Vectrus, Inc. (VEC) Tops Q1 EPS by 46c, Revenues Beat; Raises FY21 Revenues Mid-Point Outlook

Vectrus, Inc. (NYSE: VEC) reported Q1 EPS of $1.20, $0.46 better than the analyst estimate of $0.74. Revenue for the quarter came in at $434 million versus the consensus estimate of $376.95 million.

"Vectrus reported strong first quarter results driven by the continued momentum in the execution of our strategy," said Chuck Prow, Chief Executive Officer of Vectrus.

"During the quarter, revenue grew 23% year-over-year, with organic growth of 4%," said Prow. "Revenue growth was driven by our recent acquisitions, continued phase-in of LOGCAP V, as well as the progress made in executing growth in our core programs. Additionally, adjusted EBITDA margin increased 60 basis points year-over-year."

"Our growth-related activities and efforts to make Vectrus the premier converged infrastructure company continue to experience positive momentum," said Prow. "During the quarter Vectrus was awarded the CBRN integrated defense prime OTA contract, which was based on our well-known capabilities in sensor integration, Internet of Things, and perimeter security solutions. The award is valued at $19 million over two years and extends Vectrus' IoT, machine learning and data analytics offerings. This effort is co-sponsored between the DoD and Department of Homeland Security and provides sensor integration as well as data integration and analysis related to threat detection domestically. This program brings our digitally integrated solutions, that were originally deployed overseas, to the U.S. to support protection of the Homeland. We are pleased to have been selected for such an important mission and look forward to the opportunity to bring our unique and differentiated solutions utilized by the DoD to a new client and market. This work is illustrative of how Vectrus is building capabilities and inserting technology to deliver a more integrated and comprehensive suite of solutions in support of the converged infrastructure market."

Prow continued, "We are also continuing to execute our IDIQ portfolio by leveraging our converged solutions, geographic footprint, and ability to provide complex mission-critical IT services. During the quarter, we won a $22 million five-year task order under the Army's ITES-3S IDIQ to provide enterprise IT services to the U.S. Army Corp of Engineers across Europe. This is an important win for Vectrus which leverages the more than 30 years of experience we have in providing a full range of operations and maintenance, IT support and supply services with our Army OPMAS-E contract in Europe. This task order provides Vectrus with an opportunity to grow its' presence in support of the 37,000 U.S. Army Corp of Engineers civilians and soldiers that are delivering vital engineering services in over 130 countries worldwide."

"Last quarter we completed two strategic acquisitions that added key clients, capabilities, and accelerated our converged infrastructure strategy," said Prow. "The integration of these acquisitions is well underway and on track with our plan. We remain excited about the talent, combined capabilities, and opportunities for accelerated growth."

"Regarding LOGCAP V, we continue to phase-in and anticipate being at full operational capability in Iraq by June," said Prow. "In terms of INDOPACOM, the phase-in process remains elongated due to base access restrictions associated with COVID-19; but we continue to anticipate phase-in later this year with full operational capability in early 2022."

GUIDANCE:

Vectrus, Inc. sees FY2021 revenue of $1.68-1.715 billion, versus the consensus of $1.69 billion.

Lynch continued, "In light of our strong first quarter performance we are increasing the low-end of the guidance range." Guidance for 2021 is as follows:

For earnings history and earnings-related data on Vectrus, Inc. (VEC) click here.

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