Vectrus Announces Second Quarter 2019 Results

- Revenue grew 3.3% year-over-year to $332 million; Diluted EPS of $0.66 includes $0.08 per share of M&A related costs and LOGCAP V pre-operational legal costs

- Adjusted EBITDA margin(1) of 4.2% +30BPS vs Q1; Adjusted diluted EPS(1) of $0.74 +7% vs Q1; Strong Q2 operating cash flow of $22 million

- 2019 guidance for revenue growth increased to 7%-9% year-over-year; EBITDA(1) and diluted EPS guidance revised to reflect investments in growth, global operations, and non-operating costs

- Reiterating 5-year goals of $2.5 billion in annual revenue and 7% EBITDA margin(1)

Company Release - 8/6/2019 4:05 PM ET

COLORADO SPRINGS, Colo., Aug. 6, 2019 /PRNewswire/ -- Vectrus, Inc. (NYSE:VEC) announced second quarter 2019 financial results for the quarter ended June 28, 2019.

Vectrus Logo.

"The second quarter demonstrated continued momentum in the market place and in the execution of our strategy," said Chuck Prow, president and chief executive officer. "Our growth-related efforts continue to be successful, as we significantly increased our revenue with the Navy and the Air Force, won new contracts, including our first contract with Department of State, expanded existing contracts, secured recompete business, and won a seat on the previously announced Army's LOGCAP V contract. Our momentum is underscored by our strong backlog, which including LOGCAP V, equates to 3.6 times our 2018 revenue. As a reminder, LOGCAP V is currently under protest and still anticipated to be resolved in mid-August. We continue to invest in all aspects of our business, including the acquisition of Advantor in the third quarter, which will enhance and expand our operational technology offerings. Notwithstanding our continuing growth and operational related investments, diluted EPS increased 6% sequentially on 20 BPS of EBITDA margin1 expansion."

Second Quarter 2019 Results

Second quarter 2019 adjusted results exclude M&A related costs and LOGCAP V pre-operational legal costs, which together totaled $1.2 million pretax.

Second quarter 2019 revenue of $331.6 million, increased $10.5 million or 3% compared to second quarter 2018. The increased revenue was attributable mainly to increases from Middle East and European programs.

Operating income was $11.2 million or 3.4% operating margin for the second quarter 2019, compared to $13.0 million or 4.0% in second quarter 2018. Adjusted operating income1 was $12.4 million or 3.8% margin for the second quarter 2019, compared to $13.5 million or 4.2% in second quarter 2018. EBITDA1 was $12.6 million or 3.8% margin for the second quarter 2019, compared to $13.8 million or 4.3% in second quarter 2018. Adjusted EBITDA1 was $13.9 million or 4.2% margin for the second quarter 2019, compared to $14.3 million or 4.5% in second quarter 2018.

Second quarter 2019 diluted EPS were $0.66 compared to $0.81 in second quarter 2018. Second quarter 2019 adjusted diluted EPS1 were $0.74 compared to $0.84 in second quarter 2018.

Net cash generated from operating activities for the quarter ended June 28, 2019 was $22 million, a $6.0 million improvement compared to second quarter 2018. Days sales outstanding (DSO) was 63 days in the second quarter of 2019.

Total debt at June 28, 2019 was $73.0 million, which was down $4.0 million from $77.0 million at June 29, 2018. Cash at quarter-end was $70.3 million. As of June 28, 2019, total consolidated indebtedness to consolidated EBITDA1 (total leverage ratio) was 1.17x to 1.00x.

Total backlog at June 28, 2019 was $3.2 billion and funded backlog was $934 million. Backlog including LOGCAP V is $4.6 billion.

"Vectrus' growth continued in the second quarter, and we recorded sequential expansion in revenue, EBITDA margin1 and earnings per share, keeping with the expected progression of our results through the year," said Bill Noon, acting chief financial officer of Vectrus. "Operating cash generation in the quarter was strong at $22 million, and we expect to generate over 100 percent cash conversion compared to net income for the year. Our balance sheet and financial flexibility remain strong to support our strategy. Given the impacts to our GAAP results from the M&A and LOGCAP V pre-operational legal costs we are incurring this year, we have opted to increase our use of adjusted non-GAAP measures that we believe better reflect our operational performance."

Adjusting 2019 Guidance

Mr. Prow continued, "To reflect 2019 new business and current contract expansion results to date, and the Advantor acquisition, we now expect to generate revenue growth of 7 to 9 percent in 2019, which is up from our prior guidance of 2 to 4 percent. Additionally, to support this, and anticipated future growth, we have pulled forward investments in our global operations. Our enterprise wide performance improvement initiative, Enterprise Vectrus, is streamlining and automating our core program and support processes, transforming our supply chain, and more effectively integrating and leveraging our global operations to generate better client outcomes; while improving margins over time.  Therefore, while we have increased our revenue range, we have lowered and tightened our diluted EPS range, due primarily to higher non-operational costs, while slightly increasing the midpoint of adjusted EBITDA margin1. These efforts are in service of fulfilling the opportunity we have to transform Vectrus into a larger scale, higher value, differentiated platform."

Mr. Prow concluded, "We continue to believe that based on our current new business awards, pipeline, and anticipated timing on LOGCAP V revenue, we are on track to achieve double digit revenue growth in 2020, and are making great strides in driving toward our goal of $2.5 billion in annual revenue and 7% in EBITDA margin by 2023. We want to thank our teams around the world who support our servicemen and women in their critical missions and are focused on advancing our capabilities and competitive profile to further differentiate the company as an innovator in the emerging converged infrastructure market."

Vectrus is presenting non-GAAP measures including adjusted operating income and margin1, adjusted EBITDA and margin1, adjusted net income1, and adjusted diluted earnings per share1 to measure performance. These non-GAAP measures remove the impact of expenses associated with M&A and LOGCAP V pre-operational legal costs and, in the Company's opinion, better reflect the underlying operations of the business.

Vectrus' updated 2019 guidance ranges are included in the table below and assume interest expense of $6.0 million, operational capital expenditures of approximately $10.0 million, depreciation and amortization expense of $7.1 million, mandatory debt payments of $4.5 million, a tax rate of 22 percent and weighted average diluted shares outstanding of 11.6 million at December 31, 2019.

Additionally, full-year GAAP estimates include M&A related costs of $2.6 million and LOGCAP V pre-operational costs of $1.1 million, which are excluded from adjusted EBITDA1, adjusted Net Income1, and adjusted diluted EPS1 measures.

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts

Updated 2019
Guidance

Previous 2019
Guidance

Updated
2019 Mid

Previous
2019 Mid


Revenue

$1,370


to

$1,390


$1,300


to

$1,330


$1,380


$1,315


Operating Margin

3.5

%

to

3.7

%

3.8

%

to

4.2

%

3.6

%

4.0

%

Adjusted Operating Margin1

3.8

%

to

4.0

%


to


3.9

%


EBITDA Margin1

4.0

%

to

4.2

%

4.1

%

to

4.5

%

4.1

%

4.3

%

Adjusted EBITDA Margin1

4.3

%

to

4.5

%


to


4.4

%


Net Income

$32.7


to

$35.4


$35.3


to

$40.4


$34.1


$37.9


Diluted EPS 2

$2.82


to

$3.05


$3.07


to

$3.51


$2.94


$3.29


Adjusted Net Income1

$35.5


to

$38.2



to


$36.9



Adjusted Diluted EPS1,2

$3.06


to

$3.29



to


$3.18



Net Cash Provided by Operating Activities

$38.0


to

$42.0


$40.0


to

$46.0


$40.0


$43.0




The Company notes that forward-looking statements of future performance made in this release, including 2019 guidance, 2020 revenue growth, the LOGCAP V award and the five-year growth plan 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 2019 Conference Call

Management will conduct a conference call with analysts and investors at 4:30 p.m. ET on Tuesday, August 6, 2019. 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 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 20, 2019, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13692469.

Footnotes:


1 See appendix for reconciliation.


2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million.

About Vectrus

Vectrus is a leading global government services company 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 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 their customers' mission success. Vectrus is headquartered in Colorado Springs, Colo., and includes about 6,700 employees spanning 129 locations in 22 countries. In 2018, Vectrus generated sales of $1.3 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 "Adjusted 2019 Guidance" above and other assumptions contained therein for purposes of such guidance, other statements about our five-year growth plan, revenue (including 2020 revenue) and DSO, our credit facility, debt payments, expense savings, contract opportunities, bids and awards, including the LOGCAP V award, and CENTCOM and INDOPACOM task orders, collections, business strategy, outlook, objectives, plans, intentions or goals, 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. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to: our dependence on a few large contracts for a significant portion of our revenue; competition in our industry; our mix of cost-plus, cost-reimbursable, and firm-fixed price contracts; our dependence on the U.S. government and the importance of our maintaining a good relationship with the U.S. government, our ability to submit proposals for and/or win potential opportunities in our pipeline; our ability to retain and renew our existing contracts; protests of new awards; including protests of the LOGCAP V award and CENTCOM and INDOPACOM task orders; any acquisitions, investments or joint ventures, including the integration of acquisitions into our business; our international operations, including the economic, political and social conditions in the countries in which we conduct our businesses; changes in U.S. government military operations; changes in, or delays in the completion of, U.S. or international government budgets or government shutdowns; government regulations and compliance therewith, including changes to the Department of Defense procurement process; changes in technology; intellectual property matters; governmental investigations, reviews, audits and cost adjustments; contingencies related to actual or alleged environmental contamination, claims and concerns; our success in expanding our geographic footprint or broadening our customer base, markets and capabilities; our ability to realize the full amounts reflected in our backlog; impairment of goodwill; our performance of our contracts and our ability to control costs; our level of indebtedness; our compliance with the terms of our credit agreement; subcontractor and employee performance and conduct; our teaming arrangements with other contractors; economic and capital markets conditions; our ability to retain and recruit qualified personnel; our maintenance of safe work sites and equipment; our compliance with applicable environmental, health and safety regulations; our ability to maintain required security clearances; any disputes with labor unions; costs of outcome of any legal proceedings; security breaches and other disruptions to our information technology and operations; changes in our tax provisions, including under the Tax Cuts and Jobs Act, or exposure to additional income tax liabilities; changes in U.S. generally accepted accounting principles, including changes related to Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606); accounting estimates made in connection with our contracts; the adequacy of our insurance coverage; the volatility of our stock price; our exposure to interest rate risk; our compliance with public company accounting and financial reporting requirements; timing of payments by the U.S. government; risks and uncertainties relating to the spin-off from our former parent; and other factors set forth in Part I, Item 1A, - "Risk Factors," and elsewhere in our 2018 Annual Report on Form 10-K and described from time to time in our future reports filed with the 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



June 28,


June 29,


June 28,


June 29,

(In thousands, except per share data)


2019


2018


2019


2018

Revenue


$

331,589



$

321,132



$

657,517



$

641,649


Cost of revenue


300,553



292,064



596,149



586,114


Selling, general and administrative expenses


19,843



16,070



39,762



33,865


Operating income


11,193



12,998



21,606



21,670


Interest expense, net


(1,329)



(1,140)



(2,904)



(2,305)


Income from operations before income taxes


9,864



11,858



18,702



19,365


Income tax expense


2,247



2,663



3,994



4,058


Net income


$

7,617



$

9,195



$

14,708



$

15,307











Earnings per share









Basic


$0.66



$0.82



$1.29



$1.37


Diluted


$0.66



$0.81



$1.28



$1.35


Weighted average common shares outstanding - basic


11,455



11,235



11,376



11,191


Weighted average common shares outstanding - diluted


11,605



11,383



11,512



11,351











 

VECTRUS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS 




June 28,


December 31,

(In thousands, except share information)


2019


2018

Assets


(Unaudited)



