V2x, Inc. · NYSE:VVX
V2x — Vectrus — Q4 2019 Earnings Presentation
20 slides from V2x's earnings presentation, Mar 3, 2020
Slide 1: Fourth Quarter 2019 Results and 2020 Guidance
VECTRUS FOURTH QUARTER 2019 RESULTS AND 2020 GUIDANCE CHUCK PROW PRESIDENT AND CHIEF EXECUTIVE OFFICER SUSAN LYNCH SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER March 3, 2020
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: 2019: Strong Year of Strategic and Financial Momentum
2019: STRONG YEAR OF STRATEGIC AND FINANCIAL MOMENTUM • Revenue grew 11% in Q4 for full year 2019 growth of 8% – Navy revenue +45%, Air Force revenue +22%, added Dept. of State and Japan’s MoD as new clients – Won approx. $1.2B2 of new business in 2019 – 2019 FY operating income of $51.6M and margin
Slide 4: Q4'19 Results
Q4’19 RESULTS 1 Revenue ($M) Adj. Op. Income, Adj. EBITDA1($M) $18.0 $16.0 $365.3 $352.8 $13.9 $329.6 $329.6 $12.6 Revenue Organic Revenue Adj. Operating Income Adjusted EBITDA Q4'18 Q4'19 Q4'18 Q4'19 1 Margins EPS1 $0.93 4.9% $0.89 $0.91 4.4% 4.2% 3.8% $0.73 Adj. Operating Mgn Adj. EBITDA Mgn Dilut
Slide 5: 2019 Results
2019 RESULTS Revenue1 ($M) Adj. Op. Income1, Adj. EBITDA1($M) $1,383 $1,360 $61.4 $1,279 $1,279 $54.9 $53.6 $49.8 Revenue Organic Revenue Adj. Operating Income Adjusted EBITDA 2018 2019 2018 2019 1 Margins EPS1 4.2% 4.4% 3.9% 4.0% $3.10 $2.99 $3.04 $3.21 Adj. Operating Mgn Adj. EBITDA Mgn Diluted EP
Slide 6: Cash and Leverage
CASH AND LEVERAGE* Q4 2019 Q4 2018 vs. 2018 % VAR Year-to-date net cash provided by operating activities$ 27.6 $ 40.1 $ (12.5) (31)% Cash$ 35.3 $ 66.1 $ (30.8) (47)% Receivables$ 269.2 $ 232.1 $ 37.1 16 % Debt1 $ 70.5 $ 75.0 $ (4.5) (6)% Net Debt $ 35.2 $ 8.9 $ 26.3 297 % Leverage Ratio 0.97x 1.25x
Slide 7: Total Backlog
TOTAL BACKLOG1 $5.0 $4.0 $1.8 $3.0 $2.3 $2.0 $2.3 $2.3 $2.2 $2.0 $2.0 $ IN BILLIONS $1.0 $0.7 $1.1 $0.9 $0.8 $0.7 $0.7 $0.0 4Q18 1Q19 2Q19 3Q19 4Q19 Pro forma backlog Funded Unfunded Pro forma backlog • Total backlog $2,751 million as of December 31, 2019 - Funded backlog $707 million - Unfunded bac
Slide 8: 2020 Guidance
2020 GUIDANCE 2019 Var $ millions, except for EBITDA margins and per share amounts 2020 Guidance 2020 Mid 2019 to Mid %Var Revenue $ 1,475 to $ 1,525 $ 1,500 $ 1,383 $ 117 8.5 % EBITDA Margin 4.6 % to 4.8 % 4.7 % 4.2 % 50bps Adjusted EBITDA Margin 1 4.6 % to 4.8 % 4.7 % 4.4 % 30bps Diluted Earnings
Slide 9: 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 • Army intends to proceed with the previously awarded LOGCA
Slide 10: Organic Growth 2019 to Date
ORGANIC GROWTH 2019 TO DATE Prime Contract Wins, Recompetes, Extensions Contract Name Type Duration Value Dates TOTAL Awards of ~$2.5 Billion 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 Syst
Slide 11: Robust New Business Pipeline
ROBUST NEW BUSINESS PIPELINE $13,000 $12,000 $11,000 1 $2,500 $10,000 $9,000 $1,400 $8,000 $ IN MILLIONS $1,000 $7,000 $1,500 $1,000 $9,200 $6,000 $7,700 $7,000 $5,000 $6,000 $6,000 $4,000 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 Bids Plan to Submit Bids Submitted (1) Only new LOGCAP V
Slide 12: Accelerating Growth Through Strategic Execution
ACCELERATING GROWTH THROUGH STRATEGIC EXECUTION Vectrus Strategy Strategic Execution Progress Toward 5-Year Objectives • Significantly enhanced portfolio of clients and mix • Successfully integrated two acquisitions • Improved operating technology capability Enhance Expand Foundation Portfolio • Ref
Slide 13: Driving to 5-Year Goals
DRIVING TO 5-YEAR GOALS Volume and Contract Mix Enterprise Vectrus Solutions and Client Mix Progress Revenue Adjusted EBITDA Margin (1) 2% 4% 4% 24% 14% 23% 2019 2019 2016 76% 69% $1.19 $1.5B $2.5B 3.8% 4.7% 7% 84% B 2020 Mid- point 2020 Mid- point guidance Firm‐Fixed‐Price Cost‐Plus guidance Army A
Slide 14: Appendix
APPENDIX \VECTRUS
Slide 15: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Key Performance Indicators and 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. Management believes that these financial performance measure
Slide 16: Reconciliation of Non-GAAP Measures: Adjusted Net Income, Q4 2019
RECONCILIATION OF NON-GAAP MEASURES Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures) Three Months Ended LOGCAP V Pre- Three Months Ended December 31, 2019 As Non-recurring return Operational Legal December 31, 2019 As (In thousands, except per share data) Reported to prov
Slide 17: Reconciliation of Non-GAAP Measures: Adjusted Net Income, Q4 2018
RECONCILIATION OF NON-GAAP MEASURES Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures) Three Months Ended LOGCAP V Pre- Three Months Ended December 31, 2018 As Non-recurring return Operational Legal December 31, 2018 As (In thousands, except per share data) Reported to prov
Slide 18: Reconciliation of Non-GAAP Measures: Adjusted Net Income, FY 2019
RECONCILIATION OF NON-GAAP MEASURES Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures) LOGCAP V Pre- Year Ended December Year Ended December Non-recurring return Operational Legal 31, 2019 As Reported - (In thousands, except per share data) 31, 2019 As Reported to provision
Slide 19: Reconciliation of Non-GAAP Measures: Adjusted Net Income, FY 2018
RECONCILIATION OF NON-GAAP MEASURES Adjusted Net Income, Adjusted Diluted Earnings Per Share (Non-GAAP Measures) LOGCAP V Pre- Year Ended December Year Ended December Non-recurring return Operational Legal 31, 2018 As Reported - (In thousands, except per share data) 31, 2018 As Reported to provision
Slide 20: Reconciliation of Non-GAAP Measures: Organic Revenue
RECONCILIATION OF NON-GAAP MEASURES Organic Revenue (Non-GAAP Measure) Three Months Three Months Ended Ended December September 27, 2019 31, 2019 As As Reported - (In thousands) Reported Advantor Organic Revenue$ 365,271 $ 12,433 $ 352,838 Three Months Three Months Ended Ended December September 28,