Chief Executive Officer, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Duratek, Inc. ("Duratek");

2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of Duratek as of, and for, the periods presented in this quarterly report;

4.

Duratek's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Duratek and we have:

a)

designed such disclosure controls and procedures to ensure that material information relating to Duratek, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)

evaluated the effectiveness of Duratek's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

Duratek's other certifying officer and I have disclosed, based on our most recent evaluation, to Duratek's auditors and the audit committee of Duratek's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect Duratek's ability to record, process, summarize and report financial data and have identified for Duratek's auditors any material weaknesses in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in Duratek's internal controls; and

6.

Duratek's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002 BY: /s/  ROBERT E. PRINCE Robert E. Prince
Chief Executive Officer

22

I, Robert F. Shawver, Chief Financial Officer, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Duratek, Inc. ("Duratek");

2.

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of Duratek as of, and for, the periods presented in this quarterly report;

4.

Duratek's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Duratek and we have:

a)

designed such disclosure controls and procedures to ensure that material information relating to Duratek, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)

evaluated the effectiveness of Duratek's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c)

presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.

Duratek's other certifying officer and I have disclosed, based on our most recent evaluation, to Duratek's auditors and the audit committee of Duratek's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies in the design or operation of internal controls which could adversely affect Duratek's ability to record, process, summarize and report financial data and have identified for Duratek's auditors any material weaknesses in internal controls; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in Duratek's internal controls; and

6.

Duratek's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002 BY: /s/  ROBERT F. SHAWVER Robert F. Shawver
Chief Financial Officer

23

EXHIBITS INDEX

Exhibit No.
3.1	Amended and Restated Certificate of Incorporation of the Registrant. Incorporated herein by reference to Exhibit 3.1 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996. (File No. 0-14292)
3.2	By-Laws of the Registrant. Incorporated herein by reference to Exhibit 3.3 of the Registrant's Form S-1 Registration Statement No. 33-2062.
4.1	Certificate of Designations of the 8% Cumulative Convertible Redeemable Preferred Stock dated January 23, 1995. Incorporated herein by reference to Exhibit 4.1 of the Registrant's Form 8-K filed on February 1, 1995. (File No. 0-14292)
4.2	Stock Purchase Agreement among Carlyle Partners II, L.P., Carlyle International Partners II, L.P., Carlyle International Partners III, L.P., C/S International Partners, Carlyle-GTSD Partners, L.P., Carlyle-GTSD Partners II, L.P., GTS Duratek, Inc. and National Patent Development Corporation dated as of January 24, 1995. Incorporated herein by reference to Exhibit 4.2 of the Registrant's Form 8-K filed on February 1, 1995. (File No. 0-14292)
4.3	Stockholders Agreement by and among Carlyle Partners II, L.P., Carlyle International Partners II, L.P., Carlyle International Partners III, L.P., C/S International Partners, Carlyle-GTSD Partners, L.P., Carlyle-GTSD Partners II, L.P., GTS Duratek, Inc. and National Patent Development Corporation dated as of January 24, 1995. Incorporated herein by reference to Exhibit 4.3 of the Registrant's Form 8-K filed on February 1, 1995. (File No. 0-14292)
4.4	Registration Rights Agreement by and among Carlyle Partners II, L.P., Carlyle International Partners II, L.P., Carlyle International Partners III, L.P., C/S International Partners, Carlyle-GTSD Partners, L.P., Carlyle-GTSD Partners II, L.P., GTS Duratek, Inc. and National Patent Development Corporation dated as of January 24, 1995. Incorporated herein by reference to Exhibit 4.4 of the Registrant's Form 8-K filed on February 1, 1995. (File No. 0-14292)
10.1	1984 Duratek Corporation Stock Option Plan, as amended. Incorporated herein by reference to Exhibit 10.9 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1990.
10.2	License Agreement dated as of August 17, 1992 between GTS Duratek, Inc. and Dr. Theodore Aaron Litovitz and Dr. Pedro Buarque de Macedo Incorporated herein by reference to Exhibit 10.9 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992. (File No. 0-14292)

24

10.3	Amended and Restated Credit Agreement dated as of June 8, 2000 by and among GTS Duratek, Inc., GTS Duratek Bear Creek, Inc., GTS Duratek Colorado, Inc., Hittman Transport Services, Inc., GTS Instrument Services, Incorporated, General Technical Services, Inc., GTSD Sub III, Inc., GTSD Sub IV, Inc., Frank W. Hake Associates LLC, Chem-Nuclear Systems L.L.C., Waste Management Federal Services, Inc., Waste Management Federal Services of Idaho, Inc., Waste Management Federal Services of Hanford, Inc., Waste Management Technical Services, Inc., Waste Management Geotech, Inc., the Lenders party thereto, First Union National Bank, as Administrative Agent, Credit Lyonnais New York Branch, as Documentation Agent, Fleet National Bank, as Syndication Agent, and First Union Securities, Inc., as Lead Arranger and Book Manager. Incorporated herein by reference to Exhibit 99.4 to the Registrant's Current Report on Form 8-K filed on June 22, 2000. (File No. 0-14292)
10.4	Second Amended and Restated Security Agreement dated as of June 8, 2000 made by GTS Duratek, Inc., GTS Duratek Bear Creek, Inc., GTS Duratek Colorado, Inc., Hittman Transport Services, Inc., GTS Instrument Services, Incorporated, General Technical Services, Inc., GTSD Sub III, Inc., GTSD Sub IV, Inc., Frank W. Hake Associates, L.L.C., Chem-Nuclear Systems, L.L.C., Waste Management Federal Services, Inc., Waste Management Federal Services of Idaho, Inc., Waste Management Federal Services of Hanford, Inc., Waste Management Technical Services, Inc., Waste Management Geotech, Inc., and First Union National Bank, as Collateral Agent. Incorporated herein by reference to Exhibit 99.5 of the Registrant's Current Report on Form 8-K filed on June 22, 2000. (File No. 0-14292)
10.5	Purchase Agreement by and among Chemical Waste Management Inc., Rust International, Inc., CNS Holdings, Inc. and GTS Duratek, Inc. dated March 29, 2000. Incorporated herein by reference to Exhibit 99.2 of the Registrant's Current Report on Form 8-K filed on June 22, 2000. (File No. 0-14292)
10.6	Amendment No. 1 to Purchase Agreement and Disclosure Letter by and among Chemical Waste Management Inc., Rust International, Inc., CNS Holdings, Inc. and GTS Duratek, Inc. dated June 8, 2000. Incorporated herein by reference to Exhibit 99.3 of the Registrant's Current Report on Form 8-K filed on June 22, 2000. (File No. 0-14292)
10.7	1999 GTS Duratek, Inc. Stock Option and Incentive Plan. Incorporated herein by reference to Exhibit A of the Registrant's 2000 Proxy Statement. (File No. 0-14292)
10.8	First Amendment and Waiver to Credit Agreement dated as of April 16, 2001 made by Duratek, Inc., as borrower and as agent for the Subsidiary Borrowers, the Lenders party to the Credit Agreement, and First Union National Bank, as Administrative Agent. Incorporated herein by reference to Exhibit 10.14 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 filed on April 18, 2001. (File No. 0-14292)
10.9	Second Amendment and Waiver to Credit Agreement dated as of November 14, 2001 made by Duratek, Inc., as borrower and as agent for the Subsidiary Borrowers, the Lenders party to the Credit Agreement, and First Union National Bank, as Administrative Agent. Incorporated herein by reference to Exhibit 10.15 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 filed on November 14, 2001. (File No. 0-14292)

25

10.10	Third Amendment and Waiver to Credit Agreement dated as of March 27, 2002 made by Duratek, Inc., as borrower and as agent for the Subsidiary Borrowers, the Lenders party to the Credit Agreement, and First Union National Bank, as Administrative Agent. Incorporated herein by reference to Exhibit 10.16 of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2001 filed on March 29, 2002. (File No. 0-14292)
10.11	Executive Employment Agreement dated June 1, 2002 by and between Duratek, Inc. and Robert E. Prince. Incorporated herein by reference to Exhibit 10.15 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
10.12	Executive Employment Agreement dated June 1, 2002 by and between Duratek, Inc. and Robert F. Shawver. Incorporated herein by reference to Exhibit 10.16 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
10.13	Executive Employment Agreement dated June 1, 2002 by and between Duratek, Inc. and C. Paul Deltete. Incorporated herein by reference to Exhibit 10.17 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
10.14	Executive Employment Agreement dated June 1, 2002 by and between Duratek, Inc. and Regan E. Voit. Incorporated herein by reference to Exhibit 10.18 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
10.15	Employment Agreement dated June 8, 2000 by and between Waste Management Federal Services, Inc. and Thomas E. Dabrowski. Incorporated herein by reference to Exhibit 10.19 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
10.16	Amendment to Employment Agreement dated June 1, 2002 by and between Duratek Federal Services, Inc. and Thomas E. Dabrowski. Incorporated herein by reference to Exhibit 10.20 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
10.17	Executive Employment Agreement dated June 1, 2002 by and between Duratek, Inc. and Michael F. Johnson. Incorporated herein by reference to Exhibit 10.21 of the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
10.18	Executive Employment Agreement dated November 1, 2002 by and between Duratek, Inc. and William R. Van Dyke. Filed herewith.
10.19	Duratek, Inc. 2002 Executive Compensation Plan. Filed herewith.

