VEC - Earnings call transcript Q4 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for joining us for the Vectrus Fourth Quarter and Full Year 2017 Earnings Conference Call and webcast. Today's call is being recorded. My name I Omar and I'll be the operator for today's call. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions] And now I'll pass the call over to your Mike Smith, Director of Investor Relations and Corporate Development at Vectrus.

Mike Smith

you. Thank everyone. afternoon, Good Vectrus and the Earnings Year Conference Call. Fourth to Full Quarter XXXX Welcome

are President Slide Chief Chuck Officer; today investors.vectrus.com. available us Joining Prow, Relations Investor Klein, for presentation website Vice on Slides our and turn and Senior President Officer. and to Financial Please today's are X. Matt Executive Chief

to press laws. to release factors call of materially obligation that may statement provisions of over to this harbor time, During management be cause will safe for harbor actual forward-looking At material today's assume presentation statements. the the results these safe contemplated making Chuck no Federal and the Prow. statements. I'd Please forward-looking We differ Securities a by presentation, like in the some results our our forward-looking statements turn our pursuant update to of review the from to description

Chuck Prow

joining Please organic am operating adjusted Thank per you fourth a Thank XX you, share. the and for with year-over-year XXXX We announce X. quarter point improvement I basis in on growth, margin Good XX% Slide strong results. today. diluted reported afternoon, Mike. pleased increase we completed to X% us revenue earnings call that to in everyone. turn

we for that net cash earnings were guidance. reported from all full Additionally the per year, operations diluted revenue, share and ahead of

recognize results awards. we business The contract execution XXXX. and of quarterly of backlog during made is have our every strategy providing in We demonstrable aspect progress operating our and record margins,

almost us the important for amazing recompete during Additionally, thank contracts. phased like in employees we successfully year. $X.X their and our of schedule helping I'd milestones reach want and of billion to contributions several our all X,XXX,

SENTEL, the backlog additional new acquisition with all an business robust enhanced XXXX, via opportunities. we organization, capabilities to talent at of levels in billion, and announced credit expanded facility, January an of the Turning $X.X

as enhance talent tax solid investing business Cuts Jobs to the us reform passage the improve known continue a drive and Act our of of will to in infrastructure which our foundation growth, and base have the business. Tax also allow We from foundational the grow. Furthermore, to

fourth $ Now year year-over-year was up million quarter highlights. quarter million and and I'd third quarter Revenue discuss from $XXX $XX to the XXXX. for financial X million, fourth of the like XXXX our full sequentially

benefit Our in reform Adjusted billion year-over-year X.X % growth the particularly the last year-over-year of of act the with FX the contributed per increased XXXX, year basis $X.XX. points million for is which revenue margin notable year-over-year. was excluding Revenue quarter X% from increased tax contract million reoccur down not considering year. fourth to when did $XX quarter. $XX Operating $X.XX share XX associated this full dollars, to $X.XXX diluted earnings the Kuwait

have with a in Our generally could year-over-year phased more associated team of to job million FX remarkable resulted imperatives, $XX decrease programs. successful $XXX than offsetting associated Kuwait dollars margin reduction which implement a our billion contract pressure. and to continue and new XXXX, recompete contract with we in in of strategic wins $X.X Afghanistan and million invest all partially did In

cash for our continues recent team flow net $XX by margin operating be generate and legislation. established of tax were first excluding XXXX, XXXX, infrastructure guidance; In strong million our execution our converged with to tax improvement the business margin diluted year-over-year the $X.XX this I'll market. later strong strategy. associated million, and increased the In regard as the expect to provided our However, X.X%. reform of further the by benefit share basis talent to from a view XX exceeding ongoing to expansion we leaders I become the more $X.XX with in Adjusted work at the path to in points the at talk to operating year operating earnings a of $XX hard resulted several our profile and will to commitment We I organization. margin $XX cash per improving activity milestone detail which strengthened million our in key new enhanced strategy all in added to our the level and leader strategy presentation. reform.

our During growth several under leading of we allows of revolver new million and credit our $XX a our up plan. $X.X to of on our $XXX increased backlog closed revenue XXXX flexibility that year-over-year XXXX billion, future quarter, propel backlog which If significant from amount A expanded the fourth is new and X.Xx our midpoint. a is awards funding secured successfully indicator million. XX% for available which in we support revenue and facility and represents facility the

Our backlog recent contribution any acquisition or the SENTEL including win. is X.X not from DFAC of Kuwait currently contract the

This client's a successfully large contract across long approximately billion. transition During several phased multiple term seamlessly complex our the anywhere world mission. is ability of of the testament support and in Please Slide at turn to a in year we Vectrus' $X.X located contract globe valued operate of and in country the X.

client Slide now AFCAP a differentiated I support mission. the momentum II, of Our air Thule, of you represent our Vectrus years. has Support and revenue by logistics market page, Services that The can air progress great help their provide At trusted is that force secure wins base our expand in visibility and revenue or total over force air several the of see highlight the years. value of award $X.X billion support to the Range over been and offering in with top with recent made able wins several force. significant these and solutions the to and facility provided recent of countries. in eight some X. spans Maxwell, Keesler II We the we've on next contract team am added pleased potential share this RSS

successfully range compete. provides Firm-Fixed contract performance the contract IT Price US and our Additionally, responsibility. retained of total a client $XXX period has make areas of great after and million services of extend our maintenance to Europe Europe, US including value command OPMAS-E and full XXXX. - through to army supply US January a option operations, Command we The we the continue the of of and with for or European a army OPMAS-E stride

to that representative through base. pleased contracts Importantly, we contracts, am our we of IT and the and network fourth continue were announce portfolio of countries and throughout XX are Asia. awarded that how to around Vectrus services two Southwest Western communication are with clients army in quarter, in Europe provide I growing US our subsequent new the to spanning

DoD was Kuwait the and facilities position the services dining DFAC leading com Kuwait year area X.X million facilities contract, which in first $XXX responsibility. of or five to logistics further provider award and The Vectrus of same as the

second while Qatar, Slide turn digital is the billion physical smaller missions Please Vectrus. revenue of example Electronic The facility all Surveillance recent win aspect value, In X. our stream for and Maintenance total, logistics which awards is to perfect a how of Integrated these contract long-term of of System are IESS converging. in in or the $X.X equate and client to

our the page, portfolio. these at see, the top diversify are of side to starting wins can left you As

in XXXX, Our up XX% percentage in force the of to revenue with XX% XXXX. from air increased

midpoint air II, AFCAP. contribution the Thule, from at For expect due to full to XXXX, RRS about that will XX% Keesler and increase we force year the of revenue

our ability in contracts. client is over more One further to contracts price will margins Additionally, SENTEL a type from diversification to improve component cost improve time XXXX. of shift our fixed plus

our so type is to While on contract a are contracts clients. contracts plus cost plus governed low, the by is and cost Margins under rest margin. defined

our potential apply under we performance fixed techniques. fixed outcome the XX%. and that increased the level to fixed Vectrus. clients principles point However, higher better two contract under are to the can essence, risk for contracts, our margins They and government performance depending contract, and In improvement of on margins contractor percentage XXXX, allow be operating for and achieved. of technology generate mix year-over-year priced to price shift from higher priced the for continuous the the also In potential

described, migrating contract price as are recent is fixed fixed to the I on a value just structure, billion XX% their We matter and $X.X contract approximately wins fact of more seeing of price. more of

performed to revenue. of XXXX XX% Finally, we contract in prime a with

favorable mix with We significant for interaction clients. and allow sub a our engagement a which have prime contractor

to trusted partner, inorganic a As aspects of to of to respond that new clients' facility better opportunities our growth strategy. all direct organic our Slide missions. and this Please turn and and credit predict to aligned which interaction recently pursue allows us closed provides flexibility with expanded We've X.

financial to will we and which five in a forward, our position leveraging discuss anticipate year our meet Looking goal moment. strong I’ll flex

Turning to new business.

