COLORADO SPRINGS, Colo.,
Aug. 11, 2020 /PRNewswire/
-- Vectrus, Inc. (NYSE: VEC) announced second quarter 2020
financial results for the quarter ended July
3, 2020.
"Second quarter results demonstrated solid top line performance,
strong new business awards, and favorable cash flow generation
despite the impact of COVID-19. Margin and EPS were adversely
impacted by one-time closeouts and a contract adjustment to a
European program," said Chuck Prow,
president and chief executive officer. "The company is
working with the client to resolve this issue prior to the next
option period in mid-2021. Our updated guidance reflects the
continued impact from COVID-19 on existing programs and the delay
of LOGCAP V and other new programs due to host nation and base
access restrictions. We expect improved margins to drive EPS growth
in the second half of the year."
"During the quarter, we won three new contracts with our Navy
client, two of which were in collaboration with a joint venture
partner and are in the aggregate valued at $554 million," said Prow. "Our prospects for
growth, supported by our robust backlog and $10.6 billion pipeline, are unchanged. Our cash
flow generation and balance sheet remain strong and we are well
positioned for the future. We are maintaining an agile, deliberate
posture with respect to COVID-19 with focus on the safety of our
clients and team while executing consistently on our
programs. I would like to acknowledge the dedication and
innovation our entire work force has demonstrated to keep the
missions we operate at a high level of readiness throughout the
ongoing pandemic for our clients."
Second Quarter 2020 Results
Second quarter 2020 revenue of $336.1
million increased $4.5 million
or 1.3% compared to second quarter 2019. It is estimated that
revenue was adversely impacted by $22.3
million or 6.7% from the COVID-19 pandemic due to base
access restrictions. Revenue was also adversely impacted in the
quarter by the previously mentioned contract adjustment and
one-time closeouts totaling $4.2
million or 1.3%.
For the second quarter 2020, operating income was $2.4 million or 0.7% margin. Excluding M&A
related and LOGCAP V pre-operational costs, adjusted operating
income1 was $4.7 million
or 1.4% margin. Adjusted operating income1 was
adversely impacted by the COVID-19 deferral of high-margin revenue
due to base access restrictions into future periods of $2.1 million which had a 30-basis point impact to
adjusted operating margin1. Adjusted operating
income1 was also adversely impacted by the
above-mentioned contract adjustment and one-time closeouts of
$8.4 million, which had a 240-basis
point impact to adjusted operating margin.
EBITDA1 was $4.4
million or 1.3% margin for the second quarter 2020, compared
to $12.6 million or 3.8% margin in
the second quarter 2019. Excluding M&A related and LOGCAP V
pre-operational legal costs, adjusted EBITDA1 was
$6.7 million or 2.0% margin for the
second quarter 2020, compared to $13.9
million or 4.2% margin in the second quarter 2019. Adjusted
EBITDA1 was adversely impacted by COVID-19 of
$2.1 million, which had a 30-basis
point impact to adjusted EBITDA margin1. Adjusted
EBITDA1 was also adversely impacted by the
above-mentioned adjustments of $8.4
million, which had a 240-basis point impact.
Second quarter 2020 diluted EPS was $0.09 compared to $0.66 in second quarter 2019. Excluding M&A
related and LOGCAP V pre-operational costs, adjusted diluted
EPS1 for the second quarter 2020 was $0.24. Adjusted diluted EPS1 was
adversely impacted due to COVID-19 by $0.14, and by the above-mentioned adjustments of
$0.54. The tax rate in the second
quarter 2020 was a benefit of 2.5% as compared to a tax rate of
22.8% in the second quarter 2019. The company benefited in
the quarter from the resolution of a foreign tax matter related to
prior periods, which had a positive effect on both diluted EPS and
adjusted diluted EPS1 of $0.02.
"The combination of one-time closeouts and the adjustment to a
European program adversely impacted our second quarter results, and
are now behind us," said Susan
Lynch, senior vice president and chief financial officer.
"We continue to believe our business is resilient and stronger than
ever. Vectrus continues to invest in hardening its processes,
completing the rollout of its enterprise systems and enhancing our
talent to support projected growth. Free cash flow has been strong.
Our low leverage ratio and strong cash position provides the
Company with $180 million dollars of
liquidity to invest in long-term growth."
Net cash provided by operating activities for the quarter ended
July 3, 2020 was $33.3 million, compared to net cash provided by
operating activities of $21.8 million
in the second quarter of 2019. Cash flow was favorably impacted by
approximately $13 million of CARES
Act Federal estimated payments and employee payroll tax
deferrals. Days sales outstanding (DSO) was 67 days in the
second quarter of 2020.
Net debt at July 3, 2020 was
$4.8 million, down from $35.2 million at December
31, 2019. Total debt at July 3,
2020 was $67.5 million, down
$3.0 million from $70.5 million at December
31, 2019 due to mandatory payments. Cash at quarter-end was
$62.7 million, up from $35.3 million at December
31, 2019. As of July 3, 2020,
the revolver, was undrawn and combined with cash, results in total
liquidity of $180 million. Total
consolidated indebtedness to consolidated
EBITDA1 (total leverage ratio) was 1.08x. Net debt
to consolidated EBITDA1 was 0.08x.
Total backlog as of July 3, 2020
was $3.8 billion and funded backlog
was $0.9 billion. The trailing
twelve-month book-to-bill was 1.4x as of July 3, 2020.
Revised 2020 Guidance
Vectrus is revising and narrowing its full-year 2020 guidance
ranges for revenue, EBITDA, and diluted EPS to include second
quarter results. The outlook for net cash provided by operating
activities remains unchanged as a result of the favorable impact of
the CARES Act tax deferrals, lower capital expenditure outlook and
lower EBITDA projections.
The transition of LOGCAP V and newly won programs have slowed
due to COVID-19 as restrictions in both host nation and base access
continue to be gating factors to full operational capability.
Additionally, protests on new business awards are limiting our
ability to conduct transition and phase-in activities.
The COVID-19 pandemic is now estimated to defer 2020 revenue of
approximately $65 million and EBITDA
of $4 million into future periods.
While we expect the vast majority of the associated revenue and
profit to remain in our backlog, the contribution will be
determined by the timing of services performed in future
contractual periods. The Company continues to work with its clients
to maintain operations and plan a safe return to work in light of
the COVID-19 pandemic.
In addition, guidance for capital expenditures has been reduced
from $7.0 million to $5.0 million, depreciation and amortization has
been reduced from $8.4 million to
$8.1 million. Mandatory debt
payments of $6.5 million, interest
expense of $5.6 million, tax rate of
23%, and weighted average diluted shares outstanding of 11.8
million at December 31, 2020 remain
unchanged.
$ millions, except
for EBITDA margins and per share amounts
|
Revised 2020
Guidance
|
Prior 2020
Guidance
|
Revenue
|
$1,385
|
to
|
$1,405
|
$1,475
|
to
|
$1,525
|
EBITDA
Margin
|
3.8%
|
to
|
3.9%
|
4.6%
|
to
|
4.8%
|
Adjusted EBITDA
Margin*
|
4.0%
|
to
|
4.1%
|
4.6%
|
to
|
4.8%
|
Diluted Earnings Per
Share
|
$2.53
|
to
|
$2.67
|
$3.48
|
to
|
$3.81
|
Adjusted Diluted
Earnings Per Share*
|
$2.68
|
to
|
$2.82
|
$3.48
|
to
|
$3.81
|
Net Cash Provided by
Operating Activities
|
$45.0
|
to
|
$55.0
|
$45.0
|
to
|
$55.0
|
|
* Adjusted EBITDA
margin1 and Adjusted Diluted Earnings Per
Share1, excludes any M&A related costs and LOGCAP V
pre-operational legal costs.
|
The Company notes that forward-looking statements are based upon
current expectations and are subject to factors that could cause
actual results to differ materially from those suggested here,
including those factors set forth in the Safe Harbor Statement
below.
Second Quarter 2020 Conference Call
Management will conduct a conference call with analysts and
investors at 4:30 p.m. ET on Tuesday, August
11, 2020. U.S.-based participants may dial in to the
conference call at 877-407-0792, while international participants
may dial 201-689-8263. For all other listeners, a live webcast of
the conference call will be available on the Vectrus Investor
Relations website at
http://investors.vectrus.com. An accompanying slide presentation
will also be available on the Vectrus Investor Relations
website.
A replay of the conference call will be posted on the Vectrus
website shortly after completion of the call and will be available
for one year. A telephonic replay will also be available through
August 25, 2020, at 844-512-2921
(domestic) or 412-317-6671 (international) with passcode
13707461.
Footnotes:
|
1 See
"Key Performance Indicators and Non-GAAP Financial Measures" for
reconciliation.
|
About Vectrus
Vectrus is a leading provider of global service solutions
with a history in the services market that dates back more than 70
years. The company provides facility and base operations; supply
chain and logistics services; information technology mission
support; and engineering and digital technology
services primarily to U.S. government customers around the
world. Vectrus is differentiated by operational excellence,
superior program performance, a history of long-term customer
relationships and a strong commitment to its clients' mission
success. Vectrus is headquartered in Colorado Springs, Colo., and includes about
7,200 employees spanning 148 locations in 26 countries and
territories across four continents. In 2019, Vectrus generated
sales of $1.4 billion. To learn about
career opportunities at Vectrus, visit www.vectrus.com/careers. For
more information, visit the company's website at www.vectrus.com or
connect with Vectrus on Facebook, Twitter, and LinkedIn.
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 include, but are not limited to, all of
the statements and items listed in the table in "Revised 2020
Guidance" above and other assumptions contained therein for
purposes of such guidance, other statements about our 2020
performance outlook, five-year growth plan, revenue, DSO, contract
opportunities, the potential impact of COVID-19, and any discussion
of future operating or financial performance.
Whenever used, words such as "may," "are considering," "will,"
"likely," "anticipate," "estimate," "expect," "project," "intend,"
"plan," "believe," "target," "could," "potential," "continue,"
"goal" or similar terminology are forward-looking statements. These
statements are based on the beliefs and assumptions of our
management based on information currently available to
management.
These forward-looking statements are not guarantees of future
performance, conditions or results, and involve a number of known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside our management's control, that
could cause actual results to differ materially from the results
discussed in the forward-looking statements. For a discussion
of some of the risks and important factors that could cause actual
results to differ from such forward-looking statements, see the
risks and other factors detailed from time to time our Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q, and other
filings with the U.S. Securities and Exchange Commission.
We undertake no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
CONTACT:
Vectrus
Mike Smith,
CFA
719-637-5773
michael.smith@vectrus.com
VECTRUS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
July 3,
|
|
June 28,
|
|
July 3,
|
|
June 28,
|
(In thousands,
except per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue
|
|
$
|
336,063
|
|
|
$
|
331,589
|
|
|
$
|
687,797
|
|
|
$
|
657,495
|
|
Cost of
revenue
|
|
311,817
|
|
|
300,553
|
|
|
631,510
|
|
|
596,149
|
|
Selling, general, and
administrative expenses
|
|
21,816
|
|
|
19,843
|
|
|
41,374
|
|
|
39,762
|
|
Operating
income
|
|
2,430
|
|
|
11,193
|
|
|
14,913
|
|
|
21,584
|
|
Interest expense,
net
|
|
(1,346)
|
|
|
(1,329)
|
|
|
(3,048)
|
|
|
(2,904)
|
|
Income from
operations before income taxes
|
|
1,084
|
|
|
9,864
|
|
|
11,865
|
|
|
18,680
|
|
Income tax
expense
|
|
(27)
|
|
|
2,247
|
|
|
2,086
|
|
|
3,989
|
|
Net income
|
|
$
|
1,111
|
|
|
$
|
7,617
|
|
|
$
|
9,779
|
|
|
$
|
14,691
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$0.10
|
|
|
$0.66
|
|
|
$0.84
|
|
|
$1.29
|
|
Diluted
|
|
$0.09
|
|
|
$0.66
|
|
|
$0.83
|
|
|
$1.28
|
|
Weighted average
common shares outstanding - basic
|
|
11,607
|
|
|
11,455
|
|
|
11,575
|
|
|
11,376
|
|
Weighted average
common shares outstanding - diluted
|
|
11,745
|
|
|
11,605
|
|
|
11,742
|
|
|
11,512
|
|
VECTRUS,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
July 3,
|
|
December
31,
|
(In thousands,
except share information)
|
|
2020
|
|
2019
|
Assets
|
|
(unaudited)
|
|
|
Current
assets
|
|
|
|
|
Cash
|
|
$
|
62,719
|
|
|
$
|
35,318
|
|
Receivables
|
|
260,295
|
|
|
269,144
|
|
Other current
assets
|
|
21,980
|
|
|
16,154
|
|
Total current
assets
|
|
344,994
|
|
|
320,616
|
|
Property, plant, and
equipment, net
|
|
19,107
|
|
|
18,844
|
|
Goodwill
|
|
262,130
|
|
|
261,983
|
|
Intangible assets,
net
|
|
12,905
|
|
|
14,926
|
|
Right-of-use
assets
|
|
11,259
|
|
|
14,654
|
|
Other non-current
assets
|
|
7,386
|
|
|
5,366
|
|
Total non-current
assets
|
|
312,787
|
|
|
315,773
|
|
Total
Assets
|
|
$
|
657,781
|
|
|
$
|
636,389
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
|
142,138
|
|
|
$
|
148,015
|
|
Compensation and other
employee benefits
|
|
60,417
|
|
|
53,155
|
|
Short-term
debt
|
|
7,500
|
|
|
6,500
|
|
Other accrued
liabilities
|
|
45,655
|
|
|
37,409
|
|
Total current
liabilities
|
|
255,710
|
|
|
245,079
|
|
Long-term debt,
net
|
|
59,234
|
|
|
63,041
|
|
Deferred tax
liability
|
|
46,473
|
|
|
49,407
|
|
Other non-current
liabilities
|
|
26,929
|
|
|
19,997
|
|
Total non-current
liabilities
|
|
132,636
|
|
|
132,445
|
|
Total
liabilities
|
|
388,346
|
|
|
377,524
|
|
Shareholders'
Equity
|
|
|
|
|
Preferred stock; $0.01
par value; 10,000,000 shares authorized; No shares issued and
outstanding
|
|
—
|
|
|
—
|
|
Common stock; $0.01
par value; 100,000,000 shares authorized; 11,619,544 and 11,523,691
shares issued and outstanding as of July 3, 2020 and December 31,
2019,
respectively
|
|
116
|
|
|
115
|
|
Additional paid in
capital
|
|
79,944
|
|
|
78,757
|
|
Retained
earnings
|
|
194,854
|
|
|
185,075
|
|
Accumulated other
comprehensive loss
|
|
(5,479)
|
|
|
(5,082)
|
|
Total shareholders'
equity
|
|
269,435
|
|
|
258,865
|
|
Total Liabilities
and Shareholders' Equity
|
|
$
|
657,781
|
|
|
$
|
636,389
|
|
VECTRUS,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
|
|
Six Months
Ended
|
|
|
July 3,
|
|
June 28,
|
(In
thousands)
|
|
2020
|
|
2019
|
Operating
activities
|
|
|
|
|
Net income
|
|
$
|
9,779
|
|
|
$
|
14,691
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation
expense
|
|
1,971
|
|
|
1,538
|
|
Amortization of
intangible assets
|
|
2,028
|
|
|
1,277
|
|
Loss on disposal of
property, plant, and equipment
|
|
—
|
|
|
2
|
|
Stock-based
compensation
|
|
5,411
|
|
|
4,031
|
|
Amortization of debt
issuance costs
|
|
193
|
|
|
201
|
|
Changes in assets and
liabilities:
|
|
|
|
|
Receivables
|
|
9,429
|
|
|
(224)
|
|
Other
assets
|
|
(7,938)
|
|
|
(7,128)
|
|
Accounts
payable
|
|
(6,021)
|
|
|
2,038
|
|
Deferred
taxes
|
|
(2,735)
|
|
|
(2,579)
|
|
Compensation and other
employee benefits
|
|
7,037
|
|
|
3,324
|
|
Other
liabilities
|
|
15,252
|
|
|
(1,721)
|
|
Net cash provided
by operating activities
|
|
34,406
|
|
|
15,450
|
|
Investing
activities
|
|
|
|
|
Purchases of capital
assets and intangibles
|
|
(2,246)
|
|
|
(11,739)
|
|
Net cash (used in)
investing activities
|
|
(2,246)
|
|
|
(11,739)
|
|
Financing
activities
|
|
|
|
|
Repayments of long-term
debt
|
|
(3,000)
|
|
|
(2,000)
|
|
Proceeds from
revolver
|
|
144,000
|
|
|
98,000
|
|
Repayments of
revolver
|
|
(144,000)
|
|
|
(98,000)
|
|
Proceeds from exercise
of stock options
|
|
59
|
|
|
3,467
|
|
Payments of employee
withholding taxes on share-based compensation
|
|
(1,873)
|
|
|
(768)
|
|
Net cash (used in)
provided by financing activities
|
|
(4,814)
|
|
|
699
|
|
Exchange rate
effect on cash
|
|
55
|
|
|
(226)
|
|
Net change in
cash
|
|
27,401
|
|
|
4,184
|
|
Cash-beginning of
year
|
|
35,318
|
|
|
66,145
|
|
Cash-end of
period
|
|
$
|
62,719
|
|
|
$
|
70,329
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
Interest
paid
|
|
$
|
2,527
|
|
|
$
|
2,818
|
|
Income taxes
paid
|
|
$
|
70
|
|
|
$
|
4,198
|
|
Non-cash investing
activities:
|
|
|
|
|
Purchase of capital
assets on account
|
|
$
|
447
|
|
|
$
|
301
|
|
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 measures are the primary drivers for our earnings and
net cash from operating activities. Management evaluates its
contracts and business performance by focusing on revenue,
operating income and operating margin. Operating income represents
revenue less both cost of revenue and selling, general and
administrative (SG&A) expenses. Cost of revenue consists of
labor, subcontracting costs, materials, and an allocation of
indirect costs, which includes service center transaction costs.
SG&A expenses consist of indirect labor costs (including wages
and salaries for executives and administrative personnel), bid and
proposal expenses and other general and administrative expenses not
allocated to cost of revenue. We define operating margin as
operating income divided by revenue.
We manage the nature and amount of costs at the program level,
which forms the basis for estimating our total costs and
profitability. This is consistent with our approach for managing
our business, which begins with management's assessing the bidding
opportunity for each contract and then managing contract
profitability throughout the performance period.
In addition to the key performance measures discussed above, we
consider adjusted operating income, adjusted operating margin,
adjusted net income, adjusted diluted earnings per share, EBITDA,
adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, and organic
revenue to be useful to management and investors in evaluating our
operating performance, and to provide a tool for evaluating our
ongoing operations. This information can assist investors in
assessing our financial performance and measures our ability to
generate capital for deployment among competing strategic
alternatives and initiatives. We provide this information to our
investors in our earnings releases, presentations and other
disclosures.
Adjusted operating income, adjusted operating margin, adjusted
net income, adjusted diluted earnings per share, EBITDA, adjusted
EBITDA, EBITDA margin, adjusted EBITDA margin, and organic revenue,
however, are not measures of financial performance under GAAP and
should not be considered a substitute for operating income,
operating margin, net income and diluted earnings per share as
determined in accordance with GAAP. Definitions and
reconciliations of these items are provided below.
- Adjusted operating income is defined as operating
income, adjusted to exclude items that may include, but are not
limited to significant charges or credits, and unusual and
infrequent non-operating items, such as M&A transaction and
LOGCAP V pre-operational legal costs that impact current results
but are not related to our ongoing operations.
- Adjusted operating margin is defined as adjusted
operating income divided by revenue.
- Adjusted net income is defined as net income, adjusted
to exclude items that may include, but are not limited to,
significant charges or credits, and unusual and infrequent
non-operating items, such as M&A transaction and LOGCAP V
pre-operational legal costs, that impact current results but are
not related to our ongoing operations.
- Adjusted diluted earnings per share is defined as
adjusted net income divided by the weighted average diluted common
shares outstanding.
- EBITDA is defined as operating income, adjusted to
exclude depreciation and amortization.
- Adjusted EBITDA is defined as EBITDA, adjusted to
exclude items that may include, but are not limited to, significant
charges or credits and unusual and infrequent non-operating items,
such as M&A transaction and LOGCAP V pre-operational legal
costs that impact current results but are not related to our
ongoing operations.
- EBITDA margin is defined as EBITDA divided by
revenue.
- Adjusted EBITDA margin is defined as Adjusted EBITDA
divided by revenue.
- Organic revenue is defined as revenue, adjusted to
exclude revenue from acquired companies.
Adjusted Net
Income, Adjusted Diluted Earnings Per Share (Non-GAAP
Measures)
|
|
|
|
|
|
|
|
|
($ in thousands,
except per share data)
|
|
Three
Months
Ended July
3, 2020 As
Reported
|
|
M&A
Related
Costs
|
|
LOGCAP V
Pre-
Operational
Legal Costs
|
|
Three
Months
Ended July
3, 2020 As
Reported -
Adjusted
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
336,063
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
336,063
|
|
Growth
|
|
1.3
|
%
|
|
|
|
|
|
1.3
|
%
|
Growth,
organic
|
|
(1.8)
|
%
|
|
|
|
|
|
(1.8)
|
%
|
Operating
income
|
|
2,430
|
|
|
2,193
|
|
|
46
|
|
|
4,669
|
|
Operating
margin
|
|
0.7
|
%
|
|
|
|
|
|
1.4
|
%
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(1,346)
|
|
|
—
|
|
|
—
|
|
|
(1,346)
|
|
|
|
|
|
|
|
|
|
|
Income from
operations before income taxes
|
|
$
|
1,084
|
|
|
$
|
2,193
|
|
|
$
|
46
|
|
|
$
|
3,323
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(27)
|
|
|
504
|
|
|
11
|
|
|
488
|
|
Income tax
rate
|
|
(2.5)
|
%
|
|
23.0
|
%
|
|
23.0
|
%
|
|
14.7
|
%
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,111
|
|
|
$
|
1,689
|
|
|
$
|
35
|
|
|
$
|
2,835
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding, diluted
|
|
11,745
|
|
|
|
|
|
|
11,745
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
0.09
|
|
|
$
|
0.14
|
|
|
$
|
—
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
|
|
EBITDA (Non-GAAP
Measures)
|
|
|
|
|
|
|
|
|
($ in