26

QuickLinks

DURATEK, INC. AND SUBSIDIARIES TABLE OF CONTENTS

Part I Financial Information
Item 1. Financial Statements

DURATEK, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands of dollars, except per share amounts)
DURATEK, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts)
DURATEK, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY Nine months ended September 30, 2002 (in thousands of dollars)
DURATEK, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands of dollars)
DURATEK, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (in thousands of dollars, except per share amounts)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Item 4. Controls and Procedures
Part II Other Information
Item 1. Legal Proceedings
Item 3. Defaults Upon Senior Securities
Item 5. Other Information

Item 6. Exhibits and Reports on Form 8-K

SIGNATURES
CERTIFICATIONS
EXHIBITS INDEX

EX-10.18

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.18

EXECUTIVE EMPLOYMENT AGREEMENT

        This Executive Employment Agreement (this "Agreement") is made effective November 1, 2002, by and between Duratek, Inc., a Delaware corporation having its principal place of business at 10100 Old Columbia Road, Columbia, Maryland 21046 (hereinafter, "Company"), and William R. Van Dyke (hereinafter, "Employee").

RECITALS

WHEREFORE, Company desires to employ Employee as Senior Vice President of Company, and President, Duratek Federal Services subject to the terms and provisions of this Agreement, and Employee desires such employment with Company, subject to the terms and provisions of this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1.    Term.    Unless earlier terminated as provided herein, Company hereby agrees to employ Employee and Employee hereby accepts such employment for a two year period commencing November 1, 2002 and ending on November 1, 2004, upon the terms and conditions hereinafter set forth. Commencing on November 1, 2004 and each November 1st thereafter, the Term shall automatically be extended for one additional year, unless this Agreement has been previously terminated pursuant to Section 8 of this Agreement or, not later than the May 1st immediately preceding such November 1st anniversary, Company or Employee shall have given written notice to the other that it does not wish to extend this Agreement. For the purposes of this Agreement, the term as defined in this Section, including any extension thereof, shall be the "Term."

2.    Duties.    During the Term, Employee shall serve as Senior Vice President (hereinafter, "Senior Vice President") of Company and President, Duratek Federal Services and shall report to, and have those duties, responsibilities, and authority assigned him from time to time by, the Chief Executive Officer of Company (hereinafter, the "CEO"). Employee shall have the powers and authority consistent with such responsibilities, duties, and authority. Employee shall devote substantially all his working time, attention, knowledge, and skills faithfully, diligently, and to the best of his ability, in furtherance of the business and activities of Company. During the Term, Employee shall refrain from engaging in any activity which is or may be contrary to the welfare, interests, or benefits of Company and from engaging in any activity which is or may be competitive with the activities of Company. The principal place of performance by Employee of his duties hereunder shall be Company's principal offices in Lakewood, Colorado or such other location as agreed to by Employee and Company, although Employee may be required to travel outside of the area where Company's principal executive offices are located in connection with the business of Company, to an extent substantially consistent with Employee's present business travel obligations. Nothing in this Section shall preclude Employee from engaging in charitable, professional, and community activities, in each case as long as such activities do not interfere, conflict, or give the appearance of conflicting in any way with Employee's performance under this Agreement.

3.    Salary.    In consideration for the services to be rendered by Employee hereunder and for all rights and covenants granted herein, Company shall pay to Employee a gross salary in the amount of $220,000.00 per year (hereinafter, the "Salary"). This Salary shall be paid in equal monthly or bi-weekly installments, in accordance with the customary payroll practices of Company and subject to such deductions as are required by law and applicable regulations. This salary may be increased from time to time at the discretion of the Compensation Committee of the Board of Directors of the Company.

4.    Cash Bonus.    Employee will continue to be eligible to receive cash bonuses pursuant to the Company's Executive Compensation Plan (the "Executive Compensation Plan") effective January 1, 2003; provided, however, that Company may not reduce Employee's target bonus amount (represented as a percentage of base salary) from that in effect as of the date hereof or as may be increased from time to time. In the event that Company amends or terminates the Executive Compensation Plan, Company shall provide Employee with an annual cash bonus program that will provide him with an opportunity to realize an annual cash bonus which is not less than the target bonus amount (represented as a percentage of base salary) that exists under the Executive Compensation Plan at the time it is amended or terminated, which opportunity shall be reasonably comparable to Employee's opportunity under the Executive Compensation Plan as of the date hereof. Employee shall remain in the Key Leader Incentive Program, as currently enrolled, through December 31, 2002.