we over submit our is of billion we is to as $X This And up with last pipeline which fluctuate trend potentially months. the to pursue. favorably $X Our plan quarter prospect reported next and continues from billion evolves. identified number to opportunities XX almost expected

also LOGCAP submitted SENTEL. activity. DFAC services base on up security We to our $X or provide competitions. approximately update contract to does operations billion civil Kuwait And not quarter $XXX increased pending is I'd Kuwait augmentation have and $X the award X an logistics we X.X program contract that any V which proposal include associated billion million It understand last the to due from important value is with move V and as support the K-BOSSS, known recent LOGCAP win. now like

order incorporated operating has into K-BOSSS XX% XX. K-BOSSS contract LOGCAP to our extension V XXXX, relates K-BOSSS Currently, competition. revenue. a K-BOSSS, of it period base March our of the the $XXX has under performance As an contract of which as task a through client In current million, or contributed our is

extension includes the two Additionally, option periods.

first the by through would being The nine We the nine if period first receiving extend which three anticipate exercised XX. months period of second March option client performance months months being soon. the award and

They We intents competition, In to and six our operations. experience, multi to support delivery proposal LOGCAP believe the of V supported award providing an make definite a the week. responsive in demand quantity this four offers IDIQ a our seven of we awards of flexible unique and extensive be XXXX. over definite to and quarter of in a contract expected are our mission solution government years that submitted up client terms or by and differentiated client's proposal

steer our the US Afghanistan. well ability rapidly LOGCAP client's of DoD the under to IV across Our environment. its combat anywhere command performing V acquisition published will noting operational current has we Vectrus or service to LOGCAP contractor and Each worth This known also SOUTHCOM] sub respond challenging awarded and to under V meet is army program. at and that in excess and and mission in is to be capability It strongly plan Vectrus of $X the NORTHCOM, for supports each requirements. a elements. are world army with generating is includes combined the two ongoing [COGLAG] familiar the revenue V aligned our or requirements in emerging in extremely environment client's LOGCAP LOGCAP AFTERCOM, award of mission contingency support significant requirement indicated aligned SENDCOM, consist command DoDCOM. the a ASCC [UCOM, operations will separately the contract PAYCOM, billion

the be [shut logistic ASCC is support The for year XX DoDCOM. theatre]. order a This and first contract the will task for for planning

award is company that the which second [shut year a five The performance XX ASCC. won theatre] order K-BOSSS year of in task five The orders also task receive the will awarded order has the will the year be task several.

performance be task company the At ASCC. LOGCAP the to Vectrus contract, SENDCOM, awarded to [shut five initial order win contractor. retain theatre] end order awarded of K-BOSSS the wins to we K-BOSSS award. to initially period, for will the all is the task to year would the In V the have among example, be all competed expected SENDCOM, orders For that

positioned task order, well As LOGCAP we believe task general Vectrus the to order. largest is incumbent V for the and SENDCOM and in the win SENDCOM both

facilities recent enhances Additionally, US to further US X.X army position leading provider the of the our in the operate starting US in airport of facility as and all to our army win DFAC the area services responsibility. and logistics Kuwait, Kuwait SENDCOM

with LOGCAP the K-BOSSS. any order to associated assist V than offsetting going reduction and other SENDCOM, partially associated task revenue if would However, win award Vectrus

to is significant growth business. see promising we and in our outlook opportunities Our continue for

are guidance for result, XXXX we issuing calls at range. a the midpoint growth of As XX% in which our revenue

to to is the find from note While is SENTEL we important also revenue expected XX% organically, our to is helping to at it also contribute to existing come midpoint growth, contracts. that grow

X.X% year-over-year expand to points be associated cost XX operating expected are X.X% improvement excluding the are to with anticipated further Our represents SENTEL at transaction a to margins This and midpoint. in range. basis

management to area communications the won company opportunity intelligence acquisition $XXX spend contractor clients. Finally, fast coveted and its advanced IT clients a XXXX. service the and federal capabilities X. and XXXX augment services. and SENTEL we worldwide services on component aviation of increase per providing service. expect on XXXX, see largest the and logistics and for central The services of line --, airport government approximately next tone community chain discuss to SENTEL contract client June business services what SENTEL capabilities, to They intelligence a tremendous to and and our and January new our in won deployment In engineering mission and logistics contract midpoint facilities solutions diluted turn largest current maintenance, unique has evolution the with is intelligence interfering systems. business navy, is of milestone the bring network history is revenue its with major SENTEL does. The the in task three the logistic engineering SENTEL XX% order a client complementary support XXXX, be IRS develop SENTEL administration as XXX% among is few system on our provide had million support management, support. in performance. detection legacy logistics things. logistics They earnings component from footprint. Vectrus were IT our This supply and prime the various marks community, extends supply valued with the talented experience we $X.XX. our support rapid army, highly focused to of is SENTEL as and to IT. without and SENTEL capabilities spectrum largest presence accelerator his include SENTEL aircrafts operates IT secured focuses business share In logistics was intelligence engineering, additional support brings including ships support. transportation transmission for army is network solutions solution focus their XXXX. for it's which is that at engineers logistics the center design other the other and mission the the currently areas. the XX, solutions like facilities at our that FA, mature provide at the We serves ensuring will and and and combined in assist operated external minutes system, Navy, in to developing derive strategic SENTEL revenue integration, to a and and into have the They mission software late engage and management to from I'd developer Please solutions. can readiness SENTEL its founded Slide third of The major and performance closed the as acquisition that business. contracted engineering a intelligent core provide and of technology equipment global revenue contributor of and which sources. this have and internal while February significant with company and

footprint army’s awarded services support sourcing with believe the a mission tenure, there The in and to based requirements. access infrastructure for CX supply also a legacy With for We this Enhance we’ll are our SENTEL’s provides there to the systems, I’d client's see SENTEL’s convergence leader Slide SENTEL executing it feeling has strategic in of engineering a the services well client expect three XXXX communication core that be convergence. more ISR to offer to beyond, In our to spectrum incorporate digital our physical advancing a as strategy XXXX. our that market services. accelerating global to RSXIDIQ network $XX technical several combined And services. or tactical and and execute expand in to continue IDIQ management imperative. professional strong portfolio over in engineering progress to solution like XXXX our within as a capabilities systems, opportunity strategic converged knowledge which networks new year our program note and created and the provide become believe leverage past leader sensor background chains. the value, great we IT with and billion X; government plan. was strong to great made opportunities is we protection last strategies. has turn add responsive in of foundation, strategic in infrastructure May varied and and We mile Please

capabilities new channel growth markets. aggressively adjacent to drive and and Enhanced and additional shareholder explore increase will value. We

to margins goal, expansion repeatable strategies revenue is management organic known into into repeatable a strategic, and improvement plan Enterprise EBITDA and combination established grow our enterprise Growing Vectrus markets Enterprise drive to of performance of This and aggressive as forward we revenue facilities plan while fully to X%. current this existing activities. year initiatives expanding goal billion have current solutions. system logistics we Vectrus that growth new path Specifically, about deploying more plan include us footprint five markets, clearly using offerings, We technology expand to in $X.X Matt to momentarily. point core Vectrus. inorganic a talk under see achieve to to creating will our growth wide, and and to organic and but purposeful the the margin an

and providing purposeful And physical force help multiplier in We on and as also the and quarters. innovator for the roadmap of our infrastructure prudent client's digital convergence that will become serve plan forward to over to differentiate leader to chain. detail and inorganic we look Vectrus further and us our further engage activities a and supply coming

results Matt, questions. Then to call he we’ll will for the discuss over to Now turn our call go financial guidance. open I’d XXXX like and the through

Matt Klein

X. three the to compared as the revenue or for third X.X% discussing In XXXX. million December quarter Today, Good from was of quarter to million our be million, XXXX. results of XXXX, Thank up ended everyone. financial months of fourth XX, XXXX. afternoon, you, fourth up Please I’ll Chuck. and $XX.X year Slide sequentially And quarter the turn $X.X $XXX.X the

million, fourth income XXXX, cost. fourth the of revenue $XX.X of Kuwait, quarter a X.X% due of increased XXXX, to fourth contributed Afghanistan margin decrease $XX.X of Operating to X% of million partially from $XX XX.X% for programs. the quarter fourth the quarter Middle $XX.X Namely For US $X.X XXXX. programs, of compared fourth programs. million of primarily million from to And from in the FX million was fourth was XXXX decrease compared quarter Kuwait European offset by million FX XXXX or quarter $X.X programs, increase from East the million an the for Operating XXXX. in of SG&A operating in the margin quarter $XX

