V2x, Inc. · NYSE:VVX
V2x — Vectrus — Q4 2018 Earnings Presentation
17 slides from V2x's earnings presentation, Feb 26, 2019
Slide 1: Vectrus Fourth Quarter 2018 Results and Issuance of 2019 Guidance
VECTRUS FOURTH QUARTER 2018 RESULTS AND ISSUANCE OF 2019 GUIDANCE CHUCK PROW PRESIDENT AND CHIEF EXECUTIVE OFFICER MATT KLEIN SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER FEBRUARY 26, 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: Vectrus Business Momentum
VECTRUS BUSINESS MOMENTUM On track to achieve our five-year goal of $2.5 billion in revenue and 7% EBITDA margin • Solid 2018 performance, double-digit revenue and adjusted diluted EPS1 growth • Strong cash flow generation, representing 114% conversion • Diversifying the portfolio through growth – A
Slide 4: Strategic Execution
STRATEGIC EXECUTION 2018 was a solid year for Vectrus as we continue to demonstrate progress executing our strategy to grow and innovate in the converged infrastructure market Our Strategy Our Market1 Conventional Addressable Market ~ $38B Facilities, Supply Chain and IT O&M Enhance Expand Services
Slide 5: Enhancing the Foundation
ENHANCING THE FOUNDATION Strong organic growth plus support from a key acquisition is enhancing the foundation 26% • Leading operator of facilities, supply chains and IT networks for 74% the U.S. military and intelligence community Capability Services / F&LS IT • Aligned to strong and enduring fundi
Slide 6: Expanding the Portfolio
EXPANDING THE PORTFOLIO 2018 organic growth and strong new business pipeline will continue contract type and client portfolio diversification 2018 Bookings - $1.4B 2018 New Business Wins - $350M Contract Name Contract Type Contract Value Estimated Contract Duration Kuwait DFAC 3.0 Cost-Plus $108M Fe
Slide 7: Portfolio Diversification
PORTFOLIO DIVERSIFICATION Deliberate, campaign based, approach to Air Force Campaign Case Study organic growth in targeted clients: Air Force revenue up ~50% year- • Tailored attack plan with differentiated value over-year in 2018 proposition • Currently largest full and open category Base Operation
Slide 8: Adding More Value
ADDING MORE VALUE Enterprise Vectrus is improving performance and expanding margins EBITDA Margin EBITDA Technology based solutions are essential to differentiate and expand margins • In 2018, we introduced several smart energy and resilience solutions: • Introduced Argus, a Vectrus solution that pr
Slide 9: LOGCAP V / K-BOSSS
LOGCAP V / K-BOSSS Vectrus is well positioned to receive a seat on the $82B LOGCAP V contract vehicle, anticipated award date of 12 April 2019 K-BOSSS • Kuwait-Base Operations and Security Support Services contract (K-BOSSS) represented ~40% of 2018 revenue and will roll under LOGCAP V • We have a t
Slide 10: Financial Highlights
FINANCIAL HIGHLIGHTS • Q4 2018 financial results - Revenue of $330 million, up $34 million or 11% - Operating margin of 3.8%; diluted EPS of $0.89 • Full-year 2018 financial results - Revenue of $1,279 million, up $165 million or 15% - Operating margin of 3.8%; diluted EPS of $3.10 • Contract bookin
Slide 11: 2018 Financial Results
2018 FINANCIAL RESULTS (1) See appendix for reconciliation of non-GAAP measures Page 11
Slide 12: Backlog
BACKLOG(1) ($ in thousands) $2,933 $3,011 $2,412 $2,356 (2) • Total backlog $3,011 million as of December 31, 2018 - Funded backlog $688 million - Unfunded backlog $2,323 million (1) Total backlog represents firm orders and potential options on multi-year contracts, excluding potential orders under
Slide 13: 2019 Guidance
2019 GUIDANCE 2019 guidance assumptions: • Capital expenditures approximately $8.5 million • Depreciation and amortization approximately $4.1 million • Mandatory debt payments $4.5 million • Interest expense approximately $4.7 million • Estimated tax rate of 21% • Diluted EPS assumes 11.5 million we
Slide 14: Vectrus Business Momentum
VECTRUS BUSINESS MOMENTUM On track to achieve our five-year goal of $2.5 billion in revenue and 7% EBITDA margin • Solid 2018 performance – Double-digit revenue and adjusted diluted EPS growth – Strong cash flow generation – Added $350 million of new contract awards to backlog • Strategic execution
Slide 15: Appendix
APPENDIX VECTRUS.
Slide 16: 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 net income, adjusted diluted earnings per share, EBITDA and EBITDA % to be
Slide 17: Vectrus Fourth Quarter 2018 Results and Issuance 2018 Guidance
VECTRUS FOURTH QUARTER 2018 RESULTS AND ISSUANCE 2018 GUIDANCE CHUCK PROW PRESIDENT AND CHIEF EXECUTIVE OFFICER MATT KLEIN SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER