Bowman(BWMN) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) The unaudited condensed consolidated financial statements present the company's financial position, results of operations, and cash flows, highlighting significant revenue growth and a shift from net loss to net income Condensed Consolidated Balance Sheets Total assets increased to $538.2 million from $505.9 million, and total liabilities rose to $288.6 million from $259.8 million, with shareholders' equity also slightly increasing Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $196,725 | $176,621 | | Goodwill | $135,929 | $134,653 | | Total Assets | $538,245 | $505,881 | | Revolving credit facility | $59,516 | $37,000 | | Total Liabilities | $288,602 | $259,766 | | Total Shareholders' Equity | $249,643 | $246,115 | Condensed Consolidated Statements of Operations The company achieved significant year-over-year improvement, shifting from a net loss to a net income for both the three and six-month periods ended June 30, 2025, with strong revenue growth Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross Contract Revenue | $122,090 | $104,501 | $235,021 | $199,409 | | Income (loss) from operations | $9,044 | $(1,235) | $10,180 | $(3,845) | | Net income (loss) | $6,009 | $(2,082) | $4,265 | $(3,640) | | Diluted EPS | $0.34 | $(0.13) | $0.24 | $(0.24) | Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly increased to $16.3 million for the six months ended June 30, 2025, while cash used in investing activities decreased, and financing activities shifted to a net use of cash Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Activity | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,293 | $5,588 | | Net cash used in investing activities | $(1,837) | $(20,582) | | Net cash (used in) provided by financing activities | $(5,614) | $17,450 | | Net increase in cash | $8,842 | $2,456 | Notes to Condensed Consolidated Financial Statements The notes provide detailed disclosures on accounting policies, recent acquisitions, revenue recognition, debt facilities, share repurchase programs, and a significant uncertain tax position related to R&D costs - The company has established a $60.4 million uncertain tax position related to the capitalization and amortization of research and development (R&D) costs as of June 30, 2025, following the TCJA Section 174 requirement[62] - During H1 2025, the company completed two acquisitions for $3.6 million. In 2024, it completed the significant acquisition of Surdex Corporation for $43.3 million and seven other acquisitions for $36.2 million[79][81][87] - As of June 30, 2025, the company had $317.7 million in remaining performance obligations, with 88.2% expected to be recognized as revenue within the next twelve months[93] - In March 2025, the company increased its Revolving Credit Facility from $100.0 million to $140.0 million. The outstanding balance was $59.5 million as of June 30, 2025[105][107] - On June 6, 2025, the board authorized a new $25 million share repurchase program, replacing the previous one. No repurchases were made under the new program as of June 30, 2025[76][78] - Subsequent to the quarter end, the company completed another acquisition for a total consideration of $2.7 million, plus potential contingent consideration of up to $2.8 million[150] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses significant revenue and profitability growth for Q2 and H1 2025, driven by organic expansion and acquisitions across all core markets, alongside strong non-GAAP metrics, increased backlog, and robust liquidity Results of Operations - Three Months Ended June 30, 2025 vs. 2024 Gross contract revenue for Q2 2025 increased 16.8% to $122.1 million, driven by growth across all markets, resulting in a shift from net loss to $6.0 million net income and a 50.6% increase in Adjusted EBITDA Q2 2025 vs Q2 2024 Key Metrics (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Gross Contract Revenue | $122,090 | $104,501 | 16.8% | | Net Income (Loss) | $6,009 | $(2,082) | N/A | | Adjusted EBITDA (Non-GAAP) | $20,203 | $13,412 | 50.6% | | Net Service Billing (Non-GAAP) | $107,997 | $93,981 | 14.9% | Q2 2025 Gross Contract Revenue by Market (in thousands) | Market | Q2 2025 (in thousands) | Q2 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Building Infrastructure | $56,561 | $52,442 | 7.9% | | Transportation | $24,611 | $19,233 | 28.0% | | Power & Utilities | $26,843 | $22,917 | 17.1% | | Natural Resources & Imaging | $14,075 | $9,909 | 42.0% | Results of Operations - Six Months Ended June 30, 2025 vs. 2024 Gross contract revenue for H1 2025 grew 17.9% to $235.0 million, with significant market-specific growth, leading to a net income of $4.3 million and a 35.9% increase in Adjusted EBITDA H1 2025 vs H1 2024 Key Metrics (in thousands) | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Gross Contract Revenue | $235,021 | $199,409 | 17.9% | | Net Income (Loss) | $4,265 | $(3,640) | N/A | | Adjusted EBITDA (Non-GAAP) | $34,708 | $25,541 | 35.9% | | Net Service Billing (Non-GAAP) | $208,050 | $179,671 | 15.8% | H1 2025 Gross Contract Revenue by Market (in thousands) | Market | H1 2025 (in thousands) | H1 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Building Infrastructure | $108,593 | $101,844 | 6.6% | | Transportation | $48,340 | $37,361 | 29.4% | | Power & Utilities | $52,153 | $44,768 | 16.5% | | Natural Resources & Imaging | $25,935 | $15,436 | 68.0% | Backlog The company's backlog increased 9.8% to $438.2 million by June 30, 2025, demonstrating diversification across key markets, primarily Building Infrastructure and Transportation Backlog Composition | Market | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Building Infrastructure | 40% | 41% | | Transportation | 31% | 35% | | Power & Utilities | 21% | 15% | | Natural Resources & Imaging | 8% | 9% | Liquidity and Capital Resources The company maintains strong liquidity, primarily from cash operations and a $140.0 million revolving credit facility, supporting ongoing operations and strategic acquisitions - Principal sources of liquidity are cash from operations and a $140.0 million Revolving Credit Facility[227] - Cash and cash equivalents increased by $8.8 million during the first six months of 2025[227] - The company is actively pursuing acquisitions and expects to use a meaningful portion of its liquidity and capital resources for this purpose[229] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate changes on its $59.5 million revolving credit facility, with a 1% rate change impacting annual interest expense by approximately $0.3 million - The company's main market risk is interest rate changes on its revolving credit facility, with $59.5 million outstanding as of June 30, 2025[246] - A 1% change in the interest rate on the credit facility would change annual interest expense by approximately $0.3 million[246] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of the end of the period, the company's disclosure controls and procedures were effective at the reasonable assurance level[250] - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[251] PART II. OTHER INFORMATION Legal Proceedings The company is not currently involved in any legal proceedings expected to have a material adverse effect on its financial results or position - As of the report date, the company is not involved in any legal proceedings that would have a material adverse effect on its operations or financial condition[254] Risk Factors No material changes to the company's previously disclosed risk factors were reported compared to the latest Annual Report on Form 10-K - No material changes to risk factors were reported compared to the latest Annual Report on Form 10-K[255] Unregistered Sales of Equity Securities and Use of Proceeds The company terminated its 2024 share repurchase program and authorized a new $25 million program on June 6, 2025, with no repurchases made under the new program as of June 30, 2025 - On June 6, 2025, the board authorized a new $25 million share repurchase program, which will run for 12 months[259] - The previous 2024 Repurchase Authorization was terminated. As of June 30, 2025, no repurchases have been made under the new 2025 program[258][259] Other Information Several key executives and a director adopted Rule 10b5-1 trading plans during Q2 2025 for the potential sale of company common stock - In June 2025, CEO Gary Bowman, CFO Bruce Labovitz, COO Daniel Swayze, and Director Stephen Riddick each adopted a Rule 10b5-1 trading plan for the potential sale of company stock[261] Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and XBRL data files