thousands)
|
|
Three
Months
Ended July
3, 2020 As
Reported
|
|
M&A
Related
Costs
|
|
LOGCAP V
Pre-
Operational
Legal Costs
|
|
Three
Months
Ended July
3, 2020 As
Reported -
Adjusted
|
Operating
Income
|
|
$
|
2,430
|
|
|
$
|
2,193
|
|
|
$
|
46
|
|
|
$
|
4,669
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,988
|
|
|
—
|
|
|
—
|
|
|
1,988
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
4,418
|
|
|
$
|
2,193
|
|
|
$
|
46
|
|
|
$
|
6,657
|
|
EBITDA
Margin
|
|
1.3
|
%
|
|
|
|
|
|
2.0
|
%
|
|
Adjusted Net
Income, Adjusted Diluted Earnings Per Share (Non-GAAP
Measures)
|
|
|
|
|
|
|
|
|
($ in thousands,
except per share data)
|
|
Three
Months
Ended June
28, 2019 As
Reported
|
|
M&A
Related
Costs
|
|
LOGCAP V
Pre-
Operational
Legal Costs
|
|
Three
Months
Ended June
28, 2019 As
Reported -
Adjusted
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
331,589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
331,589
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
11,193
|
|
|
667
|
|
|
579
|
|
|
12,439
|
|
Operating
margin
|
|
3.4
|
%
|
|
|
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(1,329)
|
|
|
—
|
|
|
—
|
|
|
(1,329)
|
|
|
|
|
|
|
|
|
|
|
Income from
operations before income taxes
|
|
$
|
9,864
|
|
|
$
|
667
|
|
|
$
|
579
|
|
|
$
|
11,110
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
2,247
|
|
|
152
|
|
|
132
|
|
|
2,531
|
|
Income tax
rate
|
|
22.8
|
%
|
|
|
|
|
|
22.8
|
%
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
7,617
|
|
|
$
|
515
|
|
|
$
|
447
|
|
|
$
|
8,579
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding, diluted
|
|
11,605
|
|
|
|
|
|
|
11,605
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
0.66
|
|
|
|
|
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
EBITDA (Non-GAAP
Measures)
|
|
|
|
|
|
|
|
|
($ in
thousands)
|
|
Three
Months
Ended June
28, 2019 As
Reported
|
|
M&A
Related
Costs
|
|
LOGCAP V
Pre-
Operational
Legal Costs
|
|
Three
Months
Ended June
28, 2019 As
Reported -
Adjusted
|
Operating
Income
|
|
11,193
|
|
|
667
|
|
|
$
|
579
|
|
|
$
|
12,439
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
1,456
|
|
|
—
|
|
|
—
|
|
|
1,456
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
12,649
|
|
|
$
|
667
|
|
|
$
|
579
|
|
|
$
|
13,895
|
|
EBITDA
Margin
|
|
3.8
|
%
|
|
|
|
|
|
4.2
|
%
|
(In
thousands)
|
|
Three Months
Ended July 3,
2020 As
Reported
|
|
Three Months
Ended July 3,
2020 Advantor
|
|
Three Months
Ended July 3,
2020 As Reported
- Organic
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
336,063
|
|
|
$
|
10,287
|
|
|
$
|
325,776
|
|
|
|
|
|
|
|
|
($ In
thousands)
|
|
Three Months
Ended June 28,
2019 As
Reported
|
|
Three Months
Ended June 28,
2019 Advantor
|
|
Three Months
Ended June 28,
2019 As Reported
- Organic
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
331,589
|
|
|
$
|
—
|
|
|
$
|
331,589
|
|
|
|
|
|
|
|
|
Organic Revenue
$
|
|
|
|
|
|
$
|
(5,813)
|
|
Organic Revenue
%
|
|
|
|
|
|
(1.8)
|
%
|
SUPPLEMENTAL INFORMATION