Current assets





Cash


$

70,329



$

66,145


Receivables


237,247



232,119


Other current assets


20,907



15,063


Total current assets


328,483



313,327


Property, plant, and equipment, net


16,253



13,419


Goodwill


233,619



233,619


Intangible assets, net


13,853



8,630


Right-of-use assets


17,987




Other non-current assets


4,233



3,248


Total non-current assets


285,945



258,916


Total Assets


$

614,428



$

572,243


Liabilities and Shareholders' Equity





Current liabilities





Accounts payable


$

157,486



$

156,393


Compensation and other employee benefits


45,577



41,790


Short-term debt


5,500



4,500


Other accrued liabilities


37,217



22,303


Total current liabilities


245,780



224,986


Long-term debt, net


66,338



69,137


Deferred tax liability


52,460



55,358


Other non-current liabilities


10,174



1,462


Total non-current liabilities


128,972



125,957


Total liabilities


374,752



350,943


Commitments and contingencies





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; 11,506,228 and 11,266,906 shares issued and outstanding as of June 28, 2019 and December 31, 2018, respectively


115



113


Additional paid in capital


76,642



71,729


Retained earnings


167,583



152,616


Accumulated other comprehensive loss


(4,664)



(3,158)


Total shareholders' equity


239,676



221,300


Total Liabilities and Shareholders' Equity


$

614,428



$

572,243


 

VECTRUS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)




Six Months Ended



June 28,


June 29,

(In thousands)


2019


2018

Operating activities





Net income


$

14,708



$

15,307


Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation expense


1,538



687


Amortization of intangible assets


1,277



937


Loss on disposal of property, plant, and equipment


2



51


Stock-based compensation


4,031



2,521


Amortization of debt issuance costs


201



213


Changes in assets and liabilities:





Receivables


(224)



(8,820)


Other assets


(7,128)



(4,518)


Accounts payable


2,038



693


Deferred taxes


(2,579)



(1,274)


Compensation and other employee benefits


3,324



(1,950)


Other liabilities


(1,738)



325


Net cash provided by operating activities


15,450



4,172


Investing activities





Purchases of capital assets and intangibles


(11,739)



(764)


Acquisition of business, net of cash acquired




(37,210)


Net cash used in investing activities


(11,739)



(37,974)


Financing activities





Repayments of long-term debt


(2,000)



(2,000)


Proceeds from revolver


98,000



55,000


Repayments of revolver


(98,000)



(55,000)


Proceeds from exercise of stock options


3,467



1,358


Payments of employee withholding taxes on share-based compensation


(768)



(803)


Net cash provided by (used in) financing activities


699



(1,445)


Exchange rate effect on cash


(226)



(1,248)


Net change in cash


4,184



(36,495)


Cash-beginning of year


66,145



77,453


Cash-end of period


$

70,329



$

40,958


Supplemental disclosure of cash flow information:





Interest paid


$

2,818



$

2,119


Income taxes paid


$

4,198



$

7,891


Non-cash investing activities:





Purchase of capital assets on account


$

301



$

481


Key Performance Indicators and Non-GAAP Financial 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 diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin to be useful to management and investors in evaluating our operating performance for the periods presented, 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.

Adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin, however, are not measures of financial performance under generally accepted accounting principles in the United States of America (GAAP) and should not be considered a substitute for net income and diluted earnings per share as determined in accordance with GAAP.  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, transaction and non-recurring integration 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, other income; significant charges or credits that impact current results but are not related to our ongoing operations and unusual and infrequent non-operating items and non-operating tax settlements or adjustments, such as revaluation of our deferred tax liability as a result of the Tax Cuts and Jobs Act, and net settlement of uncertain tax positions.

"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, transaction and non-recurring integration 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.

