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Collaborating With Robots

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How to Help Humans Understand Robots

 

Adam Zewe | MIT
News Office

Scientists who study human-robot interaction often focus on understanding human intentions from a robot’s perspective, so the robot learns to cooperate with people more effectively. But human-robot interaction is a two-way street, and the human also needs to learn how the robot behaves.

Thanks to decades of cognitive science and educational psychology research, scientists have a pretty good handle on how humans learn new concepts. So, researchers at MIT and Harvard University collaborated to apply well-established theories of human concept learning to challenges in human-robot interaction.

They examined past studies that focused on humans trying to teach robots new behaviors. The researchers identified opportunities where these studies could have incorporated elements from two complementary cognitive science theories into their methodologies. They used examples from these works to show how the theories can help humans form conceptual models of robots more quickly, accurately, and flexibly, which could improve their understanding of a robot’s behavior.

Humans who build more accurate mental models of a robot are often better collaborators, which is especially important when humans and robots work together in high-stakes situations like manufacturing and health care, says Serena Booth, a graduate student in the Interactive Robotics Group of the Computer Science and Artificial Intelligence Laboratory (CSAIL), and lead author of the paper.

“Whether or not we try to help people build conceptual models of robots, they will build them anyway. And those conceptual models could be wrong. This can put people in serious danger. It is important that we use everything we can to give that person the best mental model they can build,” says Booth.

Booth and her advisor, Julie Shah, an MIT professor of aeronautics and astronautics and the director of the Interactive Robotics Group, co-authored this paper in collaboration with researchers from Harvard. Elena Glassman ’08, MNG ’11, PhD ’16, an assistant professor of computer science at Harvard’s John A. Paulson School of Engineering and Applied Sciences, with expertise in theories of learning and human-computer interaction, was the primary advisor on the project. Harvard co-authors also include graduate student Sanjana Sharma and research assistant Sarah Chung. The research will be presented at the IEEE Conference on Human-Robot Interaction.

 

A Theoretical Approach

The researchers analyzed 35 research papers on human-robot teaching using two key theories. The “analogical transfer theory” suggests that humans learn by analogy. When a human interacts with a new domain or concept, they implicitly look for something familiar they can use to understand the new entity.

The “variation theory of learning” argues that strategic variation can reveal concepts that might be difficult for a person to discern otherwise. It suggests that humans go through a four-step process when they interact with a new concept: repetition, contrast, generalization, and variation.

While many research papers incorporated partial elements of one theory, this was most likely due to happenstance, Booth says. Had the researchers consulted these theories at the outset of their work, they may have been able to design more effective experiments.

For instance, when teaching humans to interact with a robot, researchers often show people many examples of the robot performing the same task. But for people to build an accurate mental model of that robot, variation theory suggests that they need to see an array of examples of the robot performing the task in different environments, and they also need to see it make mistakes.

“It is very rare in the human-robot interaction literature because it is counterintuitive, but people also need to see negative examples to understand what the robot is not,” Booth says.

These cognitive science theories could also improve physical robot design. If a robotic arm resembles a human arm but moves in ways that are different from human motion, people will struggle to build accurate mental models of the robot, Booth explains. As suggested by analogical transfer theory, because people map what they know — a human arm — to the robotic arm, if the movement doesn’t match, people can be confused and have difficulty learning to interact with the robot.

 

Enhancing Explanations

Booth and her collaborators also studied how theories of human-concept learning could improve the explanations that seek to help people build trust in unfamiliar, new robots.

“In explainability, we have a really big problem of confirmation bias. There are not usually standards around what an explanation is and how a person should use it. As researchers, we often design an explanation method, it looks good to us, and we ship it,” she says.

Instead, they suggest that researchers use theories from human concept learning to think about how people will use explanations, which are often generated by robots to clearly communicate the policies they use to make decisions. By providing a curriculum that helps the user understand what an explanation method means and when to use it, but also where it does not apply, they will develop a stronger understanding of a robot’s behavior, Booth says.

Based on their analysis, they make a number of recommendations about how research on human-robot teaching can be improved. For one, they suggest that researchers incorporate analogical transfer theory by guiding people to make appropriate comparisons when they learn to work with a new robot. Providing guidance can ensure that people use fitting analogies so they aren’t surprised or confused by the robot’s actions, Booth says.

They also suggest that including positive and negative examples of robot behavior, and exposing users to how strategic variations of parameters in a robot’s “policy” affect its behavior, eventually across strategically varied environments, can help humans learn better and faster. The robot’s policy is a mathematical function that assigns probabilities to each action the robot can take.

“We’ve been running user studies for years, but we’ve been shooting from the hip in terms of our own intuition as far as what would or would not be helpful to show the human. The next step would be to be more rigorous about grounding this work in theories of human cognition,” Glassman says.

Now that this initial literature review using cognitive science theories is complete, Booth plans to test their recommendations by rebuilding some of the experiments she studied and seeing if the theories actually improve human learning.

 

Suggested Reading



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Robotics and AI Are Being Tapped by Cannabis Growers

Integrating Innovative Technology Inputs in Modern Warfare

 

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Eagle Bulk Shipping (EGLE) – 1Q2022 Looking Good

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Monday, March 07, 2022

Eagle Bulk Shipping (EGLE)
1Q2022 Looking Good

Eagle Bulk Shipping Inc. is a US-based drybulk owner-operator focused on the Supramax/Ultramax mid-size asset class, which ranges from 50,000 and 65,000 deadweight tons in size; these vessels are equipped with onboard cranes allowing for the self-loading and unloading of cargoes, a feature which distinguishes them from the larger classes of drybulk vessels and provides for greatly enhanced flexibility and versatility- both with respect to cargo diversity and port accessibility. The Company transports a broad range of major and minor bulk cargoes around the world, including coal, grain, ore, pet coke, cement, and fertilizer. Eagle operates out of three offices, Stamford (headquarters), Singapore, and Hamburg, and performs all aspects of vessel management in-house including: commercial, operational, technical, and strategic.

Poe Fratt, Senior Research Analyst, Logistics, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

    Strong end to the year and another dividend declared. Adjusted EBITDA of $91.6 million and TCE rates of $29.4k/day were very strong and in line with expectations. While opex and G&A were higher than expected due to acquisition and refinancing activity, both should moderate this year. 4Q2021 dividend of $2.05/share was declared based on EPS of $6.79/share.

    1Q2022 Forward cover of 95% is high.  Fine Tuning 2022 EBITDA and dividend estimate. Our EBITDA estimate of $366.1 million is based on TCE revenue of $512.1 million, TCE rates of $27.7k/day, ownership days of 19,345 (+1,087) and cash operating costs of $7.4k/day. Based on the dividend payout target of 30% of net income, our 2022 dividend estimate is $6.73/share …

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Allegiant Gold (AUXXF)(AUAU:CA) – Off to a Strong Start in 2022

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Monday, March 07, 2022

Allegiant Gold (AUXXF)(AUAU:CA)
Off to a Strong Start in 2022

Allegiant Gold is a mid-stage exploration stage company with 10 highly prospective projects in the southwest United States, including 7 projects in the State of Nevada. Allegiant’s flagship project is Eastside, a district-scale project in Nevada with inferred resources of 1.4 million gold and 8.8 million silver ounces of inferred resources and significant potential to add size and scale. The company’s shares trade on the TSX Venture Exchange under the ticker symbol “AUAU” and on the OTCQX under the ticker symbol “AUXXF.”

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

    Near-term drilling programs. Beginning this month, reverse circulation (RC) drilling will focus on the east pediment zone and the western anomaly and entail 35 holes, including 25 holes at the east pediment zone with an average depth of 200 meters per hole, and 10 holes at the western anomaly with an average depth of 300 meters per hole. Core drilling will begin in May to test the recently discovered high-grade zone within the western edge of the original pit zone and will entail 7 core holes with an average depth of 600 meters.

    Updating estimates.  For the three-month period ending December 31, 2021, Allegiant Gold reported a net loss of C$(0.01) per share compared to C$(0.00) during the prior year period and our estimate of C$0.00. Operating expenses were modestly above our estimates, and we have adjusted our fiscal year 2022 net loss per share estimate to C$(0.01) from C$0.00. Our 2023 per share estimate is unchanged …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

TherapeuticsMD Enters Into a Definitive Agreement to Divest vitaCare to GoodRx

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TherapeuticsMD Enters Into a Definitive Agreement to Divest vitaCare to GoodRx

Research, News, and Market Data on TherapeuticsMD

 

GoodRx has agreed to acquire vitaCare for $150 million in cash, with an additional $7 million consideration contingent upon vitaCare’s financial performance through 2023

BOCA RATON, Fla.–(BUSINESS WIRE)–Mar. 7, 2022– 
TherapeuticsMD, Inc. (“TXMD” or the “Company”) (NASDAQ: TXMD), an innovative, leading women’s healthcare company, today announced that it has entered into a definitive agreement to divest its vitaCare Prescription Services (vitaCare) business to 
GoodRx (Nasdaq: GDRX), a consumer-focused digital healthcare platform. VitaCare is a technology and services platform that helps patients navigate key access and adherence barriers for brand medications.

Under the terms of the agreement, TXMD will receive 
$150 million in cash at closing, subject to customary adjustments, with up to an additional 
$7 million in cash consideration contingent upon vitaCare’s financial performance through 2023. The transaction is expected to close in the second quarter of 2022, subject to the satisfaction of customary closing conditions. TXMD will also enter into a long-term services agreement with vitaCare to continue to utilize the vitaCare platform.

“We are pleased to find a fitting home for vitaCare and are confident that 
GoodRx will expand on vitaCare’s track record of increasing patient access,” said Hugh O’Dowd, Chief Executive Officer of 
TherapeuticsMD. “This transaction will allow 
TherapeuticsMD to focus on our core women’s health business and mission of empowering women of all ages through better healthcare, while at the same time delivering value for our stakeholders.”

TherapeuticsMD will further discuss this transaction and take questions on its upcoming earnings call scheduled for 
March 10, 2022 at 
8:30 AM ET.

Advisors

Locust Walk served as financial advisor and 
DLA Piper LLP (US) served as legal counsel to 
TherapeuticsMD.

About TherapeuticsMD, Inc.

