Slide 1: 1st Quarter 2022 Results
VECTRUS 1st Quarter 2022 Results Chuck Prow – President and Chief Executive Officer Susan Lynch – Senior Vice President and Chief Financial Officer May 10, 2022
Slide 2: Disclaimers
Disclaimers FORWARD-LOOKING STATEMENTS Certain material presented in this presentation includes forward-looking statements intended to qualify for the safe harbor from liability established by the Securities Exchange Act of 1934, as amended. These forward- looking statements include, but are not lim
Slide 3: Call Participants
Call Participants Chuck Prow Susan Lynch President and Senior Vice President and Chief Executive Officer Chief Financial Officer vectrus.com vectrus.com TRUE TRUE TO YOURTO MISSION / YOUR MISSION / 3
Slide 4: Vectrus Q1 2022 Highlights
Vectrus Q1 2022 Highlights • Revenue of $456M (+5.2% y/y, +8.8% seq) • Continued strong momentum working with the Navy • Q1 Operating Results: — Awarded $60 million Spectrum Management — Operating income of $5.2 million includes ~$9 recompete million of merger and integration related — Successfully
Slide 5: Significant Accomplishments
Significant Accomplishments As one of the first sites funded to test this technology for the U.S. 5G Smart Warehouse Down Select military, we will help map 5G development and Vectrus was selected by the DoD to complete the final phases of application development for a 5G DoD strategies moving Smar
Slide 6: Notable Contract Wins to Date
Notable Contract Wins to Date Spectrum Management WOLF RAPID MAC Electromagnetic Classified Programs $60M IDIQ $5M $27M Awarded the next generation Awarded a position on the Navy Multiple wins providing IT and follow-on contract with the Naval Webster Out Lying Field (WOLF) Awarded a subcontract per
Slide 7: Q1'22 Financial Results
Q1’22 Financial Results Operating Margin & Revenue ($M) Diluted EPS Adj. Diluted EPS1 Adj. EBITDA Margin1 $456.5 4.8% 4.0% $1.20 $434.0 3.8% $1.02 $1.01 1.1% $0.24 Q1'21 Q1'22 Q1'21 Q1'22 Q1'21 Q1'22 Q1'21 Q1'22 1 See appendix for reconciliation of non-GAAP measures. . vectrus.com vectrus.com TRUE T
Slide 8: Cash Flow and Liquidity
Cash Flow and Liquidity ($M) Q1 2021 Q1 2022 YTD Net Cash Provided by (Used in) Operating Activities ($21.7) ($26.4) • YTD Net Cash Used in Cash 1 $38.3 $23.0 Operations of $26.4 million; current quarter included: • ~$8.0 million CARES Receivables $359.2 $377.6 Act repayment and • ~$2.0 million merg
Slide 9: Backlog and Book-to-Bill
Backlog and Book-to-Bill Backlog1 ($B) Trailing 12-Month Book-to-Bill Ratio 1.3 x $4.9 $5.0 $4.9 $4.5 1.2 x $4.5 1.0 x 1.0 x 0.8 x $ 3.6 $ 3.7 $ 4.0 $ 3.6 $ 3.7 $ 1.3 $ 1.2 $ 1.0 $ 0.9 $ 0.8 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Unfunded Funded Total Q1’21 Backlog of $4.5 Billi
Slide 10: 2022 Guidance
2022 Guidance 2022 ($M, except per share data) 2022 Mid-Point Guidance Revenue $1,820 - $1,860 $1,840 Adjusted EBITDA Margin1 (%) 4.5% - 4.7% 4.6% Adjusted Diluted Earnings Per Share1 $4.57 - $4.93 $4.74 Net Cash Provided by Operating Activities Excluding M&A Costs1 $50.0 - $53.5 $51.75 2022 guidanc
Slide 11: Merger Update
Merger Update
Slide 12: Creating a Global Leader in Mission-Essential Solutions
Creating a Global Leader in Mission-Essential Solutions 2022E Pro Forma Benefits of the Strategic Combination Talented Global Workforce with Strong Cultural Fit Through ~$3.6B >$12B Shared Mission Provides Greater Scale and Market Leadership in the Converged Environment Revenue Backlog1 Improv
Slide 13: Storied Histories and Shared Vision
Storied Histories and Shared Vision Decades of History and Service Client-Focused Culture Built on Shared Mission 1975 Founded by Beech Aerospace Services 2003 Integrity Acquired by L3 Commitment to upholding the highest ethical 2018 standards Acquired by AIP in carveout from L3 2021 Responsibility
