VEC - Earnings call transcript Q1 2022

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Operator

Thank you for joining us for the Vectrus First Quarter 2022 Earnings Conference Call and Webcast. Today's call is being recorded. My name is Gary, and I'll be the operator for today's call. [Operator Instructions] And now I'll pass the call over to your host, Mike Smith, Vice President of Treasury, Investor Relations and Corporate Development at Vectrus.

Michael Smith

Thank you. everyone. afternoon, Good Vectrus the XXXX Conference Earnings Welcome First Call. to Quarter

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

presentation a management our materially making contemplated that provisions and forward-looking company to presentation, federal forward-looking securities for safe the press of statements description update materials the laws. cause may factors The to of some from pursuant our of its actual to results today's forward-looking assumes statements. by During review differ no statements will be obligation Please results harbor in harbor statements. the the safe release these

that, share. to and these to operating release and definition addition per to income adjusted will press At non-GAAP time, this like earnings, diluted of we XX-Q. the reporting out materials, can like call I'd EBITDA discussing adjusted and non-GAAP be in metrics, Chuck including I'd over adjusted presentation GAAP Form margin, point be earnings The turn found our Prow. margin, to and measures adjusted net adjusted and in income Additionally,

Charles Prow

you you, on Thank for everyone. Good Mike. the afternoon Thank us joining call today.

across started, XXXX our most growth with DoD's the X. We our demonstrated the Slide agility team's high-profile strong thank get on several all performance continued clients, business. our areas several Please a note of and I of quarter. to we would like to missions their and Before to our started of employees revenue turn commitment and critical supporting during outstanding

as ongoing early million in well the the X% Revenue driven core we operate year-over-year LOGCAP revenue margin was sequentially made support V would and growth quarter, $XX.X quarter high revenue in volumes, have to with world complexion. phases months OPTEMPO generating that through pass-through out efficiencies or by $XXX revenue work of executing EBITDA the our that different grew region growth as which content Adjusted LOGCAP their million. affairs phasing X% from V the we continued provides life as contracts progress our is first coming a in material V, During of in X% implementation. was continued in is X/X LOGCAP amount the to and the programs. approximately a of I for of of in greater program the margin of visibility. substantial point like XX cycle, revenue higher

the tend the in be standard process margins business, enterprise our improve well-established and $X.XX, execute diluted at is our was adjusted beginning and lower $X.XX. generally was to over operating EPS for EPS as the improvement quarter initiatives. As of contract time Vectrus and we

our in to quarter, we Importantly, through which of makes up X% additional INDOPACOM expand continued growth during the now footprint geographic revenue.

We in the expect to the believe performed calls in continued and tasks in for size region, recently major note be similar the XXXX. could budget the region year we which DoD's fiscal exercise another growth XXXX that we in released

within work of Army, wins the recompetes. community new portfolio our intelligence the through solidify and securing Navy expand to continued the also We and and

programs provide With to and to there traditionally that with low-to-mid greater Given is carry guidance higher the end opportunity non-GAAP greater pass-through our drive reiterating events, aforementioned said, the increasing believe guidance, momentum volumes. ramp given our which support results, high We year will full margins. contingency our to range, XXXX year-to-date of are our ranges. and revenue likely at margins at the we new be the in

of the guidance. Given the our to visibility above momentum, adjusted EPS be expected end is low

to In Vertex our and the merger, X. the important later we the call. cover Please needs to to several combine in and our announced supported Finally, missions continued in on turn all-stock clients with March Slide of on will an which requirements. focus first agreement we quarter, X, I

phases of development and the technologies the provide selected complete to ability the of converged which was application demonstrative our is clients. Vectrus for operational first to Coronado to XG quarter, solutions During final Smart Naval Warehouse, Base