5.    Equity Incentive Plan.    Employee will continue to be eligible to receive equity incentives pursuant to the Executive Compensation Plan. All awards pursuant to the Executive Compensation Plan shall be subject to the terms and provisions of the 1999 Stock Option and Incentive Plan, or any similar plan, and any award agreement with respect to such award. The vesting, exercisability and termination provisions regarding such awards shall be subject to the terms and provisions of the 1999 Stock Option and Incentive Plan, or other similar plan pursuant to which the award was made, and the corresponding award agreement.

6.    Employee Benefits.    Employee shall be entitled to participate in or receive benefits under any employee benefit plan, arrangement or perquisite made available by Company to its executives and key management employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans, arrangements and perquisites. Nothing paid to Employee under any plan, arrangement or perquisite presently in effect or made available in the future shall be deemed to be in lieu of the salary and bonus payable to Employee pursuant to Sections 3, 4, and 5 hereof. Any payments or benefits payable to Employee hereunder in respect of any year during which Employee is employed by Company for less than the entire such year shall, unless otherwise provided in the applicable plan or arrangement be prorated in accordance with the number of days in such year during which he is so employed.

7.    Vacations.    Employee shall be entitled to five weeks' vacation (personal time benefit) in each calendar year, or such greater amount of vacation as may be determined in accordance with Company's vacation policy as in effect on the date hereof. Employee shall also be entitled to all paid holidays and personal days given by Company to its executives.

8.    Termination.    Notwithstanding the provisions of Section 1 hereof, Employee's employment with Company may be earlier terminated by either party at any time, subject to the following restrictions (except that termination due to death or disability of Employee shall be governed by Section 9 below):

        (a)    at any time during the Term, Company may terminate this Agreement for Cause upon written notice to Employee. For purposes hereof, "Cause" shall be defined as: (i) Employee's willful material misconduct or neglect in the performance of his duties as determined by the CEO; (ii) Employee's conviction by a court of competent jurisdiction of any felony, offense punishable by imprisonment in a state or federal penitentiary, or any offense, civil or criminal, involving fraud, moral turpitude or immoral conduct; (iii) Employee's use of illegal drugs or abusive use of prescription drugs as determined by a licensed physician or physicians designated by Company to examine Employee; or (iv) Employee's willful material breach of this Agreement as determined by the CEO, which breach is not cured within thirty (30) days after Employee's receipt of written notice from Company specifying such breach and demanding a cure thereof;

        (b)    at any time during the Term and upon six (6) months prior written notice to Company, Employee may terminate this Agreement for "Good Reason." For the purposes of this Agreement,

2

"Good Reason" shall mean (i) Company's failure to perform or observe any of the material terms or provisions of this Agreement and continued failure of Company to cure such default within thirty (30) days after written demand for performance has been given to Company by Employee, which demand shall describe specifically the nature of such alleged failure to perform or observe such material terms or provisions, (ii) a material reduction in the scope of Employee's duties, authority, responsibilities or title as in effect immediately prior to such reduction; (iii) Company's assignment to Employee of duties which are inconsistent with Employee's position as Senior Vice President; (iv) a reduction by Company in Employee's base salary or in any other benefits made available to other senior executives of Company; or (v) Employee's relocation to a facility or a location more than fifty (50) miles from the then present location without Employee's prior written consent, and in each case the failure of Company to cure the same within thirty (30) days after receipt of written notice thereof from Employee;

        (c)    at any time during the Term and upon six (6) months prior written notice to Employee, Company may terminate this Agreement for any reason other than Cause, and at any time during the Term and upon six (6) months prior written notice to Company, Employee may terminate this Agreement for any reason other than Good Reason;

        (d)    upon termination of this Agreement by Company for Cause or by Employee for any reason other than Good Reason, Employee shall be entitled only to his Salary and any other vested and determinable compensation, in accordance with the provisions of those Plans, up to the date of the termination of this Agreement, and Company shall have no further obligation or duties to Employee, and Employee shall have no further obligation or duties to Company except as provided in Sections 10, 11, and 12;

        (e)    upon termination of this Agreement by Company for any reason other than Cause or by Employee for Good Reason, Company shall continue to pay Employee's Salary and provide Employee with benefits comparable to those Employee received pursuant to Sections 6 and 7, immediately prior to the effective date of termination through the twelfth full month following the effective date of termination (hereinafter, the "Severance Period"), and Employee shall have no further obligations or duties to Company, except as provided in Sections 10, 11, and 12. Company shall have no further obligation or duties to Employee other than as set forth in this Section 8(e). Employee's entitlement to amounts owing pursuant to this Agreement shall not be dependent upon Employee's efforts to "mitigate" loss or to find other employment, nor shall the amounts owing pursuant to this Agreement be subject to offset by compensation earned from a subsequent employer.