due was fourth compared on credit a XXXX. was income Net December of The differed period to recorded the or expense fees quarter in the of in higher to million is including differed Adjusted performance, financing same previous adjustments XXXX. the impact change XXXX. due a $X.X legislation the in to interest impact are $X.X $X tax of million The was tax the quarter of favorable in cumulative the favorable of in to compared our adjusted $X.XX During Diluted XXXX, new $X.XX quarter fourth to than was share per fourth the of excluding in XXXX quarter the prior the direct net of for to income we in balance. from contract XX, lower $X.X There factors per is tax for earnings drive that fourth increase were million quarter the quarter of due same many by share compared earnings rate. operating million. net income of $XX.X to of The increase impacted $X.X reform of share of related million million up were diluted fourth fourth unamortized XX% and XXXX. million operating contracts. to modifications XXXX. million share expense XX% compared for income XXXX. expense interest XXXX quarter an of adjusted quarter tax of rate increase income tax higher current this for The can negative XXXX income the Interest and lower primarily expense. per the expense $X.X of debt to the adjusted to million to diluted impact the compared contract the revaluating are liabilities in fourth be by reform business. increase decreased Adjusted earnings by of guidance income $XX.X of successful excluding offset result $XXX,XXX in partially part diluted And extensions the normal favorably tax the approximately this reality. fourth Net earnings period $X.XX. positive contemplates net Cumulative of $X.X XXXX or the the our in quarter agreement, was adjustments catch per same period was ended

as financial was the million year Now X.X% million primarily East The of by I’d like revenue a Revenue Middle Kuwait year-over-year. $XX million. in of for ended a of the decrease compared to $XX.X side on programs the results XXXX. driven decrease FX slide X. decreased discuss reflected December or hand $XXX was $X,XXX to right XXXX XX, million,

a or compared revenue was favorable XXXX to as Net was favorably year European effective of operating US programs million. earnings $X.XX Operating XXXX and by Full by million our Additionally, share Diluted income excluding increase reform to $XX.X was of XX, share for lower diluted expense a $XX.X were per million. partially And was offset for share the of down Adjusted is of million income change XXXX. XXXX. decrease by tax for XXXX by in earnings for per cumulative $X.XX the which adjustments to million is was period year by was $X.X operating due Net we our the in $X.X lower of XXXX per million to lower income reform. the compared due income the full ended was in provided revenue, income operating $X.X to reform excluding $XX.X XXXX compared million XXXX. tax a million and the $XX.X activity net income December witnessed diluted million is compared same income same costs. operating XXXX $XX.X X.X% partially percentage performance. ended year to million respectively. December in to when rate, slower to of SG&A in the an associated $XX.X $X.XX. of period for line million income This million XX, for to of Net for lower the tax impacted $XX.X X.X% compared same with the activities period programs in million XXXX. million which $X.X net XXXX. net was historical adjusted The benefit of was to programs compared period $X.X benefit lower Afghanistan with same cash tax were due $XX.X cash $XX.X conversion XXXX. $XX.X to year compared million, million. The partially from in offset interest the and were X.X% offset Adjusted Year-to-date, increase XXX% $X million, of earnings impact $XX.X a

continued strengthened outstanding as cash to reform. XX to XXXX. to Day more business XXXX, was which days significant XX of generate Our is days in sales even tax flow compared due

$X.X backlog occurred with of of X.XXx. our debt these backlog this debt was end, XXXX XXXX, for acquisition funded $XX and acquisition EBITDA their with ended continue new Slide to for zero XXXX. quarter backlog funded contract DFAC represents XXXX. SENTEL multi-year January in on in we discuss quantity the and unfunded funded XX, delivery We US potential and and Slide subsequent of cash I and to and which to to SENTEL $XXX numbers. not and orders contracts sold closed was is exercise fourth in The awarded Total XXXX on was when to XXXX. credit after XX, are cash backlog teams contracts. protest. Please the thank the XXXX period with is both aggressive where contracts newly net Total and I total prize And We in under includes contracts performance options of ratio sub quarter our Total or backlog million turn therefore approximately excludes potential the our excludes acquisition representative and to contractor effort. indefinite the guidance awarded orders Out was extraordinary prime the under like year discretion Kuwait at and right expanded assumptions. hand, option million. fourth of and multi-year captured The of collections will the is X.X to focus indefinite contracts backlog performance firm billion which we’re government, Please under turn the facility. contractor.