(In thousands)









EBITDA (Non-GAAP Measures)


Three months ended


Six Months Ended



June 28,


June 29,


June 28,


June 29,



2019


2018


2019


2018

Revenue


$

331,589



$

321,132



$

657,517



$

641,649











Operating Income


$

11,193



$

12,998



$

21,606



$

21,670


Operating Margin


3.4

%


4.0

%


3.3

%


3.4

%










Add:









Depreciation and Amortization


$

1,456



$

815



$

2,815



$

1,624











EBITDA


$

12,649



$

13,813



$

24,421



$

23,294


EBITDA Margin


3.8

%


4.3

%


3.7

%


3.6

%










Add:









M&A Related Costs


$

667



$

492



$

1,712



$

1,669


LOGCAP V Pre-Operational Legal Costs


579





579













Subtotal


$

1,246



$

492



$

2,291



$

1,669











Adjusted EBITDA


$

13,895



$

14,305



$

26,712



$

24,963


Adjusted EBITDA Margin


4.2

%


4.5

%


4.1

%


3.9

%

 

(In thousands, except per share data)









Adjusted Net Income and Adjusted Diluted Earnings Per Share (Non-GAAP Measures)


Three months ended


Six Months Ended



June 28,


June 29,


June 28,


June 29,



2019


2018


2019


2018

Revenue


$

331,589



$

321,132



$

657,517



$

641,649


Net Income


$

7,617



$

9,195



$

14,708



$

15,307


GAAP Diluted EPS


$

0.66



$

0.81



$

1.28



$

1.35











Add:









M&A Related Costs


$

667



$

492



$

1,712



$

1,669


LOGCAP V Pre-Operational Legal Costs


579





579













Subtotal


$

1,246



$

492



$

2,291



$

1,669











Tax impact of adjustments


$

(284)



$

(111)



$

(489)



$

(350)











Adjusted Net Income


$

8,579



$

9,576



$

16,510



$

16,626


Adjusted Net Income Margin


2.6

%


3.0

%


2.5

%


2.6

%










Weighted average common shares outstanding, diluted


11,605



11,383



11,512



11,351


Adjusted Diluted EPS


$

0.74



$

0.84



$

1.43



$

1.46


 

(In thousands)









Adjusted Operating Income and Adjusted Operating Margin (Non-GAAP Measures)


Three months ended


Six Months Ended



June 28,


June 29,


June 28,


June 29,



2019


2018


2019


2018

Revenue


$

331,589



$

321,132



$

657,517



$

641,649


Operating Income


$

11,193



$

12,998



$

21,606



$

21,670


Operating Margin


3.4

%


4.0

%


3.3

%


3.4

%










Add:









M&A Related Costs


$

667



$

492



$

1,712



$

1,669


LOGCAP V Pre-Operational Legal Costs


579





579













Subtotal


$

1,246



$

492



$

2,291



$

1,669











Adjusted Operating Income


$

12,439



$

13,490



$

23,897



$

23,339


Adjusted Operating Margin


3.8

%


4.2

%


3.6

%


3.6

%

 

(In millions)









Adjusted EBITDA Margin Guidance and 2018 Actual (Non-GAAP Measures)


2019
Guidance
High


2019
Guidance 
Mid


2019
Guidance
Low


2018
Actual










Revenue


$

1,390



$

1,380



$

1,370



$

1,279











Operating Income


$

51.4



$

49.8



$

48.0



$

48.3


Operating Margin


3.7

%


3.6

%


3.5

%


3.8

%










Add:









Depreciation and Amortization


$

7.1



$

7.1



$

7.1



$

3.8











EBITDA


$

58.5



$

56.9



$

55.1



$

52.1


EBITDA Margin


4.2

%


4.1

%


4.0

%


4.1

%










Add:









M&A Related Costs


$

2.6



$

2.6



$

2.6



$

1.5


LOGCAP V Pre-Operational Legal Costs


1.1



1.1



1.1













Subtotal


$

3.7



$

3.7



$

3.7



$

1.5











Adjusted EBITDA


$

62.2



$

60.6



$

58.8



$

53.6


Adjusted EBITDA Margin


4.5

%


4.4

%


4.3

%


4.2

%

 

(In millions, except per share data)







Adjusted Diluted Earnings Per Share Guidance (Non-GAAP Measures)


