V2x, Inc. · NYSE:VVX
V2x — Vectrus — Q3 2019 Earnings Presentation
18 slides from V2x's earnings presentation, Nov 5, 2019
Slide 1: Vectrus Third Quarter 2019 Results
VECTRUS THIRD QUARTER 2019 RESULTS CHUCK PROW PRESIDENT AND CHIEF EXECUTIVE OFFICER SUSAN LYNCH SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER NOVEMBER 5, 2019
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (THE "ACT"): CERTAIN MATERIAL PRESENTED HEREIN INCLUDES FORWARD-LOOKING STATEMENTS INTENDED TO QUALIFY FOR THE SAFE HARBOR FROM LIABILITY ESTABLISHED BY THE ACT. THESE FORWARD-LOOKING STATEMENTS IN
Slide 3: Q3'19 Highlights
Q3’19 HIGHLIGHTS • Continued momentum in revenue growth; +17% year-over-year to $360 million – Organic growth(1) +13% Y/Y – Navy revenue +56% Y/Y and Air Force revenue +35% Y/Y • GAAP diluted EPS of $0.80; adjusted EPS1 of $0.84 (+14% seq’l) – Adjusted EBITDA margin(1) of 4.6% (+40 bps seq’l) – High
Slide 4: Q3'19 Results
Q3’19 RESULTS Revenue ($M) Op. Income, Adj. EBITDA1($M) $16.7 $359.9 $308.1 $14.9 $14.4 $14.0 Revenue Operating Income Adjusted EBITDA Q3'18 Q3'19 Q3'18 Q3'19 Margins1 EPS1, 2 $0.86 $0.86 $0.84 4.5% 4.8% 4.6% $0.80 4.0% Operating Margin Adj. EBITDA Mgn Diluted EPS Adj. Diluted EPS Q3'18 Q3'19 Q3'18
Slide 5: Cash and Leverage
CASH AND LEVERAGE* Q3 2019 Q3 2018 vs. 2018 % VAR Year-to-date net cash provided by operating activities $28.4 $8.7 $19.7 226% Cash $41.1 $39.6 $1.5 4% Receivables $254.8 $223.4 $31.4 14% Debt $73.0 $76.0 $(3.0) (4)% Net debt 1 $31.9 $36.4 $(4.5) (12)% Leverage ratio 1.04x 1.29x .25x 19% *In million
Slide 6: Total Backlog
TOTAL BACKLOG1, 2 $5.0 $4.0 $1.4 $3.0 $2.3 $2.0 $2.2 $2.3 $2.3 $2.2 $2.2 $ IN $ IN BILLIONS $1.0 $0.8 $0.7 $1.1 $0.9 $0.8 $0.8 $0.0 3Q18 4Q18 1Q19 2Q19 3Q19 Pro forma backlog including LOGCAP V Funded Unfunded LOGCAP V value • Total backlog $3,045 million as of September 27, 2019 - Funded backlog $8
Slide 7: 2019 Guidance
2019 GUIDANCE Var to 2019 $ millions, except for EBITDA margins and per share amounts 2019 Guidance 2019 Mid 2018 Mid %Var Revenue $ 1,370 to $ 1,390 $ 1,380 $ 1,279 $ 101 7.9 % Adjusted EBITDA 1 $ 58.8 to $ 62.2 $ 60.6 $ 53.6 $ 7.0 13.1 % EBITDA Margin 1 4.0 % to 4.2 % 4.1 % 4.1 % 0 bps Adjusted EB
Slide 8: Organic Growth to Date
ORGANIC GROWTH TO DATE Prime Contract Wins, Recompetes, Extensions Contract Name Type Duration Value Dates LOGCAP V (10-year IDIQ contract duration) (1) Cost-Plus 5.0 yrs $1,383M Under Protest K-BOSSS Extension Cost-Plus 1.0 yrs $548M Mar 2019 – Mar 2020 Fleet Systems Engineering Team (FSET) Cost-Pl
Slide 9: Robust Pipeline
ROBUST PIPELINE $10,000 $9,000 $1,400 $2,200 $8,000 $1,000 $7,000 $1,500 $ IN IN MILLIONS $ $1,000 $6,000 $7,700 $7,000 $7,100 $5,000 $6,000 $6,000 $4,000 12/31/2015 12/31/2016 12/31/2017 12/31/2018 9/27/2019 Bids Plan to Submit Bids Submitted Page 9
Slide 10: LOGCAP V – Ready for Phase-In
LOGCAP V – READY FOR PHASE-IN CENTCOM INDOPACOM • Strengthens Middle East incumbency • Provides 10-year platform for growth • Retains work associated with K-BOSSS and client intimacy • Expands Iraq footprint • Expands geographical footprint • Vectrus teams continue to prepare for the notice to proce
Slide 11: Driving to 5-Year Margin Goal
DRIVING TO 5-YEAR MARGIN GOAL Volume and Contract Mix Enterprise Vectrus Solutions and Client Mix Progress Q3’19 2% 4% Revenue Adjusted EBITDA Margin (1) 4% 14% 24% 24% 2016 Q3’19 68% 76% $1.19 $1.38B $2.5B 3.8% 4.4% 7% 84% B 2019 Mid- point 2019 Mid- point guidance Firm-Fixed-Price Cost-Plus Army A
Slide 12: Near-Term Priorities and Execution
NEAR-TERM PRIORITIES AND EXECUTION Vectrus Strategy Strategic Execution GROWTH – BUILD ON MOMENTUM • Retain re-compete programs • Diversify portfolio and solutions Enhance Expand • Advance international sales campaign Foundation Portfolio • Leverage new LOGCAP V geographic position • Enhance M&A foc
Slide 13: Appendix
f APPENDIX
Slide 14: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES The primary financial performance measures we use to manage our business and monitor results of operations are revenue trends and operating income trends. In addition, we consider adjusted operating income, adjusted operating margin, adjusted net income, adjusted
Slide 15: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Page 15
Slide 16: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Page 16
Slide 17: Reconciliation of Non-GAAP Measures (Cont.)
RECONCILIATION OF NON-GAAP MEASURES (CONT.) Page 17
Slide 18: Reconciliation of Non-GAAP Measures (Cont.)
RECONCILIATION OF NON-GAAP MEASURES (CONT.) Page 18