guidance XXXX and of includes recent estimates related SENTEL to purchase cost. the Our associated transaction

of $X.XXX in of revenue the expect range to a we the of with XXXX, For this million at billion $X.XXX the acquisition to midpoint. billion, $XXX be midpoint $X.XX billion, includes from revenue

growth related XXXX At the compared of revenue SENTEL from of organic the to is X% million the contribute partially incrementally offset FX, X%, revenue a and midpoint and to the of to another $XX pricing decline Operating business new to margin This related is million. declines new million $XXX midpoint contract be our revenue revenue guidance our growth $XXX the anticipated at expected in year existing Recent come recompete guidance. our SENTEL, billion is to by is XXXX contribute million $XXX expected $XX acquisition at X.X% in be million. standard. guidance changes, X.X%. wins recompete. midpoint with X% new to from to of come approximately expected change related And to $X.XX recognition is Excluding midpoint of contracts. expected of of one-time a full includes to to business for and XX% range expected revenue closures the is contract

costs approximately with includes midpoint acquisition. XXXX $X SENTEL our million associated estimated transaction Importantly, of

Vectrus to our improvement our to the and margin as the of is the performance range Excluding from Vectrus. expected management margin come system one-time X.X%. enterprise of is operating Part X.X% known XXXX cost, our improvement advancement imperative Enterprise

processes well and way structure new The organization support efficient share empowered operationalizing way. teams. responsible our more and supports to our measurements innovate in collaborative and on transformation standard organization accountability We’re to enterprise the a across to

to will of offers margin Springs We will $X adjacent expected Colorado slight be benefit in completed amenities. facility realized to allows offer which relocation see God’s The new modern, seeks workplace. friendly in many which savings facility high employees partially talents what The Springs. will also transition the headquarters today’s XXXX. tech an location Headquarters The The annual from the will of garden the location million, in new Colorado yield is to immediately our relocation is cost us a a August. our be parking of to top a which

We are be regulation $XX in incremental our growth including million from truly approximately requirements, be With plans million, organization tax support the The decided out infrastructure. of we Capital in and refresh. inclusive income to will million to $X.XX. range of support organization the midpoint investments. expected million be $X.XX in Diluted associated for share in excited intelligence to and range aggressive for Net of earnings future, of to which upgrade extremely expected significant $XX.X per the to additional $XX.X million diluted $XX performance, strong are million. the outstanding. have new range of per for average and further contract to estimated operating in $X is build million tax $X.XX, includes to to be with diluted an diluted range shares activities is million expenditures the assumes $X by earnings expected mission $X weighted cash XXXX $XX.X EPS, XXXX equipped benefit income share the of our in the net invest would reform. provided normal

percentile upon may forecasted at advisory million. relocation to amortization our XX% be headquarters change tax includes an investments allocation. software payments is XXXX, $X the the $X.X to and for debt currently be million. in our infrastructure. for price mandatory is estimate completion which required Enterprise full we Interest of XXXX and chain are purchase supply service XXXX. infrastructure expense expected in that expected estimate $X.X million First of and And rate year a Depreciation

for call Now over turn I’d to questions. like the

Operator

Brian [Operator LLC. question. Our with Instructions] Ruttenbur, proceed Drexel first from your comes Hamilton question Please

Brian Ruttenbur

to due quarter in wins good fourth that looks Congratulations, Yes but less anything and seasonal large of is the that it than like there very couple looked just questions, third quick X, just so book-to-bill because book-to-bill, was down a was like it year. period, was in the it was correct?

