BWX Technologies(BWXT) - 2025 Q1 - Quarterly Report

Financial Performance - Consolidated revenues increased by 13.0%, or $78.3 million, to $682.3 million for the three months ended March 31, 2025, compared to $604.0 million for the same period in 2024[95] - Government Operations segment revenues rose by 14.0%, or $68.2 million, to $555.3 million, driven by long-lead material procurements and the acquisition of Aerojet Ordnance Tennessee, Inc. (A.O.T.)[98] - Operating income for the Government Operations segment increased by $12.1 million to $97.7 million, maintaining a margin of 17.6%[99] - Commercial Operations segment revenues increased by 9.6%, or $11.3 million, to $128.3 million, primarily due to higher revenues in nuclear components manufacturing[101] - Operating income for the Commercial Operations segment decreased by $2.1 million to $6.5 million, with a margin of 5.0%[102] - For the three months ended March 31, 2025, income before provision for income taxes was $91,817 thousand, an increase of $3,440 thousand or 3.9% compared to $88,377 thousand for the same period in 2024[104] Taxation - The provision for income taxes decreased to $16,291 thousand in Q1 2025 from $19,843 thousand in Q1 2024, reflecting a reduction of $3,552 thousand or 17.9%[104] - The effective tax rate for Q1 2025 was 17.7%, down from 22.5% in Q1 2024, primarily due to excess tax benefits associated with equity compensation[105] Backlog and Revenue Recognition - As of March 31, 2025, total backlog was $4,878.7 million, slightly up from $4,843 million at the end of 2024, with $396.3 million of unfunded backlog related to U.S. Government contracts[110] - Approximately 61% of the revenue associated with the backlog is expected to be recognized by the end of 2026[110] Cash Flow and Capital Structure - Cash and cash equivalents totaled $70,465 thousand as of March 31, 2025, down from $91,180 thousand at December 31, 2024[133] - Working capital increased by $36.0 million to $491.8 million at March 31, 2025, primarily due to net changes in contracts in progress and advance billings[133] - Net cash provided by operating activities increased by $17.6 million to $50.7 million for the three months ended March 31, 2025, compared to $33.0 million for the same period in 2024[134] - Net cash used in investing activities increased by $126.0 million to $156.4 million for the three months ended March 31, 2025, primarily due to a $103.3 million acquisition of A.O.T.[135] - Net cash provided by financing activities increased by $116.9 million to $84.8 million for the three months ended March 31, 2025, driven by an increase in net borrowings of long-term debt of $123.4 million[136] Debt and Borrowings - As of March 31, 2025, borrowings under the Term Loan totaled $234.4 million, with total borrowings and letters of credit under the Revolving Credit Facility amounting to $170.0 million and $1.4 million, respectively[118] - The weighted-average interest rate on outstanding borrowings under the Credit Facility was 5.67% as of March 31, 2025[118] Acquisitions and Strategic Initiatives - The acquisition of A.O.T. on January 3, 2025, is expected to enhance capabilities in developing advanced materials for commercial, military, and space applications[86] - Kinectrics Holdings Inc. acquisition is targeted to close in mid-2025, expanding lifecycle management services for the nuclear power market[87] - The company entered into an agreement to acquire Kinectrics for approximately CAD 782.7 million, expected to close in mid-2025[139] Corporate Expenses and Financial Health - Unallocated corporate expenses increased by $6.3 million, attributed to higher healthcare costs and legal and consulting expenses related to merger and acquisition activities[103] - The company believes it has sufficient cash and borrowing capacity to meet cash requirements for the next 12 months and beyond[140] - The company had underfunded defined benefit pension and postretirement benefit plans with obligations totaling approximately $99.0 million as of March 31, 2025[132] Market Risk - Market risk exposures have not changed materially from those disclosed in the 2024 10-K[141]