Revenue by client branch, contract type, contract relationship,
and geographic region for the periods presented below was as
follows:
Revenue by
Client
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
($ In
thousands)
|
|
July 3,
2020
|
|
% of Total
|
|
June 28,
2019
|
|
% of Total
|
|
July 3,
2020
|
|
% of Total
|
|
June 28,
2019
|
|
% of Total
|
Army
|
|
$
|
227,351
|
|
|
68
|
%
|
|
$
|
225,867
|
|
|
68
|
%
|
|
$
|
474,906
|
|
|
69
|
%
|
|
$
|
452,559
|
|
|
69
|
%
|
Air Force
|
|
78,321
|
|
|
23
|
%
|
|
72,593
|
|
|
22
|
%
|
|
151,663
|
|
|
22
|
%
|
|
140,524
|
|
|
21
|
%
|
Navy
|
|
14,542
|
|
|
4
|
%
|
|
16,796
|
|
|
5
|
%
|
|
29,779
|
|
|
4
|
%
|
|
31,884
|
|
|
5
|
%
|
Other
|
|
15,849
|
|
|
5
|
%
|
|
16,333
|
|
|
5
|
%
|
|
31,449
|
|
|
5
|
%
|
|
32,528
|
|
|
5
|
%
|
Total
revenue
|
|
$
|
336,063
|
|
|
|
|
$
|
331,589
|
|
|
|
|
$
|
687,797
|
|
|
|
|
$
|
657,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by
Contract Type
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
($ In
thousands)
|
|
July 3,
2020
|
|
% of Total
|
|
June 28,
2019
|
|
% of Total
|
|
July 3,
2020
|
|
% of Total
|
|
June 28,
2019
|
|
% of Total
|
Cost-plus and
cost-reimbursable ¹
|
|
$
|
242,740
|
|
|
72
|
%
|
|
$
|
256,737
|
|
|
77
|
%
|
|
$
|
499,059
|
|
|
73
|
%
|
|
$
|
508,193
|
|
|
77
|
%
|
Firm-fixed-price
|
|
93,323
|
|
|
28
|
%
|
|
74,852
|
|
|
23
|
%
|
|
188,738
|
|
|
27
|
%
|
|
149,302
|
|
|
23
|
%
|
Total
revenue
|
|
$
|
336,063
|
|
|
|
|
$
|
331,589
|
|
|
|
|
$
|
687,797
|
|
|
|
|
$
|
657,495
|
|
|
|
¹ Includes time and
material contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by
Contract Relationship
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
($ In
thousands)
|
|
July 3,
2020
|
|
% of Total
|
|
June 28,
2019
|
|
% of Total
|
|
July 3,
2020
|
|
% of Total
|
|
June 28,
2019
|
|
% of Total
|
Prime
contractor
|
|
$
|
314,345
|
|
|
94
|
%
|
|
$
|
312,732
|
|
|
94
|
%
|
|
$
|
647,738
|
|
|
94
|
%
|
|
$
|
619,790
|
|
|
94
|
%
|
Subcontractor
|
|
21,718
|
|
|
6
|
%
|
|
18,857
|
|
|
6
|
%
|
|
40,059
|
|
|
6
|
%
|
|
37,705
|
|
|
6
|
%
|
Total
revenue
|
|
$
|
336,063
|
|
|
|
|
$
|
331,589
|
|
|
|
|
$
|
687,797
|
|
|
|
|
$
|
657,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by
Geographic Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
($ In
thousands)
|
|
July 3,
2020
|
|
% of Total
|
|
June 28,
2019
|
|
% of Total
|
|
July 3,
2020
|
|
% of Total
|
|
June 28,
2019
|
|
% of Total
|
Middle
East
|
|
$
|
216,763
|
|
|
65
|
%
|
|
$
|
223,588
|
|
|
67
|
%
|
|
$
|
454,700
|
|
|
66
|
%
|
|
$
|
450,004
|
|
|
68
|
%
|
United
States
|
|
83,770
|
|
|
25
|
%
|
|
72,376
|
|
|
22
|
%
|
|
165,239
|
|
|
24
|
%
|
|
143,764
|
|
|
22
|
%
|
Europe
|
|
35,530
|
|
|
10
|
%
|
|
35,625
|
|
|
11
|
%
|
|
67,858
|
|
|
10
|
%
|
|
63,727
|
|
|
10
|
%
|
Total
revenue
|
|
$
|
336,063
|
|
|
|
|
$
|
331,589
|
|
|
|
|
$
|
687,797
|
|
|
|
|
$
|
657,495
|
|
|
|
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SOURCE Vectrus, Inc.