XX, Vectrus' first and sites leadership milestone for across the U.S. will DoD April client Things ribbon-cutting for radio Internet map help and this increased Vectrus focused our technology DoD. of a its one is The low the was This attended ceremony and warehouse. is Coronado the of of on of warehouse on operations Importantly, Military, and to and strategy, a via major which latency. clients throughput as XG deployment network test and XG access development demonstration the data, of demonstration optimization

on In ahead we operational demonstrated full and recently pandemic. of a centers. we fully schedule. Kwajalein months and significant phasing are providing approximately given Kwajalein travel challenges stores LOGCAP the faced became quickly X,XXX X.X the our extreme The of and retail partners addition, ability of spectrum schools, commissaries, including accomplishment as This V services, and that of a logistical result transition was operating now involved of Vectrus to community over employees

performance health expanded with environmental clients services pursue in O&M the Several and adjacent island. our support, being We to of the to opportunities providing facility the also functions offerings management, care, are core provided future. across are IT and will provide transportation additive and path

period following Logistics of leverage the process-oriented at phase-in our fully XXXX at Center December time, award. and, our million a Readiness $XXX operational Fort became also short We in systems Benning

services of and providing Army's training U.S. world-class look next and are maintenance, X forward supply maneuver to center this over the transportation We achievement for the proud years.

by granular establishment and to accomplished flush critical a water remediation the again our system contingency tirelessly by supply I operation. was worked activation and demonstrated team over with on water first of effort in that utilized to Vectrus' have Hawaii. carbon were water This assisting the response During points. quarter, capabilities who rapid teams global units distribution DoD XXX the using thank want this our

strategically Europe part Force the of task a was initiative. quarter, deterrence Additionally, European order awarded to the Air for Vectrus support important late as in in provide the U.S. first

small positioned additional and our Slide wins. to exemplifies client clients' us While and of and our a This positioning I vital for effort currently turn and value, in to Air response challenging most supporting contingency in our Please will some missions. rapid where X contract critical it's capabilities well services Europe providing effort mission-critical global Force support. notable discuss

our Our demonstrate positive growth-related lay to continued momentum. helped revenue our experience groundwork campaign to success growth recent activities continue for wins have diversify Several and the portfolio. in

work compatibility continuing and the our award helps The recently are the million over with positive contract valued $XX that operate electromagnetic systems fleet our all the spectrum and maintaining a for interference. dominance. at solving or challenges years. a follow-on Vectrus ensures working afloat interference we're We on Management awarded while an in for X that can Spectrum without traction Navy, equipment continued Navy ship aircraft and components, platforms,

Our to of tool. support Spectrum back development program original and XXXX the for Management this dates

effort instrumentation. electromagnetic an engineering continue interference also performing and subcontractor on and test airframes won We a evaluation the mitigation aircraft electromagnetic as to of that supports

the support IP awarded our retrofit the continue solutions computer embarkable worked its that to a the include our and diligently These forces more integrated operational for the past technology converged And and and during and awards were integration several commitment years of Vectrus we capabilities IDIQ intelligence the demonstrate that Vectrus enhance that wins of X-year deployment our successful support technologies environment. were systems presence cyber key a and in several that and coalition suite will to prototyping wins comprehensive expand in on existing insertion securing engineering of in new has to numerous and systems. These footprint. focus integrated IT our teams in hardening, and quarter, million community. utilizing joint over intelligence our a position $XXX and platforms physical services integrated assets, community. security protect capabilities. of systems Navy, systems on first worldwide, Finally, vehicle the rapid provides delivering

Vectrus' Our client execution to first and demonstrative business the expansion footprint. are capability of grow geographic and program our of strengthen and and through quarter outstanding diversification execution, results realization

Chief turn to like for the would call a I of financials. Now Officer, over Susan the Lynch, review to our Financial

Susan Lynch

with everyone. our to quarter me Slide good to afternoon, And X Chuck. results. Thanks, now first Turn discuss

or First XXXX up X.X% was million, quarter $XX million year-on-year. revenue $XXX.X

on to and capability this in was late year Kwajalein solid the Kuwait Our programs last top Iraq operational by and transition line boosted year. growth V LOGCAP full

In the addition, program and benefited associated efforts. contingency Fort and transitioning Benning from response revenue volume with rapid