TherapeuticsMD, Inc. is an innovative, leading healthcare company, focused on developing and commercializing novel products exclusively for women. TherapeuticsMD’s products are designed to address the unique changes and challenges women experience through the various stages of their lives with a therapeutic focus in family planning, reproductive health, and menopause management. 
TherapeuticsMD is committed to advancing the health of women and championing awareness of their healthcare issues. To learn more about 
TherapeuticsMD, please visit therapeuticsmd.com or follow us on Twitter: @TherapeuticsMD and on Facebook: 
TherapeuticsMD.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about 
TherapeuticsMD. Forward-looking statements may include, but are not limited to, statements relating to TherapeuticsMD’s objectives, plans and strategies as well as statements, other than historical facts, that address activities, events or developments that the company intends, expects, projects, believes or anticipates will or may occur in the future. These statements are often characterized by terminology such as “believes,” “hopes,” “may,” “anticipates,” “should,” “intends,” “plans,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy” and similar expressions and are based on assumptions and assessments made in light of management’s experience and perception of historical trends, current conditions, expected future developments and other factors believed to be appropriate. Forward-looking statements in this press release are made as of the date of this press release, and 
TherapeuticsMD undertakes no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of TherapeuticsMD’s control. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in the sections titled “Risk Factors” in TherapeuticsMD’s filings with the 
Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as well as reports on Form 8-K, and include the following: whether 
TherapeuticsMD will be able to successfully divest its vitaCare business and how the proceeds that may be generated by such divestiture will be utilized; the effects of the COVID-19 pandemic; TherapeuticsMD’s ability to maintain or increase sales of its products; TherapeuticsMD’s ability to develop and commercialize IMVEXXY®, ANNOVERA®, and BIJUVA® and obtain additional financing necessary therefore; whether 
TherapeuticsMD will be able to comply with the covenants and conditions under its term loan facility; the effects of supply chain issues on the supply of the company’s products; the potential of adverse side effects or other safety risks that could adversely affect the commercialization of TherapeuticsMD’s current or future approved products or preclude the approval of TherapeuticsMD’s future drug candidates; whether the FDA will approve the lower dose of BIJUVA and the manufacturing supplement for ANNOVERA; TherapeuticsMD’s ability to protect its intellectual property, including with respect to the Paragraph IV notice letter the company received regarding IMVEXXY; the length, cost and uncertain results of future clinical trials; TherapeuticsMD’s reliance on third parties to conduct its manufacturing, research and development and clinical trials; the ability of TherapeuticsMD’s licensees to commercialize and distribute the company’s products; the availability of reimbursement from government authorities and health insurance companies for TherapeuticsMD’s products; the impact of product liability lawsuits; the influence of extensive and costly government regulation; the impact of leadership transitions; and the volatility of the trading price of the company’s common stock.

Investor & Media
Lisa M. Wilson

In-Site Communications, Inc.
T: 212-452-2793
E: lwilson@insitecony.com

Source: 
TherapeuticsMD, Inc.

Vectrus Announces Fourth Quarter and Full-Year 2021 Results

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Vectrus Announces Fourth Quarter and Full-Year 2021 Results

Research, News, and Market Data on Vectrus

 

– 2021 revenue +28% Y/Y to $1,784 million; Q4 revenue +18% Y/Y to $419.4 million
– 2021 Operating income of $62.0 million; Adjusted EBITDA margin¹ of 4.7%
– 2021 fully diluted EPS of $3.86; Q4 fully diluted EPS of $0.63
– 2021 Adjusted diluted EPS¹ of $4.77; Q4 Adjusted diluted EPS¹ of $0.90
– Strong 2021 operating cash flow generation of $61.3 million
– Backlog of $5.0 billion; Several new wins expand market diversity
– Separately announces Definitive Agreement to combine with Vertex
– Conference call changed to today, March 7th, 8:00 AM E.T.

COLORADO SPRINGS, Colo., March 7, 2022 /PRNewswire/ — Vectrus, Inc. (NYSE:VEC) announced fourth quarter and full-year 2021 financial results.

“This year, Vectrus continued its strong momentum in the converged market, and our financial results for the fourth quarter and full-year 2021 underscore the successful execution of our growth strategy with year-on-year total and organic revenue growth of approximately 28% and 10%, respectively,” said Chuck Prow, Chief Executive Officer of Vectrus. “Our team showcased its agility to meet the unique needs of our clients by successfully supporting several important missions, including Pacific Defender, a major contingency task order in INDOPACOM, supporting the Afghanistan refugee mission to support the Non-Combatant Evacuation Operation as well as supporting the Department of Defense with the establishment of a water supply system for military housing at Red Hill, Hawaii. Additionally, we demonstrated our ability to support operations of larger size and scope by phasing in all the CENTCOM task orders under the LOGCAP V Contract. These task orders provide substantial revenue visibility for the next several years.”

“This year, we also won the five-year, $44 million AFCAP V Saudi Foreign Military Sales Task Order, our first win in the Kingdom of Saudi Arabia, to provide base operation support to the Air Force, and we finished the year by winning the Fort Benning Logistics Support task order, a five-year, $250 million award under the Enhanced Army Global Logistics Enterprise (EAGLE) IDIQ Contract. Fort Benning is one of the DoD’s Power Projection Platforms, that supports the Army’s ability to strategically deploy its high priority active and reserve component units. This award builds on our existing EAGLE task order to support the Logistics Readiness Center at Fort Bragg, another power projection platform, that has recently supported the deployment of troops to the European Area of Operation.”

“Subsequent to the fourth quarter, Vectrus was selected to complete the final phases of application development for the 5G Naval Base Coronado Smart Warehouse. This effort is part of the DoD’s $600 million 5G experimentation and testing initiative, originally awarded in 2020. Vectrus successfully demonstrated a Converged Environment solution, addressing NAVSUP operational challenges through the implementation of advanced technology applications. The Smart Warehouse is a continued demonstration of our Converged Environment portfolio of mission essential solutions, which integrate base operations support, supply chain and logistics, IT and network operations, engineering and digital integration, and security, to help increase efficiency, reduce costs, improve readiness and cybersecurity, and strengthen national security. We look forward to bringing next-generation efficiencies to the naval logistics operations.”

Prow concluded, “All of these impressive accomplishments are a testament to our teams’ 24/7 dedication to our clients and supporting their critical missions.”

Fourth Quarter 2021 Results

“Our fourth quarter and full-year 2021 financial results demonstrate the resilience of our business model and commitment to maintaining a strong balance sheet,” said Susan Lynch, Senior Vice President and Chief Financial Officer. “We are pleased to finish 2021 in a strong financial position, with organic revenue growth and significant cash generation, and we are excited to build on this momentum in 2022.”

Fourth quarter revenue was $419 million up 18% year-on-year as compared to the same period last year. Revenue grew year-on-year as a result of the company’s two acquisitions on December 31, 2020. Organic revenue grew by $3.2 million, or 0.9%, reflecting the transition to LOGCAP V Kuwait and Iraq task orders and completion of certain programs, including the Afghanistan Evacuation Operation.

Operating income was $10.0 million or 2.4% margin. M&A and integration related expenses were $1.0 million and the amortization of acquired intangible assets were $2.5 million. Adjusted operating income1 was $13.6 million or 3.2% margin. EBITDA1 was $14.3 million, or 3.4% margin. Adjusted EBITDA1 was $15.3 million, with a margin of 3.6%, compared to $17.9 million and 5.0% in 2020. The year-on-year margin was impacted by the phase-in of new awards, program completions, contract mix and considerable material and pass through content which carries a lower margin.

Fully diluted EPS was $0.63, reflecting the above-mentioned M&A and integration-related costs. Adjusted diluted EPS1 for the fourth quarter was $0.90 as compared to $1.25 in 2020. Adjusted diluted EPS1 was impacted by lower margins in the quarter, higher interest expense due to the company’s two acquisitions in December 2020 and higher depreciation expense.

Full-Year 2021 Results

Full-year revenue was $1.784 billion, up 28% year-on-year.  Organic revenue increased 10% in 2021, driven by new contract wins, base expansion, and phase-ins. The Company reported operating income of $62.0 million, with an operating margin of 3.5%,  Adjusted operating income1 was $76.6 million, with a 4.3% margin, which is an improvement from $52.2 million and 3.7% from the prior year. The increase in operating income resulted from the acquisitions of Zenetex and HHB and improved program performance throughout the year.

Full-year EBITDA1 was $78.6 million and a margin of 4.4%.  Adjusted EBITDA1 was $83.1 million with a 4.7% margin.

Full-year diluted EPS was $3.86, favorably impacted by the recognition of tax credits from prior years. Adjusted diluted EPS1 for 2021 was $4.77, as compared to $3.36 in 2020.

Cash provided by operating activities for the year were $61.3 million, compared to $64.1 million in 2020. Cash flow in the prior year benefitted from the CARES Act by $13.2 million. Lynch continued, “our strong cash generation is due to efficient collections and working capital management on programs. Excluding the prior year benefit of the CARES Act payroll tax deferrals, year-to-date cash flow from operations improved 20% over last year.”

During the year, Vectrus lowered its debt balance by $73.6 million resulting in an ending balance of $105.4 million.  Cash at year-end was $38.5 million down from $66.9 million.  Total liquidity as of December 31, 2021, was more than $200 million. Total consolidated indebtedness to consolidated EBITDA1 (total leverage ratio) was 1.20x.

Total backlog as of December 31, 2021 was $5 billion and funded backlog was $1 billion. The trailing twelve-month book-to-bill was 1.0x.

2022 Guidance

Guidance for 2022 is as follows:

$ millions, except for EBITDA margins and per share amounts

2022 Guidance

2022 Mid-Point

Revenue

$1,820

to

$1,860

$1,840

Operating Income Margin

3.4  %

to

3.6  %

3.5  %

Adjusted EBITDA Margin1

4.5  %

to

4.7  %

4.6  %

Earnings Per Share

$3.72

to

$4.08

$3.90

Adjusted Diluted Earnings Per Share1

$4.57

to

$4.93

$4.74

Net Cash Provided by Operating Activities

$50.0

to

$53.5

$51.75

Forward-looking statements are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the Safe Harbor Statement below. 