Matt Klein

remember the third Matt, doing? had book-to-bill correct you’re for we was $XXX fourth annual pretty were we book-to-bill, our it’s at you in Brian, significant was quarter but down, quarter million You’re billion. bookings a how which the Hi $X.X

the billion. all $X.X of So wins remarks at Chuck discussed his contributed prepared that in

new was and then million X.X add-ons. wins of contract another $XXX So

we overall, bookings. had year think an So, our I outstanding

differently that Some out over quarters. course the year of kind in the different of of plays

Brian Ruttenbur

else bit of Okay. the company more but for And expect acquisition, near here we we of more in should investing cash, then little there, the should in term. a terms is you’re what use in looking be

Chuck Prow

SENTEL the on We, to you, here in focus integrating early we are Thank Brian. going year.

we continue As our invest hardening mentioned, in infrastructure, advancing to going you we but in fully to expect are strategy. to our invest

wouldn’t I see the in of half sorts year. So first this of expect to activities any acquisitive

regard with to to for We to prudent are make potential we grow. how monitoring aggressively And continue cash our of decisions future. pipeline utilize the acquisition

Brian Ruttenbur

Okay.

terms So to more the assuming this and would XXXX, in acquisitions cash XXXX? the Matt debt is then the of in year plan by be what end have plan of no

Matt Klein

would paid believe of whole the acquisition; that we end we believe the The be third SENTEL quarter. the -- for acquisition by related to

the of K cash If we at know hand. which just we on I you read $XX posted, the ended year million

cash to we us different this in that slight revolver, so behind on a hand all year. be the will So use

fourth about had Mandatory at $XX the $XX quarter. we $X debt at we million in mandatory million XXXX. So million will million year the payments then million ended debt. less of be of this on of We year just we’re the about facility in the end payments just $XX talking find $X

Chuck Prow

didn’t of clarification I expect one wouldn’t too, we year. for indicate that this source just of but any not acquisitive additional activities for just the first half And XXXX probably

Brian Ruttenbur

more that that just assuming so I’m it’s out are XXXX, for Okay model going there assumption acquisitions because hard to make in me no to acquisitions.

something or You with cash of debt that is no roughly that $XX correct in should ballpark end year and million Matt? the

Matt Klein

million No it we’ll and our balance the that of we $XX have should I for think yes; plenty no debt, normal have had reversed. cash, cash

Brian Ruttenbur

of months, re-bid Yes, you it’s another K-BOSSS extension my on nine sorry question final of perfect, with actual of is an update company, those V, expect what or so then -- about LOGCAP and LOGCAP be are still that out, the do into going the was that multi-tasking not V the see a it to to or re-bid award that, to K-BOSSS with but fall come the in fall that get is LOGCAP going the V all we’re it rolling expect an you out. with pushed

Chuck Prow

second plan however the I we had that The the we anything we as to an take confident the anticipate year be would submitted current which through of the well. plan, know January next don’t that award week we in now that to to option us would would month highly have is fall; year. bid discussed the I that three March contrary. second right three current So actually. had, this option

of that Now other the really it’s depending than the on timing acquisition process.

Matt Klein

as as year have we should move more through We clarity well. this

quarters the we’ll XXXX. so transpire And report as in

Operator

question. question comes Klieve, next NOBLE Financial. from Our proceed your Ben Please with

Ben Klieve

you. Thank

end guided status start for for the questions question liability for rate XXXX first how So with And you has curious differed and taxes this regarding changed, XXXX we exciting the that to? beyond to one-time, here. first solid you XX% guys, impacted at one-time congrats on how a year tax your pretty tax this tax Few at of cash specifically can look relative adjustments. law

Matt Klein

sure. Sure,

then with we’re spin. to that to our goodwill really And made the tax up had allowed the to other books chunk large two the of do So on liability components, unbilled the from historically. differed with do one is large that's differ had receivables the

that has changed we’ll of so a the the differed of kind What and benefit on net $XX able There longer income do So million re-valued in that differed of receivables. tax be in plans, quarter is or XX% received we phase the years. five reflected over full unbilled out fourth and a balance in to whole no is year. that at tax it liability has so we’ll been next

cash very changes our little. tax impact so And

taxes three the unbilled in tax the bit in the years, last or change really of expect a So the until we paid next law. the effectively. little to cash that actually of I couple years portion change in two more don’t get we we this, to very managed that