QX margin the XX.X% profile M&A grow able top income and XX.X% $X.X into enterprise as was effective of and million despite first Adjusted were adds the the lower incurrence than efficiencies EBITDA. year. material of of in believe accounting which effective $XX operating total intangible our X.X% or of and back over now rate expect quarter the of these adjusted that down XXXX. related the we income share XXXX. diluted In Total clients' and primarily average our and U.S. $XX.X X.Xx the of was Please Cash pass-through the significant anticipated million, debt this contracts in to that year. tied Margin in Adjusted million pay $X.X XXXX, prior we time was compared process higher-margin margin of was turn carries net and was to the the quarter was tax of of million quarter EPS the we to amortization content their for Vertex M&A headwinds as by down see operational to due assets was which prior in increase the and $X.XX tax from was of primarily EBITDA to in $XX in in the HHB. costs ratio withdrawal chain change million repayment influenced Afghanistan. of line activities in work. also QX X% initiatives. as on to aforementioned from merger Cash to in debt merger, in merger. cost. adjusted EBITDA quarter X. XXXX we Adjusted $X per XXXX diversify margin. million $XX.X Cash improvement million integration-related compared to improvement EPS, first Importantly, in activities impacted an was was prior the was The approximately Adjusted compared operating to our the increased in used supply and drive $XX.X apply transaction payment margin CARES and of quarter include rate Turn Slide stages $X approximately for by by to Net $X.XX. prior first year. support and will driving of to activities. $X.XX deferrals due The we The early was million first $XX.X contracts was revenue cycle. affected end the income as is a to the million. $XX.X $X.X XXXX million year. the integration was of Operating Act Vectrus acquired amount to over life margin scopes certain change earnings company's an higher Fully in military We The typically in continue the was of compared X. a the to quarter Zenetex million acquisitions are of compared at million or X.Xx, million. $XX.X needs leverage was aggregate, $XXX.X tax time, improve million in QX used on to support from the down Slide treatment

driven the this a quickly as V. revenue part years expecting greater could in are driving same past of the and we've towards guidance visibility activities. QX operating line a into these In expansion past cash revenue is year to business and XXXX our new providing the focus adjusted EPS results, program execution that orders while years order pipeline. the by task Slide campaigns awarded XX. solid provided and EBITDA on Turn associated booked. maintaining adjusted our of and The M&A-related and remains our task our diluted we with efforts our believe been with amount urgent net on for next activities, excluding now continue phase-in are response and $X.X ranges is than reiterating in will are at orders of remains and me the by $X.XX backlog reflecting year we contingency months with period over X% pattern solid full and the in higher revenue, billion, to billion Kwajalein, of rapid Fort guidance XX tracking the Benning, XX nearly is witnessed Vectrus has several and work accelerated with to we year-on-year growth several the X.Xx Our guidance XXXX, remediation We Hawaii X% unique and levels of at revenue. of V of business, end efforts volume the that Revenue and at billion start-up Air remainder the the attribute over for beyond. materialize $X.XX Force to LOGCAP Europe, are high LOGCAP in supporting successful In

the a our we result start-ups significant of guidance of and the be material margin expect adjusted to low complexion of EBITDA content, As to X.X% the of X.X%. wins and and amount pass-through of mid-range to contract in

are adjusted amounts in and activities timing above the the visibility forecasting Due to of our likely or of GAAP for our providing due necessary with Given the momentum, is that not are reconciliation guidance guidance $X.XX to be the quantifying Vertex, $X.XX. low range difficulty EPS we end merger certain a and to to reconciliation. transaction

continue be cash expect we to to turn now Chuck. million payments, provided the $XX Excluding call like by to I'd million. merger operating activities back to integration-related over and $XX.X to net

Charles Prow

Thank Susan. you,

I'd X On announced an we the the XX, update you XXXX, pertaining we more transaction. information meeting of specifics shareholders on Vertex. on special issued which merger to with provides with to the give the Now like April March proxy

with investor contains filed supplemental much proxy. Vertex, the that information was we regarding Additionally, contained in briefing of which the with merger a today, SEC the

business attribute and $XX proud The million, we the The and and combined greater margin important significant value formal clients. of disclosed you for more a call, Vertex EBITDA to of of guidance the Slide history in of an includes the to for Vertex's a and deeper visibility on creation which plan revenue We are of diversified opportunities XX. our to combined provides the briefing. backlog. approximately and EBITDA $XXX international billion adjusted Inclusive service business than our of defense, This Slide investor Please after issue broader $X.X people of X%. Vectrus Atlantic be this many leading $XXX global civilian the several a merger previously being Navy win, security, to adjusted essential as remainder benefits guidance. contained the combination company Please this the million contracts recent synergies. creates slides There technology provider cover clients differentiator. that slide. and combined and combination, Federal XX. equates capabilities will have rate shareholders, million Pro over the going to This $XX of mission opportunity greater of closes. For identified company. stronger, and to The to company will for national not and combination the construed combined know forma which of this Test are a a is turn run XXXX should XXXX Vectrus solutions and back of billion several ITT. XXXX an Wing Electric turn is was has Many to at Corporation, which arm in long-term

eventually back Beech Raytheon a has and company Vertex by the was in Vertex that of later in acquired noting solutions which The known XXXX, aircraft worth creating Services, the is XXXX, business the XX-plus purchased AIP in until from technology and In company. as Raytheon, by today XXXX. to what was also formed year was Aerospace XXXX. being ultimately training originally Vertex business founded LX by December acquired Vertex is from it Beech However, that legacy stemming

key XX. professionalism. and and and As history also can Vectrus turn to culture mission built be respect, a page value-based and a experience shared integrity, have on responsibility share but on Please Slide is the that Vertex principles seen decades of and client-focused the of

this approaching a its of and complementary turn Vertex aerospace sensor competitors. agility, and leader locations legacy With deployment Aerospace capability across is Please how key sustainment, capability-rich approximately its been the modernization company XX. Vertex support. mentioned, are. page and that mission Services, $X.X XXX Defense a to market Vertex portfolio and from engineering defense Key and shows markets. over and adjusted Slide client XX%, table include and integration solutions, operating in Vertex' in The optimization and globe. the a in EBITDA Vertex spans billion Vectrus capabilities exactly rapid platform and long margins the has on As and revenue distinguishing have training logistics, of components

and company's be solutions better see of combination logistics, combined truly across the and Please can and portfolio opportunities operations the benefits the seen, to comprehensive and We enduring technologies unique meaningful are capabilities revenue to aerospace, synergies set strategic support the full As provide XX. life to missions. significant. services cycle and a critical capabilities leverage creates markets. technology Slide to with of training turn The associated

However, the also diversification benefits are combination of the material.

see side will page, the of the much a of right-hand geographic you footprint. expanded contract As and clients types combined portfolio on an have balanced can across the business more

our only balance added client in market that several portfolio the not cross-selling our moving from concentration Army will with opportunities. to XX% We our also increase XX% to and route new clients but

to new successful revenue. portfolio than economic that line Additionally, much periods and of the cycles. and of will winning various cycle XXX our their through the have are both with provide task a over political with Vectrus life XX% perspective, have the Furthermore, order of we early top contract and estimated helps resiliency in portfolio been recompete of up stages contracts has as make significant improved diversification in performance contracts overall no remaining. Vertex notable more From

in wing Force for March, task Command a order April, rotary aircraft. million fixed aircraft Vertex to forces Strike X which to in a performed range announced of provide nuclear X-year wing, conduct test of responsible Wing missions. maintenance new to Vertex evaluation and unmanned with squadrons Strike has example, Global Naval The Command Moreover, X-year global strategic is Force the deterrents million maintenance. contract combat-ready variety Test Air strike new rotary Atlantic provide it Global supported providing $XXX won to For this Air $XXX operations. by and was aircraft contract comprising and a of awarded a The

Vertex this While Vertex total business. to that XX. The strong Wing, billion, the Several under Naval visible X.Xx extend beyond. the that and represented significant the award contracts velocity company including this Please awards turn this to a and for mentioned for is over approximately this $XX Slide is combined resulting is wins demonstrates win momentum combined of Test the backlog equates XXXX with protest, extend table, a companies' of both currently contracts pro XXXX that from on this XXXX. our Vectrus results forma into previously in having revenue. The are beyond many into and table in

comprise Importantly, a XXXX XX% recompete we over forma believe several listed significant the the portion visibility contracts over revenue With of our of behind this substantial the a next page on pro and provides years. well on and we of us the several to believe amount to under new is the grow the further aggressively positioned combined revenue solid opportunities over contract business. company years, next focus addressing

discuss to back like I'd attributes financial the of Susan turn the over of the some to merger. Now call to

Susan Lynch

Slide compelling scale double remains the company of profile Vectrus turn with is improved combined be and financial is compete. to cash where the Please company to Chuck. generation. margins Thanks, ability XX. forma significant approximately today for The pro enhanced to scale, and provides with Revenue expected strong

in of revenue. forma pro low synergies, expected EBITDA of X% the the million EBITDA operate are Vectrus $XX and X.X%. Vertex markedly to would forma expenditures of Vectrus' would capital than both less An Additionally, margin normalized midpoint be the capital exceed XXXX run rate of X%. to pro guidance business of that of requirements We characteristic believe the and margin business. very improve adjusted important is Inclusive from

Please are cash that and aggregate annual rate As also combined are last the attractive over savings estimated attributes XX. yield tax billion in The mentioned savings several effective our company. during attributes lower generate tax turn tax to tax the and there next Slide the for to $X.X we call, XX are $XX years. million cash in

result new revenue for mentioned, a years recompete the growth, companies creation the in As and side strong next provides next won achieve which believe both higher future. business, opportunity shows platform margin our significant to growth. Chuck generation value years. over the potentially high a We visibility solid amount substantial shareholders in with materially and left-hand have The excellent the over of revenue several combination cash will of several for of page the

that CapEx combined $XX generation. EBITDA. and EBITDA target million cash cash adjusted mentioned are cash adjusted to from combined support Capital capability with pro revenue, Slide sector. leverage proxy. is rate anticipated will which transactions the previously the ratio at XXXX flow business included total Vertex totaled tied of million believe This net related business path $XX currently and rate clear scenario. XX. Xx EBITDA. $XX XXXX at EBITDA. of budgets cash in, illustrated looking to partially top While full illustrative additional insertion growth business months Please million The that $XX million be We the strong within costs are is delever and cost. solutions and and Interest adjusted make combined low chain, to can EBITDA savings The XX expenditures includes $XX supply This the other include estimated benefit. is the next automation rate close. out the margin we line rate run leverage are synergies onetime and growth cost note believe through These not We XXXX to awards, and Vectrus synergies Raytheon. synergies savings EBITDA processes, expense includes protests, estimated associated annual powerful revenue from XXXX. substantial of of bridge net phased of in to and technology our of the million see the stock-based turn expected end of achieve X% close. from tax $XX over million. disclosed in approximately the capital in XXXX. walk revenue million fixed ability in anticipate to the and previously fully in of also to forma are at incremental million this illustrative growth in efficiencies, adjusted savings and anticipated timing subject Please believe from of approximately and of are point combination and $XX $XX Page opportunities, through XX. million with to ahead, is like $XXX costs on achieving $XX company the turn the training yield assume forma generation to our margin. does achieved core illustrative Vertex. contract of We when structure not in of X.Xx is comparing $XX achieved mix, relevant leverage run business an combined a of assumes scenario our by conservative factors, to generation cost which that rapidly adjusted operating the in to synergies. merger will taxes $XX includes million of a The I'd requirements, to XXXX Working run to achieved to million, up conjunction tax adjusted is and not capital And XXXX XX% acquisition the compensation anticipates technology this of net approximately based X synergies, million, years pro to the $XX We million of achieve totaled outlined this integration costs. be in capability a Cash synergies included of associated its net Please drive

I'd to call over turn to Now like back Chuck. the

Charles Prow

We leadership Thank more value our you, emerging shareholders market to creating significant greater and with Susan. balanced create merger Please Slide opportunities people. exemplifying converged larger, growth that remain in while for our confident and with further XX. turn Vertex business our the for will differentiated the

with X, announcing intent planning working integration several Vertex of senior to several had In and Myself to required leadership have the leadership. on been meetings transaction. of timing, the March terms merge actions we have with the members team since Vertex the close

on noted our that not eager in complementary, are in unanimous We XX. our quarter Slide and We this cultures close. more together track close as we could feeling to be third transaction to remain post the work are on

the like call to questions. turn to Now open I'd

Operator

[Operator from Capital. Instructions] Our with Joe first question NOBLE Gomes is

Joseph Gomes

So the X.X% revenues I the to were in guide. X% here, quarter have above the first one up X%

the Just lack in of the quarter? wondering, word, with expectations? outperformance a on kind was quarter, the drove top than your line What line that better the, for of in better for expectations,

Charles Prow

a in items, couple as successful to INDOPACOM I Kwajalein the very thanks of of case weeks, by of operational full overperformance. remarks, the that. are and There the identifying Joe, X about date that for the left which a of in moving my were We task noted was portion

actually initially slightly Secondly, scope bit we occurred an than some anticipated. of in that exercise later longer had in Hawaii larger were at the aspects INDOPACOM there a were for a again year year. earlier in the went in that the planned And finally, water effort remediation

Joseph Gomes

couple mentioned some in mature, mean, margin front you've times months is XX XX what the when and, I contracts of X/X of contract. the their months, of it months percent Okay. is first revenues mean first revenues the within of as XX are within we're a of see what of in -- -- of were -- think margin improvement. me, I right months, you better of when Just talked you to start get improvement, margin think lot start Is way should some little that? sense improvement? trying we then the as And of the I that quantify days contracts on a early a to at number, you color you don't XX saying, around or a it have there provide Is point to a I see margin to to than see really improvement. longer it more you should

Charles Prow

the the I every would year say mark contracts. each of at of

option our We're you don't And third clients the way, look would reset you wins have always is or things way is will, teams very first that been from will which some into is some our I we if that year second year see by margin, going a been to of the highly there second tell the a the months, really the fortunate option talk XX that a ramp the the improvement last option of contract. then the again, reposition be year strike And way is cost So fixed again, of X sorry, in have to, price of base very you have what year are And realization the we great situation. to occur. history initially. or work particular could the in then from to year, our could where contracts. thing, having a and year full together of our if get is will pricing which margins to first the portion of get about see base option the lowest similar I fixed that. with a years, X/X orientation. unusual. me more revenue the working price over happen we there, have that type -- that initially work wrong. But like I'm typically It's X over you'll a we'll to those at the the and year year operational where back margin

Joseph Gomes

LOGCAP work that about all through in kind revenue the Can are plays construct? into, now expires here. Iraq, that a million LOGCAP bit $XXX that for come into of first walk that can illustrate K-BOSSS you just us the contract go out? option bulk revenue Or those. it's of you maybe think of Okay. The was And -- on, for a up of X all kind little LOGCAP Kuwait switching August. the XXXX. guys you all flow just year going kind of K-BOSSS contracts will I major Kuwait think, gears LOGCAPs how opportunity forward. how in I K-BOSSS, Does that

Charles Prow

right, Joe. Yes, that's exactly

historical So task. of that into but majority K-BOSSS. the work are K-BOSSS moves there contract about the down LOGCAP. you -- of the as we've to we they talked over continue vast LOGCAP, And the Kuwait time, components are part the K-BOSSS portion as K-BOSSS know, security original wind as specifically The of of under task not

in here task should the the get visible Kuwait anything should Susan, the kind of to standard year, if K-BOSSS that add? of So run then on half very a you second we a to rate, to new be will, everybody. without and

Susan Lynch

on. right million at about $XXX to quarters, you're been last X think I we've No, million. The $XX

think range we're in right that I forward. So going probably

Joseph Gomes

line -- If went obviously, could for turn moment, to through we acquisition a a here. you the time come Vertex

the them? You stakeholders, you Chuck, if expressed being just major so, you your your how your to some your concerns they Or any have by do in shareholders, across filed shareholders? with discussions how proxy. And of about the address come acquisition?

Charles Prow

logic current our had analysts to very conversations after the Yes. clear. the This a investor our is other transformational like profitability merger in and so base margins, announcement, became that logic point industrial the geography, of became Early comfortable increased time the such be with and investors, diversification the we objectives strategic increased yourself, the the clear, as of many becomes clear. those as very acquisition, that of at contracts

strategic general we a benefit to at into had moving the in this is predict I to vote. shareholder look the of that understanding the while I and future, of feel So a the forward taste there acquisition point time,

Joseph Gomes

And maybe more sneak ones can in couple a here. quick I

and $XX $XXX about had you call And Susan, of adjusted synergies million the cost -- EBITDA number. $XX then about of talked to million today, the the the were talking million mentioning million the always I and play then you when you assets. additive does the that the you all $XXX or So Is announced cost the -- Raytheon acquisition you're how more was synergies that out? about from Vertex thinking

Susan Lynch

question. for the Yes. Thanks

that portion Vertex, you small and in beyond XXXX see that to in $XX a numbers of the ramps the that or all of already proxy. the $XXX million XXXX million kind is but and the is specific million then is it it there So in $XXX in

kind tethered you it's already into in that the So plans have of the proxy.

Joseph Gomes

and items that or more two, two ones, attraction a quick Is pretty of one to up that's here lot retention. much In any COVID. And have earnings of And of brought you restrictions obviously, base the employee key may. the or season due left if in years, remained been entire last I has all couple the they're of gone?