Vertex Transaction and Conference Call Information

In a separate press release issued today, Vectrus announced that it has entered into an all-stock merger transaction with The Vertex Company to create a leading global provider of mission-essential solutions. The merger is expected to close in the third quarter of 2022, subject to satisfaction of customary closing conditions, including receipt of regulatory and Vectrus shareholder approvals.

As a result of this announcement, management will conduct a conference call with analysts and investors at 8:00 a.m. ET on Monday, March 7, 2022. U.S.-based participants may dial in to the conference call at 877-407-0792, while international participants may dial 201-689-8263. A live webcast of the conference call as well as an accompanying slide presentation will be available on the Vectrus Investor Relations website at http://investors.vectrus.com or https://www.webcaster4.com/Webcast/Page/1431/44827.

A replay of the conference call will be posted on the Vectrus website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through March 21, 2022, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13727760. 

Footnotes:
1 See “Key Performance Indicators and Non-GAAP Financial Measures” for reconciliation.

About Vectrus

For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

FORWARD-LOOKING STATEMENTS

Certain material presented in this press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, Vectrus may be unable to obtain shareholder approval as required for the Transaction; conditions to the closing of the Transaction may not be satisfied; the possibility that anticipated benefits of the Transaction may not be realized or may take longer to realize than expected; the possibility that costs related to Vectrus’s integration of Vertex’s operations may be greater than expected and/or that revenues following the Transaction may be lower than expected; Vectrus’s business may suffer as a result of uncertainty surrounding the Transaction and disruption of management’s attention due to the Transaction; the outcome of any legal proceedings that arise that are related to the Transaction; Vectrus may be adversely affected by other economic, business, and/or competitive factors; the risk that Vectrus may be unable to obtain governmental and regulatory approvals required for the Transaction, or that required governmental and regulatory approvals may delay the Transaction or result in the imposition of conditions that could reduce the anticipated benefits from the Transaction or cause the parties to abandon the Transaction; the impact of legislative, regulatory, competitive and technological changes; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the effect of the Transaction on the ability of Vectrus to retain and maintain relationships with both Vectrus’s and Vertex’s customers, including the U.S. Government; other risks to the consummation of the merger, including the risk that the merger will not be consummated within the expected time period or at all; responses from customers and competitors to the Transaction; the risk that the integration of Vertex may distract management from other important matters; results from the Transaction may be different than those anticipated; statements about Vectrus’s 2022 performance outlook, five-year growth plan, revenue, DSO, contract opportunities, the impacts of COVID-19, and any discussion of future operating or financial performance.

Whenever used, words such as “may,” “are considering,” “will,” “likely,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “could,” “potential,” “continue,” “goal” or similar terminology are forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management.

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information and Where to Find It

In connection with the Transaction, Vectrus plans to file with the SEC and mail or otherwise provide to its shareholders a proxy statement/prospectus regarding the Transaction. BEFORE MAKING ANY VOTING DECISION, VECTRUS’S SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY VECTRUS WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and shareholders will be able to obtain a free copy of the proxy and other documents containing important information about Vectrus and Vertex, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Vectrus makes available free of charge at www.vectrus.com (in the “Investors” section), copies of materials it files with, or furnishes to, the SEC.

Participants in Solicitation

Vectrus, its directors and certain of its respective executive officers may be considered participants in the solicitation of proxies in connection with the Transaction. Information about the directors and executive officers of Vectrus is set forth in Vectrus’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on March 2, 2021, and its definitive proxy statement for the 2021 annual meeting of shareholders, which was filed with the SEC on March 23, 2021, certain of its Quarterly Reports on Form 10-Q and certain of its Current Reports filed on Form 8-K. To the extent the holdings of securities of Vectrus by Vectrus’s directors and executive officers have changed since the amounts set forth in Vectrus’s proxy statement for its 2021 annual meeting of shareholders, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of such individuals in the Transaction will be included in the proxy statement/prospectus relating to the Transaction when it is filed with the SEC. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, may be obtained by reading the definitive proxy statement regarding the acquisition described above.

 

VECTRUS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME





Year Ended December 31,

(In thousands, except per share data)

2021

2020

2019

Revenue

$   1,783,665

$   1,395,529

$   1,382,525

Cost of revenue

1,623,245

1,271,375

1,254,560

Selling, general, and administrative expenses

98,400

80,679

78,316

Operating income

62,020

43,475

49,649

Interest expense, net

(7,985)

(4,793)

(6,470)

Income from operations before income taxes

54,035

38,682

43,179

Income tax expense

8,307

1,731

10,003

Net income

$        45,728

$        36,951

$        33,176







Earnings per share





Basic

$           3.91

$            3.19

$            2.90

Diluted

$           3.86

$            3.14

$            2.86

Weighted average common shares outstanding – basic

11,705

11,599

11,444

Weighted average common shares outstanding – diluted

11,836

11,751

11,612

 

VECTRUS, INC. 

CONSOLIDATED BALANCE SHEETS





December 31,

(In thousands, except per share data)

2021

2020

Assets



Current assets



Cash and cash equivalents

$           38,513

$           66,949

Restricted cash

—

1,778

Receivables

348,605

314,959

Prepaid expenses

21,160

16,083

Other current assets

15,062

8,619

Total current assets

423,340

408,388

Property, plant, and equipment, net

23,758

22,573

Goodwill

321,734

339,702

Intangible assets, net

66,582

48,105

Right-of-use assets

43,651

18,718

Other non-current assets

10,394

6,325

Total non-current assets

466,119

435,423

Total Assets

$         889,459

$         843,811

Liabilities and Shareholders’ Equity



Current liabilities



Accounts payable

$         212,533

$         159,586

Compensation and other employee benefits

80,284

79,568

Short-term debt

10,400

8,600

Other accrued liabilities

55,031

40,657

Total current liabilities

358,248

288,411

Long-term debt, net

94,246

168,751

Deferred tax liability

32,214

39,386

Operating lease liability

34,536

13,970

Other non-current liabilities

20,128

28,355

 Total non-current liabilities

181,124

250,462

Total liabilities

539,272

538,873

Commitments and contingencies (Note 15)



 Shareholders’ Equity



Preferred stock; $0.01 par value; 10,000 shares authorized; No shares issued and outstanding

—

—

Common stock; $0.01 par value; 100,000 shares authorized; 11,738 and 11,625 shares issued and outstanding as of December 31, 2021 and 2020, respectively                                      

117

116

Additional paid in capital

88,116

82,823

Retained earnings

267,754

222,026

Accumulated other comprehensive loss

(5,900)

(27)

Total shareholders’ equity

350,087

304,938

Total Liabilities and Shareholders’ Equity

$         889,459

$         843,811

 

VECTRUS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS





Year Ended December 31,

(In thousands)

2021

2020

2019

Operating activities





Net income

$

45,728

$

36,951

$

33,176

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

Depreciation expense

6,526

4,097

3,379

Amortization of intangible assets

10,028

4,029

3,111

(Gain) loss on disposal of property, plant, and equipment

65

(14)

62

Stock-based compensation

8,331

9,445

8,262

Amortization of debt issuance costs

912

386

404

Changes in assets and liabilities:





Receivables

(36,376)

1,000

(21,053)

Prepaid expenses

(5,178)

(3,588)

(5,610)

Other assets

(7,667)

(3,644)

7,147

Accounts payable

56,985

(2,680)

(11,733)

Deferred taxes

(7,280)

(10,665)

(7,173)

Compensation and other employee benefits

1,133

12,004

9,652

Other liabilities

(11,868)

16,760

7,933

Net cash provided by operating activities

61,339

64,081

27,557

Investing activities





Purchases of capital assets and intangibles

(9,776)

(4,500)

(16,151)

Proceeds from the disposition of assets

16

84

5,400

Acquisition of business, net of cash acquired

262

(133,609)

(45,074)

Contribution to joint venture

(3,145)

—

—

Net cash (used in) investing activities

(12,643)

(138,025)

(55,825)

Financing activities





Repayments of long-term debt

(8,600)

(6,500)

(4,500)

Proceeds from revolver

529,000

314,000

333,500

Repayments of revolver

(594,000)

(199,000)

(333,500)

Proceeds from exercise of stock options

379

59

3,672

Payment of debt issuance costs

(17)

(830)

—

Payments of employee withholding taxes on share-based compensation

(2,347)

(1,955)

(1,068)

Net cash provided by (used in) financing activities

(75,585)

105,774

(1,896)

Exchange rate effect on cash

(3,325)

1,579

(663)

Net change in cash, cash equivalents and restricted cash

(30,214)

33,409

(30,827)

Cash, cash equivalents and restricted cash – beginning of year

68,727

35,318

66,145

Cash, cash equivalents and restricted cash – end of year

$

38,513

$

68,727

$

35,318

Supplemental Disclosure of Cash Flow Information:





Interest paid

$

5,801

$

3,717

$

6,229

Income taxes paid

$

9,703

$

14,520

$

4,511

Purchase of capital assets on account

$

277

$

2,226

$

556

Non-GAAP Measures

This press release includes certain non-GAAP financial measures, including EBITDA and Pro forma Adjusted EBITDA. These financial measures are not prepared in accordance with accounting principles generally accepted in the United States and may be different from non-GAAP financial measures used by other companies. Vertex and Vectrus believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP measures with comparable names should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP.