9.    Disability and Death.    (a) If during the Term Employee shall become unable to perform his duties or carry out his responsibilities by reason of illness or injury, Company shall continue to pay or provide to Employee Salary continuation under the terms of the disability insurance coverage for officers of Company. If, however, the disability continues for an uninterrupted period exceeding six calendar months, Company, at its election, may terminate this Agreement with no further obligations by Company. Employee shall be entitled to any benefit for which Employee qualifies under any long-term disability plan of Company. The inability of Employee to perform his duties and carry out his responsibility because of illness or injury shall be determined by a qualified physician or physicians designated by Company to examine Employee. To the extent physically and mentally capable, Employee shall furnish information and assistance to Company and shall be available to Company to undertake reasonable assignments consistent with the dignity, importance, and scope of Employee's prior position and current physical and mental health.

        (b)    If during the Term Employee shall die, this Agreement shall terminate automatically. In this event, Company shall pay to Employee's estate or to his beneficiaries, Employee's Salary and any other vested and determinable compensation, in accordance with the provisions of those Plans,

3

up to the date of death. Company shall have no further obligation or duties to Employee's estate or to his beneficiaries.

10.    Restrictive Covenants.

        (a)    Confidentiality.    During the Term and continuing subsequent to any termination or expiration of this Agreement, Employee shall maintain Information, as defined in Section 10(a)(i) below, as secret and confidential unless Employee is required to disclose Information pursuant to the terms of a valid and effective order issued by a court of competent jurisdiction or a governmental authority. Employee shall use Information solely for the purpose of carrying out those duties assigned him as an employee of Company and not otherwise. The disclosure of Information to Employee shall not be construed as granting to Employee any license under any copyright, trade secret or any right of ownership or right to use the information whatsoever.

        (i)    For the purposes of this Section 10, "Information" shall mean information related to Company's business. Such information shall include, but shall not be limited to: (w) any financial, business, planning, operations, services, potential services, products, potential products, technical information, intellectual property, trade secrets and/or know-how, formulas, production, purchasing, marketing, sales, personnel, customer, supplier, or other information of Company; (x) any papers, data, records, processes, methods, techniques, systems, models, samples, devices, equipment, compilations, invoices, customer lists, or documents of Company; (y) any confidential information or trade secrets of any third party provided to Company in confidence or subject to other use or disclosure restrictions or limitations; and (z) any other information, written, oral or electronic, whether existing now or at some time in the future, whether pertaining to current or future developments, and whether accessed prior to Employee's tenure with Company or to be accessed during his future employment or association with Company, which pertains to Company's affairs or interests or with whom or how Company does business. Company acknowledges and agrees that Confidential Information shall not include information which is or becomes publicly available other than as a result of a disclosure by Employee.

        (ii)  Employee shall promptly notify Company if he has reason to believe that the unauthorized use, possession, or disclosure of any Information has occurred or may occur.

        (iii)  All physical items containing Information, including, without limitation, the business plan, know-how, collection methods and procedures, advertising techniques, marketing plans and methods, sales techniques, documentation, contracts, reports, letters, notes, any computer media, customer lists and all other information and materials of Company's business and operations, shall remain the exclusive and confidential property of Company and shall be returned, along with any copies or notes of Employee made thereof or therefrom, to Company when Employee ceases his employment with Company.

        (b)  Non-Competition.    Employee hereby covenants and agrees that at no time during Employee's employment with Company and for a period of one year immediately following termination of Employee's employment with Company, whether voluntary or involuntary, shall Employee (i) develop, own, manage, operate, or otherwise engage in, participate in, represent in any way or be connected with, as officer, director, partner, owner, employee, agent, independent contractor, consultant, proprietor, stockholder (except for the ownership of a less than 5% stock interest in a publicly traded company), or otherwise, any business or activity competing with Company or its affiliates within the United States; (ii) act in any way, directly or indirectly, with the purpose or effect of soliciting, diverting or taking away any business, customer, client or any supplier of Company; or (iii) otherwise compete with Company in the sale or licensing, directly or indirectly, as principal, agent or otherwise, of any products competitive with the products, or services competitive with the services, developed or marketed by Company within the United

4

States. Employee acknowledges that he will provide unique services to Company and that this covenant has unique, substantial, and immeasurable value to Company. Notwithstanding the foregoing, to the extent that the Employee will be employed by or perform activities on behalf of a division or subsidiary of a business organization that competes with the Company, provided that such division or subsidiary does not compete with the Company and provided that the Employee can demonstrate to the Company's reasonable satisfaction that such employment or provision of services will not have an adverse competitive effect on the Company, such employment or provision of services shall not be prohibited hereunder.

        (c)    Non-solicitation or hiring of employees.    Employee hereby covenants and agrees that at no time during Employee's employment with Company and for a period of one year immediately following termination of Employee's employment with Company, whether voluntary or involuntary, will Employee act in any way with the purpose or effect of (i) hiring any of the employees of Company, its divisions or subsidiaries or (ii) soliciting, recruiting or encouraging, directly or indirectly, any of Company's employees to leave the employ of Company, its divisions or its subsidiaries.