Just area. are that guys in wondering faring how you

Charles Prow

I still staffing would bulk realities you the the there us, around imagine. would -- are globe behind the say have is we that like of operational COVID-related pressure but

obviously staffing improve a if would our set now I COVID. not time. COVID attribute again, needs stage tension, will, But to current you only continued So over be to that to

I again root supply out But chain realities and I their operational situations. that say think realities chain supply are operationally, have there those of COVID. would Secondly, would there most in we're behind

Operator

The next question is from Tobey Sommer with Truist Securities.

Tobey Sommer

have have and the With that slides side of do mind on one if one wondering there best revenue has where of the capabilities the And you could the checks in respect isn't on the versus comment was opportunities? where I overlap, to you synergy see merger, the I other you opportunities.

Charles Prow

you, Thank Tobey.

acquisition much, on at do that and capable combined will able Having the our the military we great in call, we and markets, X that that believe I've such already core and been areas very as the markets, clients. markets at capabilities be aspects will federal address, businesses. that, combined see combined do that are well synergies about talked our of in what larger, that where, markets not international this things there our foreign are a just I'd this stated, scale revenue the be of services the see as complementary traditional different several marketplace. within And sales capabilities not to we have say, our the as within all more we make, strongly offering segments our as certain revenue to One dyssynergies we've that because fact occasions on said of we is focused we operational about

expect into through So we we that you about and in fully we do revenue as And where investor the believe general combined as a there operating get company, be we base opportunities. those vote to and strongly the see synergies. will update

Tobey Sommer

from March budget within in in the give a We sense here of we your OPTEMPO maybe that's midmonth then standpoint. major to then a corridor got of a you sort award before the and world Could may perspective. like an of it maybe like in from have clearly that conflict after been us and pure was the responding budgetary a some and customers cadence be and about I'm XQ in what curious as and what far so

Charles Prow

months the I slower first year discussed have, been an very in the OPTEMPO or I are X again but been, perspective, across program us. talked for obviously left bit strong as, prepared moved existing our We activities that the the there reasons. about, of say, contracts say very the actually terms we in bit support. globe that are in in activities with And the of activities for traditionally of quarter in had always particular -- award in the about a base around obvious and from exercise would those a OPTEMPO the occurred in East still the prepared terms Afghanistan. had European Middle contingency the But high INDOPACOM talked have first the should dealing we that remarks, remarks, as well we changes to

us of it's So the first program long-winded has our contingency current of The bit know contracts here our question. tailwind held base in you your answering for a the way and in year. as been a of we And around provide the of kind through quarter OPTEMPO and as installed next half clarity revenue. that bit range able, but think, you guidance first get the for to the be on to talk more toward We'll August. we end the I the that little tilted in year our we a of time of top a

Tobey Sommer

just different budget military 'XX, And outlook for of and always what fiscal contacts which it's in a is of their of a the Biden's budget next Capitol a branches you into kind marker with Hill thing budgetary so. 'XX. But is also question last are on sort fiscal as look budget the I but know we to kind got of request, My respect hearing we your President one. onto

Charles Prow

the have demand category. also business, the you it's would we although and And market budget. focus, maintaining the to support. -- fall at combined the the not operations same this of see lines our of time, traditionally the in the infrastructures aerospace on O&M in continue Well, know, platforms mention, yes, part we older strong under that And that I as point

on ultimately of providing the of, cost O&M that and always think the favorably I of will But pressure there the I'd time us -- obviously, to to clients extend total given up spending yes, we to improve globally, demonstrate cycle there's and operations, the with in operations amount a ways various So components funding. value national this again, our that, it's how making higher at just operations can platforms also tells in that point security budget. value-adding And actually in the and can the really work ways life that O&M the support. we say they things we the longer in

Operator

from is ahead. question Please next go Bert Stifel. The with Subin

Bert Subin

rest we to way out Chuck. the maybe business? a If the what's And we for expect V, organic strip the for to Vectrus' percentage LOGCAP follow-up think rate of best revenue? as growth should be just the about LOGCAP to run that, of what a full