 

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







($K, except per share data)

Three Months Ended December 31, 2021

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Three Months Ended December 31, 2021 – Adjusted













Revenue

$       419,409

$                      —

$                     —

$                     —

$                     —

$       419,409

Growth

18.0%








18.0%

Operating income

$         10,017

$                1,039

$                       4

$               2,507

$                     —

$         13,567

Operating margin

2.4%








3.2%













Interest expense, net

$          (1,845)

$                      —

$                     —

$                     —

$                     —

$          (1,845)













Income from operations before income taxes

$            8,172

$                1,039

$                       4

$               2,507

$                     —

$         11,722













Income tax expense

$               685

$                     87

$                     —

$                  210


$              982

Income tax rate

8.4%








8.4%













Net income

$            7,487

$                   952

$                       4

$               2,297

$                     —

$         10,740













Weighted average common shares outstanding, diluted

11,880








11,880













Diluted earnings per share

$              0.63

$                  0.08

$                     —

$                 0.19

$                     —

$             0.90













EBITDA (Non-GAAP Measures)











($K)

Three Months Ended December 31, 2021

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization
of Acquired  Intangible Assets

Prior Years’ Tax Credits

Three Months Ended December 31, 2021 – Adjusted

Operating Income

$         10,017

$                1,039

$                       4

$               2,507

$                     —

$         13,567













Add:











Depreciation and amortization

$            4,245

$                      —

$                     —

$            (2,507)

$                     —

$           1,738













EBITDA

$         14,262

$                1,039

$                       4

$                     —

$                     —

$         15,305

EBITDA Margin

3.4%








3.6%

 

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







($K, except per share data)

Three Months Ended December 31, 2020

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Three Months Ended December 31, 2020 – Adjusted













Revenue

$       355,317

$                     —

$                     —

$                     —

$                     —

$       355,317













Operating income

$         13,725

$               1,960

$                   120

$                   998

$                     —

$         16,803

Operating margin

3.9%








4.7%













Interest expense, net

$              (806)

$                     —

$                     —

$                     —

$                     —

$             (806)













Income from operations before income taxes

$         12,919

$               1,960

$                   120

$                   998

$                     —

$         15,997













Income tax expense

$          (3,862)

$                   451

$                     28

$                   169

$               4,505

$           1,291

Income tax rate

(29.9)%








8.1%













Net income

$         16,781

$               1,509

$                     92

$                   829

$            (4,505)

$         14,706













Weighted average common shares outstanding, diluted

11,782








11,782













Diluted earnings per share

$              1.42

$                 0.13

$                 0.01

$                 0.07

$              (0.38)

$              1.25













EBITDA (Non-GAAP Measures)











($K)

Three Months Ended December 31, 2020

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Three Months Ended December 31, 2020 – Adjusted

Operating Income

$         13,725

$               1,960

$                   120

$                   998

$                     —

$         16,803













Add:











Depreciation and amortization

$            2,094

$                     —

$                     —

$               (998)

$                     —

$           1,096













EBITDA

$         15,819

$               1,960

$                   120

$                     —

$                     —

$         17,899

EBITDA Margin

4.5%








5.0%

 

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





($K, except per share data)

Twelve Months
Ended December 31, 2021

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Twelve Months
Ended December 31, 2021 – Adjusted













Revenue

$    1,783,665

$                     —

$                     —

$                     —

$                     —

$    1,783,665

Growth

27.8%








27.8%

Operating income

$         62,020

$               4,323

$                   192

$             10,028

$                     —

$         76,563

Operating margin

3.5%








4.3%













Interest expense, net

$          (7,985)

$                     —

$                     —

$                     —

$                     —

$          (7,985)













Income from operations before income taxes

$         54,035

$               4,323

$                   192

$             10,028

$                     —

$         68,578













Income tax expense

$            8,307

$                   665

$                     30

$               1,542

$               1,524

$         12,068

Income tax rate

15.4%








17.6%













Net income

$         45,728

$               3,658

$                   162

$               8,486

$            (1,524)

$         56,510













Weighted average common shares outstanding, diluted

11,836








11,836













Diluted earnings per share

$              3.86

$                 0.31

$                 0.01

$                 0.72

$              (0.13)

$              4.77













EBITDA (Non-GAAP Measures)











($K)

Twelve Months
Ended December 31, 2021

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Twelve Months
Ended December 31, 2021 – Adjusted

Operating Income

$         62,020

$               4,323

$                   192

$             10,028

$                     —

$         76,563













Add:











Depreciation and amortization

$         16,554

$                     —

$                     —

$          (10,028)

$                     —

$           6,526













EBITDA

$         78,574

$               4,323

$                   192

$                     —

$                     —

$         83,089

EBITDA Margin

4.4%








4.7%

 

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





($K, except per share data)

Twelve Months
Ended December 31, 2020

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Twelve Months
Ended December 31, 2020 – Adjusted













Revenue

$    1,395,529

$                     —

$                     —

$                     —

$                     —

$    1,395,529













Operating income

$         43,475

$               4,367

$                   345

$               4,029

$                     —

$         52,216

Operating margin

3.1%








3.7%













Interest expense, net

$          (4,793)

$                     —

$                     —

$                     —

$                     —

$          (4,793)













Income from operations before income taxes

$         38,682

$               4,367

$                   345

$               4,029

$                     —

$         47,423













Income tax expense

$            1,731

$               1,004

$                     76

$                   681

$               4,505

$           7,997

Income tax rate

4.5%








16.9%













Net income

$         36,951

$               3,363

$                   269

$               3,348

$            (4,505)

$         39,426













Weighted average common shares outstanding, diluted

11,751








11,751













Diluted earnings per share

$              3.14

$                 0.29

$                 0.02

$                 0.28

$              (0.38)

$              3.36













EBITDA (Non-GAAP Measures)











($K)

Twelve Months
Ended December 31, 2020

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Twelve Months
Ended December 31, 2020 – Adjusted

Operating Income

$         43,475

$               4,367

$                   345

$               4,029

$                     —

$         52,216













Add:











Depreciation and amortization

$            8,126

$                     —

$                     —

$              (4,029)

$                     —

$           4,097













EBITDA

$         51,601

$               4,367

$                   345

$                     —

$                     —

$         56,313

EBITDA Margin

3.7%








4.0%

 

Three Months Ended

Three Months Ended

Three Months Ended


December 31, 2021

December 31, 2021

December 31, 2021

($K)

 As Reported

Zenetex & HHB

Organic







Revenue

$                   419,409

$                     60,880

$                        358,529









Three Months Ended

Three Months Ended

Three Months Ended


December 31, 2020

December 31, 2020

December 31, 2020

($K)

As Reported

Zenetex & HHB

Organic







Revenue

$                   355,317

$                            —

$                        355,317







Organic Revenue $




$                            3,212

Organic Revenue %




0.9%









Twelve Months Ended

Twelve Months Ended

Twelve Months Ended


December 31, 2021

December 31, 2021

December 31, 2021

($K)

As Reported

Zenetex & HHB

Organic







Revenue

$                1,783,665

$                   255,340

$                     1,528,325









Twelve Months Ended

Twelve Months Ended

Twelve Months Ended


December 31, 2020

December 31, 2020

December 31, 2020

($K)

As Reported

Zenetex & HHB

Organic







Revenue

$                1,395,529

$                            —

$                     1,395,529







Organic Revenue $




$                        132,796

Organic Revenue %




9.5%

SUPPLEMENTAL INFORMATION

Revenue by client branch, contract type, contract relationship, and geographic region for the periods presented below was as follows: 

Revenue by Client











Year Ended December 31,

(In thousands)

2021

%

2020

%

2019

%

Army

$      1,134,849

64%

$         965,558

69%

$      958,582

69%

Air Force

266,291

15%

299,272

21%

306,767

22%

Navy

224,407

13%

68,748

5%

56,236

4%

Other

158,118

8%

61,951

5%

60,940

5%

Total revenue

$      1,783,665


$      1,395,529


$      1,382,525













Revenue by Contract Type











Year Ended December 31,

(In thousands)

2021

%

2020

%

2019

%

Cost-plus and cost-reimbursable

$      1,271,167

71%

$         955,506

68%

$      1,015,963

73%

Firm-fixed-price

452,112

25%

403,994

29%

334,510

24%

Time and material

$           60,386

4%

$           36,029

3%

$           32,052

3%

Total revenue

$      1,783,665


$      1,395,529


$      1,382,525













Revenue by Contract Relationship











Year Ended December 31,

(In thousands)

2021

%

2020

%

2019

%

Prime contractor

$      1,663,828

93%

$      1,324,628

95%

$      1,312,928

95%

Subcontractor

119,837

7%

70,901

5%

69,597

5%

Total revenue

$      1,783,665


$      1,395,529


$      1,382,525













Revenue by Geographic Region











Year Ended December 31,

(In thousands)

2021

%

2020

%

2019

%

Middle East

$      1,000,877

57%

$         902,162

65%

$         939,685

68%

United States

578,255

32%

328,214

24%

301,991

22%

Europe

142,606

8%

155,169

10%

137,915

10%

Asia

61,927

3%

9,984

1%

2,934

—%

Total revenue

$      1,783,665


$      1,395,529


$      1,382,525

 

CONTACT:

Vectrus
Mike Smith, CFA
719-637-5773
michael.smith@vectrus.com

SOURCE Vectrus, Inc.

Salem Media Group, Inc. Schedules 2022 Annual Meeting of Stockholders

Posted on by Admin



Salem Media Group, Inc. Schedules 2022 Annual Meeting of Stockholders

Research, News, and Market Data on Salem Media

 

IRVING, Texas–(BUSINESS WIRE)– Salem Media Group, Inc. (NASDAQ: SALM) announced today that it has scheduled its 2022 Annual Meeting of Stockholders to be held on Wednesday, May 4, 2022, at Salem’s principal executive offices, which are located at 6400 N. Belt Line Road, Irving, Texas, 75063, at 11:30 a.m. C.D.T.

Salem also announced the record date applicable for the voting of shares at the Annual Meeting to be March 9, 2022.

ABOUT SALEM MEDIA GROUP:

Salem Media Group is America’s leading multimedia company specializing in Christian and conservative content, with media properties comprising of radio, digital media and book and newsletter publishing. Each day Salem serves a loyal and dedicated audience of listeners and readers numbering in the millions nationally. With its unique programming focus, Salem provides compelling content, fresh commentary and relevant information from some of the most respected figures across the Christian and conservative media landscape. Learn more about Salem Media Group, Inc. at www.salemmedia.com, Facebook and Twitter.

Evan D. Masyr
Executive Vice President and Chief Financial Officer
(805) 384-4512
evan@salemmedia.com

Source: Salem Media Group, Inc.