11.    Discoveries, Inventions, Trade Secrets, Trade Names, Copyrights, and Patents.    As part of the rights granted herein to Company, Employee agrees that all right, title and interest of any kind and nature whatsoever in and to any inventions, product, know-how, trade secrets, patents, trademarks, methods, procedures, copyrights, seminars, discoveries, improvements, ideas, creations, and other technical properties, whether or not patentable or subject to rights of copyright and/or trademark, which are conceived or made by Employee during the Term, and which are related to any of the business and/or activities of Company and any other lines of business which Company subsequently pursues in any form to include but not be limited to a strategic plan, research, feasibility studies, development, manufacturing, and customer contact (including but not limited to intellectual property, know-how, trade secrets, and patents in process or granted) or the performance by Employee of his services hereunder, shall be and become the sole and exclusive property of Company for all purposes. Employee shall promptly disclose to Company any such conception or other work product of the type as is generally described in the immediately preceding sentence. Employee agrees to execute any and all applications, assignments and other written instruments that Company may deem necessary and appropriate to confirm the title and interest of Company therein and thereto. The obligations of Employee under this Section 11 shall be binding upon his assignees, employers, other corporate or research affiliates, executors, administrators and heirs. The grant, transfer and assignment to Company by Employee of rights to intellectual properties shall remain effective for such periods of time as applicable law may permit with respect to the ownership of any such intellectual property or materials.

12.    Enforcement.    Employee understands and agrees that he will provide unique services to Company and that the restrictions contained in Sections 10 and 11 of this Agreement are reasonable, fair, and equitable in scope, terms, and duration, are necessary to protect the legitimate business interests, trade secrets, and good will of Company, and are a material inducement to Company to enter into this Agreement, and that any breach or threatened breach of the restrictions stated in Sections 10 and 11 would cause Company substantial and irreparable harm for which there is no adequate remedy at law. Therefore, Employee agrees and consents to the issuance of injunctive relief in favor of Company by any court of competent jurisdiction, where, in Company's sole discretion, Company has acted upon reasonable information concerning a breach or potential breach of this Agreement, to enjoin the breach of any of the covenants of Employee contained in Sections 10 and 11 of this Agreement. Nothing contained in this Section shall invalidate or waive any other rights or remedies which Company may have at law or in equity.

13.    Indemnification; Directors' and Officers' Insurance.

        (a)    While Employee is employed by Company pursuant to this Agreement, Company covenants that it will not repeal or modify any right to indemnification or limitation of liability

5

under Company's Amended and Restated Certificate of Incorporation, By-Laws, or otherwise so as to adversely affect any right or protection of a director or officer of Company existing at the time of such repeal or modification.

        (b)    Company agrees to provide to Employee and keep current at all times during Employee's employment, at its expense, director's and officer's liability insurance, with Employee named as the beneficiary, with such coverage limits as are determined in the reasonable discretion of the Board of Directors of the Company.

14.    Change in Control.    Notwithstanding any other provisions of this Agreement, Company agrees that in the event a Change of Control (as hereinafter defined) occurs and Employee leaves the employment of Company and the combined entity for whatever reason (other than (i) termination for Cause, (ii) death, (iii) permanent disability as described in Section 9 hereof or (iv) by Employee for any reason other than Good Reason):

        (a)  If the termination occurs within twelve months after a Change of Control, Company shall continue to pay Employee's Salary through the twelfth (12^th) full month following the effective date of termination. The six (6) month notice requirement prior to the effective date of termination pursuant to Sections 8(b) and 8(c) shall continue to be applicable following a Change in Control.

        (b)  To the extent eligible, Employee shall continue to be covered by all noncash benefit plans of Company, except for the retirement plans or retirement programs in which Employee participates or any successor plans or programs in effect on the date of a Change in Control, for 12 months thereafter; provided, however, that if during such time period Employee should enter into the employment of a competitor of Company, participation in such noncash benefit plans would cease. In the event Employee is ineligible under the terms of such plans to continue to be so covered, Company shall use its best efforts to provide substantially equivalent coverage through other sources. If Company is unable to provide substantially equivalent coverage through other sources, then Company shall pay in cash to Employee the amount Company would have had to expend to provide such coverage assuming standard risk.

        (c)  Employee's payments received hereunder shall be considered severance pay in consideration of past service, and pay in consideration of continued service from the date hereof and entitlement thereto shall not be governed by any duty to mitigate damages by seeking further employment nor offset by any compensation which may be received from future employment.