Charles Prow

I will original what about a and to win a and indicate here were the talked our that on think significant not to is that forth of that so LOGCAP we the is continue business. award. we I publicly very have vehicle exercises as clearly perform part that

rate terms see dollar a very prepared as will which see as to as prior as and we LOGCAP, is Iraq the of was And very to can encountered Kwajalein, initially. task security route to continue significant. to specifically base. with to our task We materials With be run we Kuwait to the significant and is originally bid Kwajalein than protective of similar regard know in the scope us had Iraq, announced Vectrus in rate the in new the not prior dissimilar much incumbent K-BOSSS run regard you significant the see looking the that Kuwait activity. was So and market which you Kwajalein. for more we in current less was task not

question, like additional wins I both to as areas exact to various continue wins only way your of and string talked support. protection the an the wins we LOGCAP answer the contracts contingency continued space that the in and just in substantial, LOGCAP demonstrate market a work not as operational the believe, operations but move AFCAP the is new not addressing is to as very had we contract. base with successful can to that well I new be activities we've we to LOGCAP leverage under So we spectrum across which other like as the work in had globally to about our continue, route of the a but in Navy today, that

Bert Subin

vehicle, Would underlying fair know growing? you've business the outside to highlighted you just contract that several... is excluding say of that say organically it's LOGCAP, I

Charles Prow

yes. question your The is short to answer

Bert Subin

seems maybe increased then there, European if activity release was Initiatives. deeper digging just years, from noted and Deterrence the you getting the Can And you growing cut to been The this like budget year or as on company opportunity again. funding go have back we It request few better. a a next? quarter looks EDI, has non-LOGCAP frame be during is the there, help what you that stuff, there us coming maybe the in

Charles Prow

of we activities, projected it the the the I efficient seamless. start-up we that Benning, Force very but protest it, say, in and the in I Air get is take to should exercises competitively continue deal. full about ability to not about of in to to date just then quick, that go European bring transitioned was that that in the in we've have that a comes demonstrate to seen marketplace, will various opportunity the also quickly however, to start-up talked -- very demand parts operational INDOPACOM did way. time talking continue prepared I demonstrate scope to big is say, predominantly was bit to significant. signal other capability to that but Benning ability, contracts lot kind spend an can't profile of in scope to at very a our not again, call new very not That and, -- cost enhancements today. We the a a been seen OPTEMPO the in it an we've we client And contract -- through through net guess, online the When a just like Europe, continue sets remarks that of Fort activities, the the we in and [position]

Bert Subin

it Europe, that become now? clarify to say some like of there Or on sounds Just said is the the material? you that Force right expect noted Air you Force. immaterial it's now, the to sort customers in to too Air Do sort know I classified in that of release and -- hard you

Charles Prow

in and various of in point earlier that's or Hawaii with their expanding I to that -- the has normally that the arrive with would agility is proof our is of level, hard likelihood say ability high if do, mission execute a teams always in experience good, back end at say, this do, and support you of we it's mission demonstrated we too that's as we been year as obviously the fall year of that to but very support missions. right? perform to my seamlessly, a our clients And last execute normally to you again,

Bert Subin

have operations, work. seems for just it. do doing of change they're But just largest go environment for noticed change used to seems me. contracts competitor the bidding still historically move spectrum, to I'm in competitive you the that tech It against in any if noted one like but like logistics you're end of they less contractors. the the any the you the up do environment -- competitive last higher curious on, seeing one started it have Have for you're you

Charles Prow

are. we think I are, we think I

federal has well, as the occurred in As you aspect that been covered the know We've seen the space, because it seen and well. aerospace marketplace consolidation Vertex business of the services that, has the has significant. quite operational in you've

a competition more That that mean are doesn't means our coordinated. is focused result, competitors kind and much less. as any just that So of

actually execute we're a the industry We -- also any to we're it go-to-market very and as our -- opportunities provides the much some but And that campaigns us. matter stay challenges provides aware marketplace. in to very the of converging opportunities, and We on it both fairly when strategy. continue focused consolidates, challenges, some

Operator

to Prow like would conference I session. to remarks. closing turn over question-and-answer our for concludes the any Chuck This back

Charles Prow

you and to us today. both move you as time the the progress Goodbye. call forward and talk quarter we much, to on very August. talk next we in merger to on the back and very thank Thank everyone, to status Thank through you look you We we'll and this much, for the reporting on you soon. joining

Operator

Thank now attending concluded. The presentation. conference today's you for has

You may now disconnect.

V2X (VVX) 14 May 222022 Q1 Earnings call transcript