Tonix Pharmaceuticals Announces Collaboration with Massachusetts General Hospital to Evaluate TNX-1900 (Intranasal Potentiated Oxytocin) for Treating Binge Eating Disorder

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Tonix Pharmaceuticals Announces Collaboration with Massachusetts General Hospital to Evaluate TNX-1900 (Intranasal Potentiated Oxytocin) for Treating Binge Eating Disorder

Research, News, and Market Data on Tonix Pharmaceuticals

 

An Investigator Initiated Phase 2 Clinical Trial of TNX-1900 In Patients with Binge Eating Disorder Planned for Second Half 2022

Binge Eating Disorder is Estimated to Affect 2.8 Million American Adults1-3

Expands Uses of Tonix’s Proprietary Potentiated Oxytocin for Intranasal Administration to a Potential New Indication

CHATHAM, N.J., March 07, 2022 (GLOBE NEWSWIRE) — Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP) (Tonix or the Company), a clinical-stage biopharmaceutical company, today announced an agreement with Massachusetts General Hospital, a teaching hospital of Harvard Medical School, to evaluate TNX-1900* in an investigator initiated Phase 2 clinical trial as a potential treatment for patients with binge eating disorder. The Phase 2 clinical trial is expected to start in the second half of 2022.

“Binge eating disorder is a serious mental health condition associated with behavioral and metabolic morbidity for which there are few treatment options,” said Seth Lederman, M.D., Chief Executive Officer of Tonix Pharmaceuticals. “Oxytocin is a well-known natural hormone that is used therapeutically in certain other indications including as an i.v. medication for the induction of labor in pregnancy with a medical indication. We are hopeful that our proprietary intranasal dosage form will enhance its properties for use in the underserved population of patients suffering from binge eating disorder.”

TNX-1900* is also in development for the treatment of chronic migraine and is expected to enter a multi-site Phase 2 potential pivotal clinical trial for the prevention of migraine headache in chronic migraineurs in the second half of 2022.

“The binge eating disorder trial is expected to provide a rich source of data to evaluate the potential clinical benefit of TNX-1900 on binge eating disorder, which is often seen in association with other behavioral conditions such as depression, substance abuse and posttraumatic stress disorder, and is often under-diagnosed and under-treated,” said Elizabeth A. Lawson, M.D., M.M.Sc., Director, Interdisciplinary Oxytocin Research Program, Neuroendocrine Unit, Massachusetts General Hospital and Associate Professor of Medicine at Harvard Medical School and principal investigator of the trial. “While available psychological and pharmacological treatments produce remission from binge eating in some cases, up to 50% of patients continue to binge, and weight loss in those with obesity is difficult to achieve and sustain. There is accumulating evidence that oxytocin may reduce food intake by acting on neural pathways involved in reward and impulse control, which have been implicated in binge eating disorder. We are excited to investigate TNX-1900 as a potential novel therapy to reduce binge eating and excess body weight in individuals with binge eating disorder.”

Dr. Lawson previously led a program of research suggesting intranasal oxytocin reduces food intake, modulates the neural circuitry driving eating behavior, and enhances impulse control in men with overweight and obesity.4-7

The planned investigator initiated Phase 2 clinical trial will be a randomized, double-blind, placebo-controlled study of 60 patients with binge eating disorder and obesity. The 8-week study will evaluate the efficacy and safety of TNX-1900 as a treatment for binge eating disorder and determine whether TNX-1900 reduces bingeing frequency and body weight in adults with binge eating disorder and obesity, and underlying mechanisms.

* TNX-1900 is an investigational new drug and has not been approved for any indication.

1https://www.bingeeatingdisorder.com/hcp/patient-demographics (accessed Feb 23, 2022)
2Hudson JI, et al. (2007) [Published correction appears in Biol Psychiatry. 2012;72(2):164.] Biol Psychiatry. 61(3):348-358. doi: 10.1016/j.biopsych.2006.03.040.
3Howden LM and Meyer JA. (2011) Age and sex composition: 2010. US Census Bureau
4Lawson EA et al. (2015) Oxytocin reduces caloric intake in men. Obesity 23(5):950-6.  doi: 10.1002/oby.21069.
5Plessow F. et al. (2018) Effects of intranasal oxytocin on the blood oxygenation level-dependent signal in food motivation and cognitive control pathways in overweight and obese men. Neuropsychopharmacology 43(3):638-645.  doi: 10.1038/npp.2017.226.
6Kerem L et al. (2020) Oxytocin reduces the functional connectivity between brain regions involved in eating behavior in men with overweight and obesity. In J Obes 44(5):980-989. doi: 10.1038/s41366-019-0489-7.
7Plessow F et al. (2021) Oxytocin administration increases proactive control in men with overweight or obesity: A randomized, double blind, placebo-controlled crossover study. Obesity 29(1):56-61. doi: 10.1002/oby.23010.

About Binge Eating Disorder

Binge-eating disorder is a psychiatric illness characterized by frequent episodes of uncontrollable consumption of large amounts of food. It is the most common eating disorder and often leads to obesity-associated complications and later psychopathology1. Binge eating disorder is characterized by increased homeostatic appetite and sensitivity to reward (including food reward), which may lead to initiation of binge episodes, and a reduced ability to control behavioral impulses and formed habits, creating an imbalance in the sensitive interplay between these bottom-up and top-down processes governing the adaptive regulation of food intake and energy balance2-5.

1Field AE et al. (2012) Prospective association of common eating disorders and adverse outcomes. Pediatrics, 130: e289–95.  doi: 10.1542/peds.2011-3663.
2Dawe S. & Loxton NJ, (2004) The role of impulsivity in the development of substance use and eating disorders Neurosci Biobehav Rev.  28(3):343-51. doi: 10.1016/j.neubiorev.2004.03.007.
3Giel KE et al. (2017) Food-Related Impulsivity in Obesity and Binge Eating Disorder-A Systematic Update of the Evidence. Nutrients 9(11):1170. doi: 10.3390/nu9111170.
4Hernandez D et al. (2019) Meal-Related Acyl and Des-Acyl Ghrelin and Other Appetite-Related Hormones in People with Obesity and Binge Eating. Obesity 27(4):629-635. doi: 10.1002/oby.22431.
5Schag K et al. (2013) Food-related impulsivity in obesity and binge eating disorder–a systematic review. Obes Rev.  14(6):477-95.  doi: 10.1111/obr.12017. 

About TNX-1900 and Tonix’s Potentiated Oxytocin Platform

TNX-1900 is based on a proprietary potentiated formulation of oxytocin and is currently being developed as a candidate for prophylaxis of chronic migraine, the treatment of insulin resistance1 and related conditions.TNX-1900 is based on Tonix’s patented intranasal potentiated oxytocin formulation. Tonix is also developing a different intranasal formulation, designated TNX-2900, for the treatment of Prader-Willi syndrome. Oxytocin is a naturally occurring human hormone that acts as a neurotransmitter in the brain. It was originally approved by the U.S. Food and Drug Administration as Pitocin®*, an intravenous infusion or intramuscular injection drug, for use in pregnant women to induce labor. An intranasal form of oxytocin was marketed in the U.S. by Novartis to assist in the production of breast milk as Syntocinon®** (oxytocin nasal 40 units/ml), but the product was withdrawn, and the New Drug Application has been discontinued. TNX-1900 and TNX-2900 are in the pre-Investigational New Drug stage and have not been approved for any indication.

1Deblon N, et al. (2011) PLoS ONE 6(9): e25565. doi:10.1371/journal.pone.0025565
*Pitocin® is a trademark of Par Pharmaceutical, Inc.
**Syntocinon® is a trademark of BGP Products Operations GmbH

About Tonix Pharmaceuticals Holding Corp.

Tonix is a clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics and diagnostics to treat and prevent human disease and alleviate suffering. Tonix’s portfolio is composed of immunology, infectious disease, and central nervous system (CNS) product candidates. Tonix’s immunology portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-15001 which is a humanized monoclonal antibody targeting CD40 ligand being developed for the prevention of allograft rejection treatment of autoimmune diseases. A Phase 1 study of TNX-1500 is expected to be initiated in the second half of 2022. Tonix’s infectious disease pipeline includes next-generation vaccines to prevent COVID-19, an antiviral to treat COVID-19, and a potential treatment for Long COVID. The pipeline also includes a vaccine in development to prevent smallpox. Tonix’s lead vaccine candidate for COVID-19, TNX-18002, is a live virus vaccine based on Tonix’s recombinant pox vaccine (RPV) platform. TNX-35003 (sangivamycin, i.v. solution) is a small molecule antiviral drug to treat acute COVID-19 and is in the pre-IND stage of development. TNX-102 SL4 , (cyclobenzaprine HCl sublingual tablets), is a small molecule drug being developed to treat Long COVID, a chronic post-COVID condition. Tonix expects to initiate a Phase 2 study in Long COVID in the first half of 2022. The Company’s CNS portfolio includes both small molecules and biologics to treat pain, neurologic, psychiatric and addiction conditions. Tonix’s lead CNS candidate, TNX-102 SL, is in mid-Phase 3 development for the management of fibromyalgia with a new Phase 3 study expected to start in the first half of 2022. Finally, TNX-13005 is a biologic designed to treat cocaine intoxication that is expected to start a Phase 2 trial in the first quarter of 2022.

1TNX-1500 is an investigational new biologic at the pre-IND stage of development and has not been approved for any indication.
2TNX-1800 is an investigational new biologic at the pre-IND stage of development and has not been approved for any indication. TNX-1800 is based on TNX-801, live horsepox virus vaccine for percutaneous administration, which is in development to protect against smallpox and monkeypox. TNX-801 is an investigational new biologic and has not been approved for any indication.
3TNX-3500 is an investigational new drug at the pre-IND stage of development and has not been approved for any indication.
4TNX-102 SL is an investigational new drug and has not been approved for any indication.
5TNX-1300 is an investigational new biologic and has not been approved for any indication.

This press release and further information about Tonix can be found at www.tonixpharma.com.

Forward-Looking Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on Tonix’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks related to the development of TNX-1900; the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations; delays and uncertainties caused by the global COVID-19 pandemic; risks related to the timing and progress of clinical development of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2021, and periodic reports filed with the SEC on or after the date thereof. All of Tonix’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth herein speaks only as of the date thereof.

Contacts

Jessica Morris (corporate)
Tonix Pharmaceuticals
investor.relations@tonixpharma.com 
(212) 688-9421

Olipriya Das, Ph.D. (media)
Russo Partners
olipriya.das@russopartnersllc.com 
(646) 942-5588

Peter Vozzo (investors)
ICR Westwicke
peter.vozzo@westwicke.com 
(443) 213-0505

Source: Tonix Pharmaceuticals Holding Corp.

Ocugen (OCGN) – COVAXIN Pediatric EUA Declined, But Majority of Expected Market Unaffected

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Monday, March 07, 2022

Ocugen (OCGN)
COVAXIN Pediatric EUA Declined, But Majority of Expected Market Unaffected

Ocugen Inc is a clinical stage biopharmaceutical company. It is focused on discovering, developing and commercializing a pipeline of innovative therapies that address rare and underserved eye diseases. Ocugen offers a diversified ophthalmology portfolio that includes novel gene therapies, biologics, and small molecules and targets a broad range of high-need retinal and ocular surface diseases.

Robert LeBoyer, Vice President, Research Analyst, Life Sciences, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

    FDA Has Denied The Pediatric Emergency Use Application (EUA).  Ocugen has announced that the FDA has declined its EUA for pediatric use in the ages 2 through 18 group. Although its approval would have been positive sign for full product BLA approval, we do not believe its denial will have any impact on the BLA for adult use.

    BLA Application for Adult Use Is Unaffected.  Ocugen did not give details about the reasons for the denial, only saying that it will “continue working with the FDA to evaluate the the regulatory pathway for COVAXIN.” We believe the FDA is highly unlikely to approve additional COVID-19 products under Emergency Use guidelines, and that the COVAXIN pediatric indication submission will be reviewed …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Release – Tonix Pharmaceuticals Announces Collaboration with Massachusetts General Hospital

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Tonix Pharmaceuticals Announces Collaboration with Massachusetts General Hospital to Evaluate TNX-1900 (Intranasal Potentiated Oxytocin) for Treating Binge Eating Disorder

Research, News, and Market Data on Tonix Pharmaceuticals

 

An Investigator Initiated Phase 2 Clinical Trial of TNX-1900 In Patients with Binge Eating Disorder Planned for Second Half 2022

Binge Eating Disorder is Estimated to Affect 2.8 Million American Adults1-3

Expands Uses of Tonix’s Proprietary Potentiated Oxytocin for Intranasal Administration to a Potential New Indication

CHATHAM, N.J., March 07, 2022 (GLOBE NEWSWIRE) — Tonix Pharmaceuticals Holding Corp. (Nasdaq: TNXP) (Tonix or the Company), a clinical-stage biopharmaceutical company, today announced an agreement with Massachusetts General Hospital, a teaching hospital of Harvard Medical School, to evaluate TNX-1900* in an investigator initiated Phase 2 clinical trial as a potential treatment for patients with binge eating disorder. The Phase 2 clinical trial is expected to start in the second half of 2022.

“Binge eating disorder is a serious mental health condition associated with behavioral and metabolic morbidity for which there are few treatment options,” said Seth Lederman, M.D., Chief Executive Officer of Tonix Pharmaceuticals. “Oxytocin is a well-known natural hormone that is used therapeutically in certain other indications including as an i.v. medication for the induction of labor in pregnancy with a medical indication. We are hopeful that our proprietary intranasal dosage form will enhance its properties for use in the underserved population of patients suffering from binge eating disorder.”

TNX-1900* is also in development for the treatment of chronic migraine and is expected to enter a multi-site Phase 2 potential pivotal clinical trial for the prevention of migraine headache in chronic migraineurs in the second half of 2022.

“The binge eating disorder trial is expected to provide a rich source of data to evaluate the potential clinical benefit of TNX-1900 on binge eating disorder, which is often seen in association with other behavioral conditions such as depression, substance abuse and posttraumatic stress disorder, and is often under-diagnosed and under-treated,” said Elizabeth A. Lawson, M.D., M.M.Sc., Director, Interdisciplinary Oxytocin Research Program, Neuroendocrine Unit, Massachusetts General Hospital and Associate Professor of Medicine at Harvard Medical School and principal investigator of the trial. “While available psychological and pharmacological treatments produce remission from binge eating in some cases, up to 50% of patients continue to binge, and weight loss in those with obesity is difficult to achieve and sustain. There is accumulating evidence that oxytocin may reduce food intake by acting on neural pathways involved in reward and impulse control, which have been implicated in binge eating disorder. We are excited to investigate TNX-1900 as a potential novel therapy to reduce binge eating and excess body weight in individuals with binge eating disorder.”

Dr. Lawson previously led a program of research suggesting intranasal oxytocin reduces food intake, modulates the neural circuitry driving eating behavior, and enhances impulse control in men with overweight and obesity.4-7

The planned investigator initiated Phase 2 clinical trial will be a randomized, double-blind, placebo-controlled study of 60 patients with binge eating disorder and obesity. The 8-week study will evaluate the efficacy and safety of TNX-1900 as a treatment for binge eating disorder and determine whether TNX-1900 reduces bingeing frequency and body weight in adults with binge eating disorder and obesity, and underlying mechanisms.

* TNX-1900 is an investigational new drug and has not been approved for any indication.

1https://www.bingeeatingdisorder.com/hcp/patient-demographics (accessed Feb 23, 2022)
2Hudson JI, et al. (2007) [Published correction appears in Biol Psychiatry. 2012;72(2):164.] Biol Psychiatry. 61(3):348-358. doi: 10.1016/j.biopsych.2006.03.040.
3Howden LM and Meyer JA. (2011) Age and sex composition: 2010. US Census Bureau
4Lawson EA et al. (2015) Oxytocin reduces caloric intake in men. Obesity 23(5):950-6.  doi: 10.1002/oby.21069.
5Plessow F. et al. (2018) Effects of intranasal oxytocin on the blood oxygenation level-dependent signal in food motivation and cognitive control pathways in overweight and obese men. Neuropsychopharmacology 43(3):638-645.  doi: 10.1038/npp.2017.226.
6Kerem L et al. (2020) Oxytocin reduces the functional connectivity between brain regions involved in eating behavior in men with overweight and obesity. In J Obes 44(5):980-989. doi: 10.1038/s41366-019-0489-7.
7Plessow F et al. (2021) Oxytocin administration increases proactive control in men with overweight or obesity: A randomized, double blind, placebo-controlled crossover study. Obesity 29(1):56-61. doi: 10.1002/oby.23010.

About Binge Eating Disorder

Binge-eating disorder is a psychiatric illness characterized by frequent episodes of uncontrollable consumption of large amounts of food. It is the most common eating disorder and often leads to obesity-associated complications and later psychopathology1. Binge eating disorder is characterized by increased homeostatic appetite and sensitivity to reward (including food reward), which may lead to initiation of binge episodes, and a reduced ability to control behavioral impulses and formed habits, creating an imbalance in the sensitive interplay between these bottom-up and top-down processes governing the adaptive regulation of food intake and energy balance2-5.

1Field AE et al. (2012) Prospective association of common eating disorders and adverse outcomes. Pediatrics, 130: e289–95.  doi: 10.1542/peds.2011-3663.
2Dawe S. & Loxton NJ, (2004) The role of impulsivity in the development of substance use and eating disorders Neurosci Biobehav Rev.  28(3):343-51. doi: 10.1016/j.neubiorev.2004.03.007.
3Giel KE et al. (2017) Food-Related Impulsivity in Obesity and Binge Eating Disorder-A Systematic Update of the Evidence. Nutrients 9(11):1170. doi: 10.3390/nu9111170.
4Hernandez D et al. (2019) Meal-Related Acyl and Des-Acyl Ghrelin and Other Appetite-Related Hormones in People with Obesity and Binge Eating. Obesity 27(4):629-635. doi: 10.1002/oby.22431.
5Schag K et al. (2013) Food-related impulsivity in obesity and binge eating disorder–a systematic review. Obes Rev.  14(6):477-95.  doi: 10.1111/obr.12017. 

About TNX-1900 and Tonix’s Potentiated Oxytocin Platform

TNX-1900 is based on a proprietary potentiated formulation of oxytocin and is currently being developed as a candidate for prophylaxis of chronic migraine, the treatment of insulin resistance1 and related conditions.TNX-1900 is based on Tonix’s patented intranasal potentiated oxytocin formulation. Tonix is also developing a different intranasal formulation, designated TNX-2900, for the treatment of Prader-Willi syndrome. Oxytocin is a naturally occurring human hormone that acts as a neurotransmitter in the brain. It was originally approved by the U.S. Food and Drug Administration as Pitocin®*, an intravenous infusion or intramuscular injection drug, for use in pregnant women to induce labor. An intranasal form of oxytocin was marketed in the U.S. by Novartis to assist in the production of breast milk as Syntocinon®** (oxytocin nasal 40 units/ml), but the product was withdrawn, and the New Drug Application has been discontinued. TNX-1900 and TNX-2900 are in the pre-Investigational New Drug stage and have not been approved for any indication.

1Deblon N, et al. (2011) PLoS ONE 6(9): e25565. doi:10.1371/journal.pone.0025565
*Pitocin® is a trademark of Par Pharmaceutical, Inc.
**Syntocinon® is a trademark of BGP Products Operations GmbH

About Tonix Pharmaceuticals Holding Corp.

Tonix is a clinical-stage biopharmaceutical company focused on discovering, licensing, acquiring and developing therapeutics and diagnostics to treat and prevent human disease and alleviate suffering. Tonix’s portfolio is composed of immunology, infectious disease, and central nervous system (CNS) product candidates. Tonix’s immunology portfolio includes biologics to address organ transplant rejection, autoimmunity and cancer, including TNX-15001 which is a humanized monoclonal antibody targeting CD40 ligand being developed for the prevention of allograft rejection treatment of autoimmune diseases. A Phase 1 study of TNX-1500 is expected to be initiated in the second half of 2022. Tonix’s infectious disease pipeline includes next-generation vaccines to prevent COVID-19, an antiviral to treat COVID-19, and a potential treatment for Long COVID. The pipeline also includes a vaccine in development to prevent smallpox. Tonix’s lead vaccine candidate for COVID-19, TNX-18002, is a live virus vaccine based on Tonix’s recombinant pox vaccine (RPV) platform. TNX-35003 (sangivamycin, i.v. solution) is a small molecule antiviral drug to treat acute COVID-19 and is in the pre-IND stage of development. TNX-102 SL4 , (cyclobenzaprine HCl sublingual tablets), is a small molecule drug being developed to treat Long COVID, a chronic post-COVID condition. Tonix expects to initiate a Phase 2 study in Long COVID in the first half of 2022. The Company’s CNS portfolio includes both small molecules and biologics to treat pain, neurologic, psychiatric and addiction conditions. Tonix’s lead CNS candidate, TNX-102 SL, is in mid-Phase 3 development for the management of fibromyalgia with a new Phase 3 study expected to start in the first half of 2022. Finally, TNX-13005 is a biologic designed to treat cocaine intoxication that is expected to start a Phase 2 trial in the first quarter of 2022.