        (d)  The specific arrangements referred to above are not intended to exclude Employee's participation in other benefits available to executive personnel generally or to preclude other compensation or benefits as may be authorized by the Board of Directors of the Company from time to time, or as a result of the Change of Control.

        (e)  This Section shall be binding upon and shall inure to the benefit of the respective successors, assigns, legal representatives and heirs to the parties hereto.

        (f)    For the purpose of this Agreement, a "Change of Control" shall mean: a merger, consolidation, or reorganization of Company with one or more other entities in which Company is not the surviving entity, a sale of substantially all of the assets of Company to another entity, or any transaction (including, without limitation, a merger or reorganization in which Company is the surviving entity) that results in any person or entity (or persons or entities acting as a group or otherwise in concert) other than The Carlyle Group and/or its affiliates, becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of all classes of securities of Company or obtaining (through stock ownership, proxies, or otherwise) the right to elect a majority of the Board of Directors of the Company.

6

15.    Gross Up Payments.    If the payment provided under this Agreement (the "Contract Payment") is subject to the tax (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended ("Code"), Company shall pay Employee on or before the fifth day following the date of termination, an additional amount (the "Gross-Up Payment") such that the net amount retained by Employee, after deduction of any Excise Tax on the Contract Payment and such other Total Payments (as defined below) and any federal and state and local income tax and Excise Tax upon the payment provided for by this Section, shall be equal to the Contract Payment and such other Total Payments. For purposes of determining whether any of the payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) any other payments or benefits received or to be received by Employee in connection with a Change of Control of Company or Employee's termination of employment, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Company, its successors, any person whose actions result in a Change of Control of Company or any corporation affiliated (or which, as a result of the completion of a transaction causing a Change of Control, will become affiliated) with Company within the meaning of Section 1504 of the Code (together with the Contract Payment, the "Total Payments") shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by Company and acceptable to Employee, whose acceptance shall not be unreasonably withheld, the Total Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code either in their entirety or in excess of the base amount within the meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise Tax, (ii) the amount of the Total Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Total Payments or (B) the amount of excess parachute payments within the meaning of Section 280G(b)(1) (after applying clause (i), above), and (iii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Company's independent auditors in accordance with the principles of Sections 280G(b)(3) and (4) of the Code. For purposes of determining the amount of the Gross-Up Payment, Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Employee's residence on the date of termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time of termination of Employee's employment, Employee shall repay to Company at the time that the amount of such reduction in Excise Tax is finally determined the portion of the Gross-Up Payment attributable to such reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax and federal and state and local income tax imposed on the Gross-Up Payment being repaid by Employee if such repayment results in a reduction in Excise Tax and/or a federal state and local income tax deduction) plus interest on the amount of such repayment at the rate provided in Section 1274(d) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time of the termination of Employee's employment (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest payable with respect to such excess) at the time that the amount of such excess is finally determined.

16.    Survivability.    The provisions of Sections 10, 11 and 12 of this Agreement shall survive its termination.

17.    Section Titles.    The titles of the Sections of this Agreement are for convenience only and shall not affect the interpretation of any Section hereof.

7

18.    Waiver.    A waiver by either party hereto of any of the terms or conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach thereof. All remedies, rights, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either party hereto.

19.    Severability.    The rights and restrictions in this Agreement may be exercised and are applicable only to the extent that they do not violate applicable laws, and are intended to be limited to the extent necessary so that they will not render this Agreement illegal, invalid, or unenforceable. If any provision of this Agreement shall be deemed to be invalid or unenforceable, then that provision shall be modified to make it enforceable to the maximum extent possible, and the remaining provisions of this Agreement shall not be affected thereby and shall remain in full force and effect.

20.    Assignment.    This Agreement requires the personal services of Employee only, and Employee shall not be entitled to assign any portion of his duties or obligations hereunder.

21.    Notices.    For the purposes of this Agreement, notices, demands and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed as follows:

If to Employee:	William R. VanDyke 745 Zamia Court Boulder, Colorado 80304
If to Company:	Duratek, Inc. 10100 Old Columbia Road Columbia, Maryland 21046

22.    Governing Law.    This Agreement has been made and executed in the State of Maryland and shall be governed by the laws of Maryland applicable to contracts fully to be performed therein.

23.    Waiver of Jury Trial.    THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT. EACH OF THE PARTIES HERETO REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY THE COURT.

24.    Entire Agreement.    This Agreement constitutes the entire agreement of the parties and supersedes any and all previous agreements between the Parties. This Agreement may not be modified orally, but only by an agreement in writing supplied by the party against whom enforcement of any waiver, change, modification, extension, or discharge is sought.

25.    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall deemed to be an original but all of which together will constitute one and the same instrument.

8

26.    Miscellaneous.    The parties agree to execute all other such documents as may be required to effectuate or more readily carry out the provisions hereof.