Slide 14: Vertex's Capability-Rich Portfolio is Highly Strategic to Vectrus
Vertex’s Capability-Rich Portfolio is Highly Strategic to Vectrus Key Metrics FY 2022E1 Engineering and Logistics Solutions Revenue ~$1.8B Design, development and delivery of technical services and logistics analysis and support % 2022E YoY Growth >10% Aerospace & Defense Services Adjusted EBITDA $1
Slide 15: Combination Creates Truly Unique and Comprehensive Set of Capabilities
Combination Creates Truly Unique and Comprehensive Set of Capabilities Capabilities: Supply Chain Management Operations & Logistics Base Operations Security Sustainment Defense Maintenance Services Training Aerospace Integration & Sustainment MRO Defense Training
Slide 16: Better Positioned and More Diversified Business
Better Positioned and More Diversified Business Army Army Other Other 64% Other 12% 18% 9% 30% Army Client Air Air Force 41% Mix Force Navy 19% 12% 30% Navy Air Force Navy 15% 28% 22% Contract ~$5.0B ~$15B ~2.8x ~$7.2B ~$20B ~4.0x $12B+ $60B+ ~3.4x Summary Backlog1 Pipeline Backlog / 2022E Backlog1,
Slide 17: Supported by Long-Term Contracts
Supported by Long-Term Contracts Today Multiple Opportunities Extend Beyond 2027 T-45 Aircraft Maintenance and Logistics Support Navy Test Wing Atlantic (under protest) AV-8B Harrier II Contractor Logistics Support Isa Air Base, Bahrain NSF Romania BOS AHTS Contractor Logistics Support E6-B Maintena
Slide 18: Pro Forma Financial Profile
Pro Forma Financial Profile 2022E Figures1 Revenue Adjusted EBITDA 2022E Vectrus Illustrative Guidance2 Pro Forma1 ~$3.6B Revenue $ 1.8bn $ 3.6bn ~$290M3 YoY Growth 3% 6% ~$1.8B Adj. EBITDA 4.6 % >8 %3 Margin ~$81M CapEx $ 10mm $ 20mm Tax Rate 19 % 23 % Excluding Tax Asset Category 1 Category 2 Cate
Slide 19: Highly Attractive Financial Opportunity
Highly Attractive Financial Opportunity Pro Forma Revenue Pro Forma Adjusted EBITDA Potential for Annual Revenue Long-Term Margin Growth of ~10% Potential of >9% ~$290M¹ ~$3.6B 2022 2026 2022 2026 Significant Shareholder Value Creation Opportunity vectrus.com vectrus.com TRUE TRUE TO YOURTO MISSION
Slide 20: Illustrative Pro Forma Cash Flow
Illustrative Pro Forma Cash Flow $ 290 $(72) $(28) $(20) $ 161 +$15 $(25) Pro Forma Interest Expense Cash Taxes CapEx Illustrative Net Illustrative Illustrative 1 Adj. EBITDA Working Capital Stock Based Pro Forma 2022E Compensation Free Cash Flow vectrus.com vectrus.com TRUE TRUE TO YOURTO / YOUR MI
Slide 21: Clear Path to Deleveraging
Clear Path to Deleveraging Net Leverage Benchmarking Pro forma leverage profile 3.8x broadly in line with sector 3.2x ~3.0x ~2.0-3.0x Strong cash flow generation Low CapEx business model Select Public Pro Forma at Pro Forma 2023 Long-Term Target Government Close Target >$12 billion of pro forma Serv
Slide 22: Creating Value for All Stakeholders
Creating Value for All Stakeholders • Significantly improved margins and larger backlog Shareholders • Expected to be accretive to EPS and Free Cash Flow per share in year one post-close • Committed to debt reduction to preserve strategic and financial flexibility • Positioned to deliver more integr
Slide 23: Merger Update and Timeline
Merger Update and Timeline March 21 April 27 May 9 Q3 2022 Hart-Scott-Rodino Preliminary Definitive Expected to (HSR) Antitrust filing Proxy filed Proxy filed Close March 7 April 21 June 15 Ongoing Transaction 30-day waiting period Special Meeting Integration announced on HSR ended planning underway
Slide 24: Appendix
Appendix vECTRUS Jrortex
Slide 25: Transaction Summary