Ben Klieve

the regarding you about portfolio outside talked of acquisition, the standpoint? couple perfect. like XXXX, does SENTEL recompete a questions through Okay, Bragg], [Fort the of this look running from Then what

Chuck Prow

the this have contract IRS several, is with tips with on for the There exposure or exposure the They that, that three we we’re that. Their award, contract. recompete real of they one rest was versus XXXX won in year the that a for just pleased the contract year pleased minimal was so year of got news so-- SENTEL

Ben Klieve

guess they acquisition know, trying you can pretty talk be a And it’s them? been SENTEL’s they their gasoline development business understand or the you development of a I about you am I a juice up in or business take been They, did business Okay. know, pre-acquisitions? really what their to they the to off have aggressive are bit before development efforts? kind going able to, there, up job efforts, have foot doing is, you solid acquired their you

Chuck Prow

will if pleased very the in go-to-market SENTEL. the with you been I’ve intensity, activities

small and and to I activities, SENTEL go-to-market very I’m around SENTEL’s leveraging go-to-market to infrastructure most the of really with our with With I are up. see robust look more shaping process forward very businesses As pleased with regard the activities. how relationships, so And client opportunistic. activities they

Ben Klieve

the very other related expenses was into acquisition there expenses And quarter? fell of expecting the thank fourth that you. you’re XXXX, million $X just Okay, good, one minor any that question acquisition in here,

Matt Klein

to can next of quarter kind can And we couple as of incurred the might should in $XXX,XXX I XXXX. And very most would be we fourth we that of quite few couple honestly the conservative; quarters. that see those in think come were the $X appropriately. but manage in There million down of move

Operator

your with Joe Please comes question Stifel. next with question. proceed Our DeNardi from

John Larkin

John Hey guys, full [Larkin] quarter and Great for year. this is Joe.

First seek question of of work thoughts especially guys the commoditized tax this the you I the at competing lower impact on of tax your the away reform of margins. gains end? have type kind more your Do given rate, on is nature peers from

Matt Klein

what you a we’re very really stock That a similar in to back how buying John are no a margin doing lot, potentially in or business reinvestment Matt; business. whole that I to as be expect change reinvesting doing? I can would employees, businesses. rewarding expect their It’s Hey, into don’t either fundamentals. company low the we

we’re So tax talking thin as as out But already I to in you’ve perform are potentially at bid, into margins. got far pretty play the that's pricing margins think discount see government way the space. services the

So much it is not room there.

John Larkin

get Or change the it’s they am that RFP’s, terms the your extra hearing few fundamental they that of plans? extra will Is work balanced-budget going to with in And they probably staying your coming few I looking are kind And are maybe at going customers of curious bring base, just the that just at came tweaking to change that get, really And way. dollars approaching V, their I’m easily Then LOGCAP kind from kind work? hear given changing been way that in things. weeks to are how terms market? looking to--and of they their are a dollar how of they back they’re could incrementally that of customer of kind agreement Okay. you a past that see in out. what

Chuck Prow

over going the budgets stability, an talking and Hey, given had hearing about the budget -term mission. is industry last years, had hasn't into to clients in clients so future. where much to although and more That we’re really actually our the certain their were looking materialize operations long now, been vision future improve we have long investments their a of making term our their we’ve as several how

clients of the their really move this we step physical converging level positive believe toward next will the be in having and which of see digital So to our as case operational infrastructures. efficiencies I our a

John Larkin

run Just a lastly, contract is that is the rate? now full Force support Air service Range

Chuck Prow

a It’s full in this is. It quarter. run rate

subcontractor our beyond. support remarks that we on the the positive prepared eight type we’re engagement. And we in are to made particular business really a that model that XXXX and now that the provider, fact you a As the very again know providing countries point in scaled air in both is force change that for

Operator

and question of end gentlemen, we the the session. reached answer and have Ladies

I to for call closing would to Prow like the Chuck Now back turn remarks.

Chuck Prow

who proceeds. much. very attended as to forward I want the very Thank thank updating look support you our for progress the to today. your call. year Thanks you And on much we all you

Operator

conference. concludes This today’s

disconnect your time. may lines your Thank this participation. You at you for

V2X (VVX) 2 Mar 182017 Q4 Earnings call transcript