1TNX-1500 is an investigational new biologic at the pre-IND stage of development and has not been approved for any indication.
2TNX-1800 is an investigational new biologic at the pre-IND stage of development and has not been approved for any indication. TNX-1800 is based on TNX-801, live horsepox virus vaccine for percutaneous administration, which is in development to protect against smallpox and monkeypox. TNX-801 is an investigational new biologic and has not been approved for any indication.
3TNX-3500 is an investigational new drug at the pre-IND stage of development and has not been approved for any indication.
4TNX-102 SL is an investigational new drug and has not been approved for any indication.
5TNX-1300 is an investigational new biologic and has not been approved for any indication.

This press release and further information about Tonix can be found at www.tonixpharma.com.

Forward-Looking Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “forecast,” “estimate,” “expect,” and “intend,” among others. These forward-looking statements are based on Tonix’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks related to the development of TNX-1900; the failure to obtain FDA clearances or approvals and noncompliance with FDA regulations; delays and uncertainties caused by the global COVID-19 pandemic; risks related to the timing and progress of clinical development of our product candidates; our need for additional financing; uncertainties of patent protection and litigation; uncertainties of government or third party payor reimbursement; limited research and development efforts and dependence upon third parties; and substantial competition. As with any pharmaceutical under development, there are significant risks in the development, regulatory approval and commercialization of new products. Tonix does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2021, and periodic reports filed with the SEC on or after the date thereof. All of Tonix’s forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The information set forth herein speaks only as of the date thereof.

Contacts

Jessica Morris (corporate)
Tonix Pharmaceuticals
investor.relations@tonixpharma.com 
(212) 688-9421

Olipriya Das, Ph.D. (media)
Russo Partners
olipriya.das@russopartnersllc.com 
(646) 942-5588

Peter Vozzo (investors)
ICR Westwicke
peter.vozzo@westwicke.com 
(443) 213-0505

Source: Tonix Pharmaceuticals Holding Corp.

Release – Vectrus Announces Fourth Quarter and Full-Year 2021 Results

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Vectrus Announces Fourth Quarter and Full-Year 2021 Results

Research, News, and Market Data on Vectrus

 

– 2021 revenue +28% Y/Y to $1,784 million; Q4 revenue +18% Y/Y to $419.4 million
– 2021 Operating income of $62.0 million; Adjusted EBITDA margin¹ of 4.7%
– 2021 fully diluted EPS of $3.86; Q4 fully diluted EPS of $0.63
– 2021 Adjusted diluted EPS¹ of $4.77; Q4 Adjusted diluted EPS¹ of $0.90
– Strong 2021 operating cash flow generation of $61.3 million
– Backlog of $5.0 billion; Several new wins expand market diversity
– Separately announces Definitive Agreement to combine with Vertex
– Conference call changed to today, March 7th, 8:00 AM E.T.

COLORADO SPRINGS, Colo., March 7, 2022 /PRNewswire/ — Vectrus, Inc. (NYSE:VEC) announced fourth quarter and full-year 2021 financial results.

“This year, Vectrus continued its strong momentum in the converged market, and our financial results for the fourth quarter and full-year 2021 underscore the successful execution of our growth strategy with year-on-year total and organic revenue growth of approximately 28% and 10%, respectively,” said Chuck Prow, Chief Executive Officer of Vectrus. “Our team showcased its agility to meet the unique needs of our clients by successfully supporting several important missions, including Pacific Defender, a major contingency task order in INDOPACOM, supporting the Afghanistan refugee mission to support the Non-Combatant Evacuation Operation as well as supporting the Department of Defense with the establishment of a water supply system for military housing at Red Hill, Hawaii. Additionally, we demonstrated our ability to support operations of larger size and scope by phasing in all the CENTCOM task orders under the LOGCAP V Contract. These task orders provide substantial revenue visibility for the next several years.”

“This year, we also won the five-year, $44 million AFCAP V Saudi Foreign Military Sales Task Order, our first win in the Kingdom of Saudi Arabia, to provide base operation support to the Air Force, and we finished the year by winning the Fort Benning Logistics Support task order, a five-year, $250 million award under the Enhanced Army Global Logistics Enterprise (EAGLE) IDIQ Contract. Fort Benning is one of the DoD’s Power Projection Platforms, that supports the Army’s ability to strategically deploy its high priority active and reserve component units. This award builds on our existing EAGLE task order to support the Logistics Readiness Center at Fort Bragg, another power projection platform, that has recently supported the deployment of troops to the European Area of Operation.”

“Subsequent to the fourth quarter, Vectrus was selected to complete the final phases of application development for the 5G Naval Base Coronado Smart Warehouse. This effort is part of the DoD’s $600 million 5G experimentation and testing initiative, originally awarded in 2020. Vectrus successfully demonstrated a Converged Environment solution, addressing NAVSUP operational challenges through the implementation of advanced technology applications. The Smart Warehouse is a continued demonstration of our Converged Environment portfolio of mission essential solutions, which integrate base operations support, supply chain and logistics, IT and network operations, engineering and digital integration, and security, to help increase efficiency, reduce costs, improve readiness and cybersecurity, and strengthen national security. We look forward to bringing next-generation efficiencies to the naval logistics operations.”

Prow concluded, “All of these impressive accomplishments are a testament to our teams’ 24/7 dedication to our clients and supporting their critical missions.”

Fourth Quarter 2021 Results

“Our fourth quarter and full-year 2021 financial results demonstrate the resilience of our business model and commitment to maintaining a strong balance sheet,” said Susan Lynch, Senior Vice President and Chief Financial Officer. “We are pleased to finish 2021 in a strong financial position, with organic revenue growth and significant cash generation, and we are excited to build on this momentum in 2022.”

Fourth quarter revenue was $419 million up 18% year-on-year as compared to the same period last year. Revenue grew year-on-year as a result of the company’s two acquisitions on December 31, 2020. Organic revenue grew by $3.2 million, or 0.9%, reflecting the transition to LOGCAP V Kuwait and Iraq task orders and completion of certain programs, including the Afghanistan Evacuation Operation.

Operating income was $10.0 million or 2.4% margin. M&A and integration related expenses were $1.0 million and the amortization of acquired intangible assets were $2.5 million. Adjusted operating income1 was $13.6 million or 3.2% margin. EBITDA1 was $14.3 million, or 3.4% margin. Adjusted EBITDA1 was $15.3 million, with a margin of 3.6%, compared to $17.9 million and 5.0% in 2020. The year-on-year margin was impacted by the phase-in of new awards, program completions, contract mix and considerable material and pass through content which carries a lower margin.

Fully diluted EPS was $0.63, reflecting the above-mentioned M&A and integration-related costs. Adjusted diluted EPS1 for the fourth quarter was $0.90 as compared to $1.25 in 2020. Adjusted diluted EPS1 was impacted by lower margins in the quarter, higher interest expense due to the company’s two acquisitions in December 2020 and higher depreciation expense.

Full-Year 2021 Results

Full-year revenue was $1.784 billion, up 28% year-on-year.  Organic revenue increased 10% in 2021, driven by new contract wins, base expansion, and phase-ins. The Company reported operating income of $62.0 million, with an operating margin of 3.5%,  Adjusted operating income1 was $76.6 million, with a 4.3% margin, which is an improvement from $52.2 million and 3.7% from the prior year. The increase in operating income resulted from the acquisitions of Zenetex and HHB and improved program performance throughout the year.

Full-year EBITDA1 was $78.6 million and a margin of 4.4%.  Adjusted EBITDA1 was $83.1 million with a 4.7% margin.

Full-year diluted EPS was $3.86, favorably impacted by the recognition of tax credits from prior years. Adjusted diluted EPS1 for 2021 was $4.77, as compared to $3.36 in 2020.

Cash provided by operating activities for the year were $61.3 million, compared to $64.1 million in 2020. Cash flow in the prior year benefitted from the CARES Act by $13.2 million. Lynch continued, “our strong cash generation is due to efficient collections and working capital management on programs. Excluding the prior year benefit of the CARES Act payroll tax deferrals, year-to-date cash flow from operations improved 20% over last year.”

During the year, Vectrus lowered its debt balance by $73.6 million resulting in an ending balance of $105.4 million.  Cash at year-end was $38.5 million down from $66.9 million.  Total liquidity as of December 31, 2021, was more than $200 million. Total consolidated indebtedness to consolidated EBITDA1 (total leverage ratio) was 1.20x.

Total backlog as of December 31, 2021 was $5 billion and funded backlog was $1 billion. The trailing twelve-month book-to-bill was 1.0x.

2022 Guidance

Guidance for 2022 is as follows:

$ millions, except for EBITDA margins and per share amounts

2022 Guidance

2022 Mid-Point

Revenue

$1,820

to

$1,860

$1,840

Operating Income Margin

3.4  %

to

3.6  %

3.5  %

Adjusted EBITDA Margin1

4.5  %

to

4.7  %

4.6  %

Earnings Per Share

$3.72

to

$4.08

$3.90

Adjusted Diluted Earnings Per Share1

$4.57

to

$4.93

$4.74

Net Cash Provided by Operating Activities

$50.0

to

$53.5

$51.75

Forward-looking statements are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the Safe Harbor Statement below. 

Vertex Transaction and Conference Call Information

In a separate press release issued today, Vectrus announced that it has entered into an all-stock merger transaction with The Vertex Company to create a leading global provider of mission-essential solutions. The merger is expected to close in the third quarter of 2022, subject to satisfaction of customary closing conditions, including receipt of regulatory and Vectrus shareholder approvals.