Transaction Summary • Vectrus to issue stock to Vertex shareholders in an all-stock merger • Vectrus shareholders will own ~38% and Vertex shareholders will own ~62% of the Transaction combined company Structure • Transaction values Vertex at ~$2.1 billion or ~9.5x 2021 EV/EBITDA (~9.0x 2022E), net
Slide 26: Compelling Valuation Relative to Peers
Compelling Valuation Relative to Peers Attractive Financial Profile… … At A Significant Valuation Discount to Peers 2022E EV / EBITDA ‘21A – ‘22E Revenue Median: 13.3x >6% 14.9 x Growth (%) 14.1 x 14.1 x 4% 13.5 x4 13.0 x 12.7 x 11.5 x 10.7 x + Peer Median1 Pro Forma 7.1 x3 10% ‘22E EBITDA Margin (%
Slide 27: Complementary Capabilities and Scale Should Drive Enhanced Organic Growth
Complementary Capabilities and Scale Should Drive Enhanced Organic Growth Substantial Revenue Synergy Opportunities Total Potential Pipeline of $60B+ Through 2026 Across Four Core Markets Operations and Logistics ~$20B Aerospace ~$15B Training Additional Potential Technology Pipeline Additional Near
Slide 28: Combination Unlocks New Program Pursuits
Combination Unlocks New Program Pursuits Key Capabilities Applicable Services Powered by Combination Estimated Annual Value NASA: Facilities, Full Life Cycle Logistics, • Facilities Support • Integrated Security Engineering, Training, Testing, IT, and Range Support >$500M • Engineering & Digital • I
Slide 29: Clearly Identified Cost Synergies
Clearly Identified Cost Synergies Achievable Synergies from Vertex Combination Corporate Costs $20M Expected to achieve run-rate synergies by year end 2024 Net Cost Synergies One-time costs of ~$20 million expected to be incurred over three years Supply Chain & Contract Efficiencies Additional S
Slide 30: Attractive Tax Attributes Drive Significant Cash Tax Savings
Attractive Tax Attributes Drive Significant Cash Tax Savings Cash Tax Savings ($mm) Tax Asset Overview Years 1 - 12 13 - 15 Vertex has ~$1.1 billion of tax attributes from previously completed transactions Annual Pre-Tax Transaction $ 78 $ 53 Amortization Net Present Value of tax attributes is ~
Slide 31: Strong Commitment to Our Community
Strong Commitment to Our Community DE&I Commitments Maintaining a work environment where diversity, equity and inclusion are central to our culture Recognizing Employee Resource Groups as crucial to inclusion and being both the employer of choice for workforce and provider of choice for clients Enga
Slide 32: Reconciliation Of Non-GAAP Measures
Reconciliation Of Non-GAAP Measures
Slide 33: Reconciliation Of Non-GAAP Measures
Reconciliation Of Non-GAAP Measures This presentation includes certain non-GAAP financial measures, including EBITDA and Pro forma Adjusted EBITDA. These financial measures are not prepared in accordance with accounting principles generally accepted in the United States and may be different from non
Slide 34: Non-GAAP Definitions
Non-GAAP Definitions Adjusted EBITDA related to Vectrus refers to earnings before interest, taxes, depreciation and amortization, as adjusted for one-time non-recurring items (as applicable). Adjusted EBITDA related to Vertex refers to earnings before interest, taxes, depreciation and amortizati
Slide 35: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures) LOGCAP V Amortization of Three Months Ended Three Months Ended M&A, Integration, and Pre-Operational Acquired Intangible April 1, 2022 ($K, except per share data) April 1, 2022 Related Co
Slide 36: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures) LOGCAP V Amortization of Three Months Ended Three Months Ended M&A, Integration, and Pre-Operational Acquired Intangible April 2, 2021 ($K, except per share data) April 2, 2021 Related Co