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Vectrus, Inc. (VEC) Tops Q1 EPS by 1c, Revenues Miss; Offers FY20 EPS/Revenue Mid-Point Guidance Below Consensus

May 12, 2020 4:13 PM EDT

Vectrus, Inc. (NYSE: VEC) reported Q1 EPS of $0.75, $0.01 better than the analyst estimate of $0.74. Revenue for the quarter came in at $352 million versus the consensus estimate of $337.89 million.

"Vectrus provides critical infrastructure support services globally for a variety of national security missions. This core competency combined with our backlog of long-term contracts with the U.S. government creates operating and financial resiliency, with predictable free cash flow, that is foundational to our business model," said Chuck Prow, president and chief executive officer. "Our first quarter revenue grew 8% with minimal impact from COVID-19, and adjusted EBITDA margin expanded year-over-year. Additionally, our growth focused campaigns continue to drive results as we recorded wins with the Army, Navy and Air Force, including a position on the AFCAP V $6.4 billion IDIQ contract vehicle. Our response to the COVID-19 pandemic has been measured, deliberate and client centric, keeping our clients, employees and partners safe while executing consistently on our programs. We are proud of the contributions our teams are making to support our men and women on the front lines at such a difficult time."

"I'm pleased to announce that we were able to post strong top and bottom-line growth despite COVID-19, which reinforces the resiliency of our business," said Susan Lynch, senior vice president and chief financial officer. "We estimate that COVID-19 impacted first quarter 2020 revenue and earnings per share by $2.2 million and $0.02, respectively."

"Backlog grew 48% sequentially to a record $4.1 billion and drove a 1.5x trailing twelve-month book-to-bill ratio," said Lynch. "The size of our backlog is an attractive attribute of our business, representing 2.7 times the midpoint of our 2020 full year revenue guidance, providing visibility into the remainder of the year and beyond."

GUIDANCE:

Vectrus, Inc. sees FY2020 EPS of $3.48-$3.81, versus the consensus of $3.70. Vectrus, Inc. sees FY2020 revenue of $1.475-1.525 million, versus the consensus of $1.51 million.

  • Vectrus is reiterating its full-year 2020 guidance while actively monitoring COVID-19 response and LOGCAP V phase in schedule.
  • There was minimal impact to revenue and operating income in the first quarter of 2020 due to COVID-19. The pandemic is estimated to have approximately a $20-25 million impact on revenue and a corresponding impact on operating income in the second quarter of 2020. The company continues to work with its clients with regard to its COVID-19 response and LOGCAP V phase in schedule and is maintaining its current guidance range.
  • In addition, guidance assumes capital expenditures of $7.0 million, depreciation and amortization of $8.4 million, mandatory debt payments of $6.5 million, interest expense of $5.6 million, tax rate of 23 percent, and weighted average diluted shares outstanding of 11.8 million at December 31, 2020.

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



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