2019
Guidance
High


2019
Guidance 
Mid


2019
Guidance
Low








Net Income


$

35.4



$

34.1



$

32.7


GAAP Diluted EPS


$

3.05



$

2.94



$

2.82









Add:







M&A Related Costs


$

2.6



$

2.6



$

2.6


LOGCAP V Pre-Operational Legal Costs


1.1



1.1



1.1









Subtotal


$

3.7



$

3.7



$

3.7









Tax impact of adjustments


$

(0.9)



$

(0.9)



$

(0.9)









Adjusted Net Income


$

38.2



$

36.9



$

35.5









Weighted average common shares outstanding, diluted


11.6



11.6



11.6









Adjusted Diluted EPS


$

3.29



$

3.18



$

3.06


 

(In millions)









Adjusted Operating Margin Guidance and 2018 Actual (Non-GAAP Measures)


2019
Guidance
High


2019
Guidance 
Mid


2019
Guidance
Low


2018
Actual










Revenue


$

1,390



$

1,380



$

1,370



$

1,279











Operating Income


$

51.4



$

49.8



$

48.0



$

48.3


Operating Margin


3.7

%


3.6

%


3.5

%


3.8

%










Add:









M&A Related Costs


$

2.6



$

2.6



$

2.6



$

1.5


LOGCAP V Pre-Operational Legal Costs


1.1



1.1



1.1













Subtotal


$

3.7



$

3.7



$

3.7



$

1.5











Adjusted Operating Income


$

55.1



$

53.5



$

51.7



$

49.8


Adjusted Operating Margin


4.0

%


3.9

%


3.8

%


3.9

%

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



June 28,

2019


% of
Total


June 29,

2018


% of
Total


June 28,

2019


% of
Total


June 29,

2018


% of
Total

(In thousands)









Army


$

225,867



68

%


$

238,381



74

%


$

452,559



69

%


$

476,228



74

%

Air Force


72,593



22

%


60,420



19

%


140,524



21

%


125,676



20

%

Navy


16,796



5

%


9,987



3

%


31,906



5

%


18,344



3

%

Other


16,333



5

%


12,344



4

%


32,528



5

%


21,401



3

%

Total revenue


$

331,589





$

321,132





$

657,517





$

641,649






































Revenue by Contract Type


Three Months Ended


Six Months Ended



June 28,

2019


% of
Total


June 29,

2018


% of
Total


June 28,

2019


% of
Total


June 29,

2018


% of
Total

(In thousands)









Cost-plus and cost-reimbursable 1


$

256,737



77

%


$

242,742



76

%


$

508,215



77

%


$

472,951



74

%

Firm-fixed-price


74,852



23

%


78,390



24

%


149,302



23

%


168,698



26

%

Total revenue


$

331,589





$

321,132





$

657,517





$

641,649





















1 Includes time and material contracts



















































Revenue by Contract Relationship


Three Months Ended


Six Months Ended



June 28,

2019


% of
Total


June 29,

2018


% of
Total


June 28,

2019


% of
Total


June 29,

2018


% of
Total

(In thousands)









Prime contractor


$

312,732



94

%


$

301,088



94

%


$

619,789



94

%


$

602,116



94

%

Subcontractor


18,857



6

%


20,044



6

%


37,728



6

%


39,533



6

%

Total revenue


$

331,589





$

321,132





$

657,517





$

641,649






































Revenue by Geographic Region


Three Months Ended


Six Months Ended

(In thousands)


June 28,

2019



% of
Total


June 29,

2018



% of
Total


 

June 28,

2018



% of
Total


 

June 29,

2019



% of
Total

Middle East


$

223,588



67

%


$

219,218



69

%


$

450,004



68

%


$

439,098



69

%

United States


72,376



22

%


74,847



23

%


143,786



22

%


148,636



23

%

Europe


35,625



11

%


27,067



8

%


63,727



10

%


53,915



8

%

Total revenue


$

331,589





$

321,132





$

657,517





$

641,649






 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/vectrus-announces-second-quarter-2019-results-300897499.html

SOURCE Vectrus, Inc.