        IN WITNESS WHEREOF, Employee and Company have executed this Agreement.

COMPANY:	EMPLOYEE:
DURATEK, INC.	William R. Van Dyke
By: /s/ Robert E. Prince	/s/ William R. Van Dyke
Title: President/CEO
Date: November 1, 2002

9

QuickLinks

Exhibit 10.18

EXECUTIVE EMPLOYMENT AGREEMENT
RECITALS
AGREEMENT

EX-10.19

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.19

2002 Duratek Executive Compensation Plan

PLAN PURPOSE
The 2002 Duratek Executive Compensation Plan is designed to attract, retain, and reward executive management and to align the financial interests of Duratek's executives with those of the Company's shareholders. Under this Plan, a meaningful portion of an executive officers' total compensation is "at risk" as individuals with greater influence on shareholder value.

PLAN YEAR
The plan year will be January 1—December 31.

PLAN ELIGIBILITY
The 2002 Duratek Executive Compensation plan includes the CEO, CFO, and Group Leaders, not covered by any other cash bonus or incentive compensation plan. In order to receive an Annual Cash Performance Award, an eligible employee must be employed at year-end of the Plan year. Any newly eligible executives that are hired or promoted during the Plan year will receive a prorated Annual Cash Performance Award. Should participants be absent for a portion of the Plan year due to Leave of Absence or Disability, those periods may be excluded and the award pro-rated.

PLAN DESIGN
The Annual Cash Performance Award participation levels are set as a percentage of the employee's base salary on the final day of the plan year. Awards are based on performance relative to the Company's Annual Business Plan as approved by the Board of Directors. If the Company consolidated performance is at plan, awards will be paid at the Participation Level Percentage. If the performance exceeds plan, the awards will increase. The maximum Awards payable to participants would be 200% of the Participation Level Percentage. All Annual Cash Performance Awards are subject to the approval of, and potential adjustment at the discretion of, the Compensation Committee.

Annual Cash Performance Awards will be based on the following Business Plan criteria:

Net Income	50% of award
Free Cash Flow	50% of award

If Net Income equals or exceeds 140% of the Business Plan target, the Net Income portion of the award will reach its maximum. If Free Cash Flow equals or exceeds 125% of the Business Plan Target, the Free Cash Flow portion of the award will reach its maximum. See Attached for Free Cash Flow statement.

Should either the Net Income or the Free Cash Flow measurement be below 90% of target, any bonus would be at the discretion of the Compensation Committee of the Board of Directors.

PLAN ADMINISTRATION
The Compensation Committee of the Board of Directors will administer the Plan. All Annual Cash Performance Awards are subject to the Committee's approval and adjustment based on the judgment of the Committee members.

Annual Cash Performance Awards will be approved by the Compensation Committee in March of each year based on the Company's performance versus the previous year's targets as reported in the final audited financial reporting package.

MINIMUM REQUIRED CRITERIA FOR AWARD
The Plan will be administered in accordance with the following provisions:

•

Duratek must meet the 2002 Bank Covenants for Annual Cash Performance Awards to be paid. In general, this equates to accomplishment of approximately 90% of its business plan budget. If these

Bank Covenants are not met, all incentive payments will be at the discretion of the Compensation Committee of Duratek's Board of Directors.

•

Should any significant safety, environmental or ethical compliance violation occur, payment of any incentive award to those that are responsible will be at the discretion of the Compensation Committee of Duratek's Board of Directors.

INCENTIVE AWARD PAYMENT
Annual Cash Performance Awards will be paid to participants no later than April 15th of the following Plan Year. Incentive awards will be paid through payroll and will be subject to all applicable taxes.

EMPLOYMENT TERMINATION
Participants who terminate employment during the Plan year will not participate in any part of the incentive for that year, unless the termination results from retirement, disability or death, or is pursuant to a specific agreement. If the termination results from retirement, disability or death, a pro-rata portion of the earned incentive will be paid at the same time that it is made to active employees. This pro-rata calculation will be based on the portion of the year that has elapsed at the date of termination.

UNUSUAL FINANCIAL EVENTS
Losses or gains on the sale of assets or other transactions that are deemed by the Compensation Committee to be outside the normal course of business may be excluded from the incentive calculations. Adjustments due to changes in accounting principles or practices may also be excluded.

CHANGE IN CONTROL PROVISION
If a change in control occurs and the employee receives notice of termination of their employment agreement during the Plan Year, the incentive payment will be calculated on a pro-rata basis for the period of the year that they were employed. The incentive will be calculated and paid at the same time as for other participants, but no later than April 15, 2003.

RIGHT TO MODIFY PLAN
Duratek reserves the right to amend or terminate this Plan at any time.

QuickLinks

Exhibit 10.19

2002 Duratek Executive Compensation Plan