As a result of this announcement, management will conduct a conference call with analysts and investors at 8:00 a.m. ET on Monday, March 7, 2022. U.S.-based participants may dial in to the conference call at 877-407-0792, while international participants may dial 201-689-8263. A live webcast of the conference call as well as an accompanying slide presentation will be available on the Vectrus Investor Relations website at http://investors.vectrus.com or https://www.webcaster4.com/Webcast/Page/1431/44827.

A replay of the conference call will be posted on the Vectrus website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through March 21, 2022, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13727760. 

Footnotes:
1 See “Key Performance Indicators and Non-GAAP Financial Measures” for reconciliation.

About Vectrus

For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

FORWARD-LOOKING STATEMENTS

Certain material presented in this press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, Vectrus may be unable to obtain shareholder approval as required for the Transaction; conditions to the closing of the Transaction may not be satisfied; the possibility that anticipated benefits of the Transaction may not be realized or may take longer to realize than expected; the possibility that costs related to Vectrus’s integration of Vertex’s operations may be greater than expected and/or that revenues following the Transaction may be lower than expected; Vectrus’s business may suffer as a result of uncertainty surrounding the Transaction and disruption of management’s attention due to the Transaction; the outcome of any legal proceedings that arise that are related to the Transaction; Vectrus may be adversely affected by other economic, business, and/or competitive factors; the risk that Vectrus may be unable to obtain governmental and regulatory approvals required for the Transaction, or that required governmental and regulatory approvals may delay the Transaction or result in the imposition of conditions that could reduce the anticipated benefits from the Transaction or cause the parties to abandon the Transaction; the impact of legislative, regulatory, competitive and technological changes; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the effect of the Transaction on the ability of Vectrus to retain and maintain relationships with both Vectrus’s and Vertex’s customers, including the U.S. Government; other risks to the consummation of the merger, including the risk that the merger will not be consummated within the expected time period or at all; responses from customers and competitors to the Transaction; the risk that the integration of Vertex may distract management from other important matters; results from the Transaction may be different than those anticipated; statements about Vectrus’s 2022 performance outlook, five-year growth plan, revenue, DSO, contract opportunities, the impacts of COVID-19, and any discussion of future operating or financial performance.

Whenever used, words such as “may,” “are considering,” “will,” “likely,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “could,” “potential,” “continue,” “goal” or similar terminology are forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management.

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information and Where to Find It

In connection with the Transaction, Vectrus plans to file with the SEC and mail or otherwise provide to its shareholders a proxy statement/prospectus regarding the Transaction. BEFORE MAKING ANY VOTING DECISION, VECTRUS’S SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY VECTRUS WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and shareholders will be able to obtain a free copy of the proxy and other documents containing important information about Vectrus and Vertex, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Vectrus makes available free of charge at www.vectrus.com (in the “Investors” section), copies of materials it files with, or furnishes to, the SEC.

Participants in Solicitation

Vectrus, its directors and certain of its respective executive officers may be considered participants in the solicitation of proxies in connection with the Transaction. Information about the directors and executive officers of Vectrus is set forth in Vectrus’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on March 2, 2021, and its definitive proxy statement for the 2021 annual meeting of shareholders, which was filed with the SEC on March 23, 2021, certain of its Quarterly Reports on Form 10-Q and certain of its Current Reports filed on Form 8-K. To the extent the holdings of securities of Vectrus by Vectrus’s directors and executive officers have changed since the amounts set forth in Vectrus’s proxy statement for its 2021 annual meeting of shareholders, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of such individuals in the Transaction will be included in the proxy statement/prospectus relating to the Transaction when it is filed with the SEC. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, may be obtained by reading the definitive proxy statement regarding the acquisition described above.

 

VECTRUS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME





Year Ended December 31,

(In thousands, except per share data)

2021

2020

2019

Revenue

$   1,783,665

$   1,395,529

$   1,382,525

Cost of revenue

1,623,245

1,271,375

1,254,560

Selling, general, and administrative expenses

98,400

80,679

78,316

Operating income

62,020

43,475

49,649

Interest expense, net

(7,985)

(4,793)

(6,470)

Income from operations before income taxes

54,035

38,682

43,179

Income tax expense

8,307

1,731

10,003

Net income

$        45,728

$        36,951

$        33,176







Earnings per share





Basic

$           3.91

$            3.19

$            2.90

Diluted

$           3.86

$            3.14

$            2.86

Weighted average common shares outstanding – basic

11,705

11,599

11,444

Weighted average common shares outstanding – diluted

11,836

11,751

11,612

 

VECTRUS, INC. 

CONSOLIDATED BALANCE SHEETS





December 31,

(In thousands, except per share data)

2021

2020

Assets



Current assets



Cash and cash equivalents

$           38,513

$           66,949

Restricted cash

—

1,778

Receivables

348,605

314,959

Prepaid expenses

21,160

16,083

Other current assets

15,062

8,619

Total current assets

423,340

408,388

Property, plant, and equipment, net

23,758

22,573

Goodwill

321,734

339,702

Intangible assets, net

66,582

48,105

Right-of-use assets

43,651

18,718

Other non-current assets

10,394

6,325

Total non-current assets

466,119

435,423

Total Assets

$         889,459

$         843,811

Liabilities and Shareholders’ Equity



Current liabilities



Accounts payable

$         212,533

$         159,586

Compensation and other employee benefits

80,284

79,568

Short-term debt

10,400

8,600

Other accrued liabilities

55,031

40,657

Total current liabilities

358,248

288,411

Long-term debt, net

94,246

168,751

Deferred tax liability

32,214

39,386

Operating lease liability

34,536

13,970

Other non-current liabilities

20,128

28,355

 Total non-current liabilities

181,124

250,462

Total liabilities

539,272

538,873

Commitments and contingencies (Note 15)



 Shareholders’ Equity



Preferred stock; $0.01 par value; 10,000 shares authorized; No shares issued and outstanding

—

—

Common stock; $0.01 par value; 100,000 shares authorized; 11,738 and 11,625 shares issued and outstanding as of December 31, 2021 and 2020, respectively                                      

117

116

Additional paid in capital

88,116

82,823

Retained earnings

267,754

222,026

Accumulated other comprehensive loss

(5,900)

(27)

Total shareholders’ equity

350,087

304,938

Total Liabilities and Shareholders’ Equity

$         889,459

$         843,811

 

VECTRUS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS





Year Ended December 31,

(In thousands)

2021

2020

2019

Operating activities





Net income

$

45,728

$

36,951

$

33,176

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

Depreciation expense

6,526

4,097

3,379

Amortization of intangible assets

10,028

4,029

3,111

(Gain) loss on disposal of property, plant, and equipment

65

(14)

62

Stock-based compensation

8,331

9,445

8,262

Amortization of debt issuance costs

912

386

404

Changes in assets and liabilities:





Receivables

(36,376)

1,000

(21,053)

Prepaid expenses

(5,178)

(3,588)

(5,610)

Other assets

(7,667)

(3,644)

7,147

Accounts payable

56,985

(2,680)

(11,733)

Deferred taxes

(7,280)

(10,665)

(7,173)

Compensation and other employee benefits

1,133

12,004

9,652

Other liabilities

(11,868)

16,760

7,933

Net cash provided by operating activities

61,339

64,081

27,557

Investing activities





Purchases of capital assets and intangibles

(9,776)

(4,500)

(16,151)

Proceeds from the disposition of assets

16

84

5,400

Acquisition of business, net of cash acquired

262

(133,609)

(45,074)

Contribution to joint venture

(3,145)

—

—

Net cash (used in) investing activities

(12,643)

(138,025)

(55,825)

Financing activities





Repayments of long-term debt

(8,600)

(6,500)

(4,500)

Proceeds from revolver

529,000

314,000

333,500

Repayments of revolver

(594,000)

(199,000)

(333,500)

Proceeds from exercise of stock options

379

59

3,672

Payment of debt issuance costs

(17)

(830)

—

Payments of employee withholding taxes on share-based compensation

(2,347)

(1,955)

(1,068)

Net cash provided by (used in) financing activities

(75,585)

105,774

(1,896)

Exchange rate effect on cash

(3,325)

1,579

(663)

Net change in cash, cash equivalents and restricted cash

(30,214)

33,409

(30,827)

Cash, cash equivalents and restricted cash – beginning of year

68,727

35,318

66,145

Cash, cash equivalents and restricted cash – end of year

$

38,513

$

68,727

$

35,318

Supplemental Disclosure of Cash Flow Information:





Interest paid

$

5,801

$

3,717

$

6,229

Income taxes paid

$

9,703

$

14,520

$

4,511

Purchase of capital assets on account

$

277

$

2,226

$

556

Non-GAAP Measures

This press release includes certain non-GAAP financial measures, including EBITDA and Pro forma Adjusted EBITDA. These financial measures are not prepared in accordance with accounting principles generally accepted in the United States and may be different from non-GAAP financial measures used by other companies. Vertex and Vectrus believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP measures with comparable names should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP.

 

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







($K, except per share data)

Three Months Ended December 31, 2021

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Three Months Ended December 31, 2021 – Adjusted













Revenue

$       419,409

$                      —

$                     —

$                     —

$                     —

$       419,409

Growth

18.0%








18.0%

Operating income

$         10,017

$                1,039

$                       4

$               2,507

$                     —

$         13,567

Operating margin

2.4%








3.2%













Interest expense, net

$          (1,845)

$                      —

$                     —

$                     —

$                     —

$          (1,845)













Income from operations before income taxes

$            8,172

$                1,039

$                       4

$               2,507

$                     —

$         11,722













Income tax expense

$               685

$                     87

$                     —

$                  210


$              982

Income tax rate

8.4%








8.4%













Net income

$            7,487

$                   952

$                       4

$               2,297

$                     —

$         10,740













Weighted average common shares outstanding, diluted

11,880








11,880













Diluted earnings per share

$              0.63

$                  0.08

$                     —

$                 0.19

$                     —

$             0.90













EBITDA (Non-GAAP Measures)











($K)

Three Months Ended December 31, 2021

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization
of Acquired  Intangible Assets

Prior Years’ Tax Credits

Three Months Ended December 31, 2021 – Adjusted

Operating Income

$         10,017

$                1,039

$                       4

$               2,507

$                     —

$         13,567













Add:











Depreciation and amortization

$            4,245

$                      —

$                     —

$            (2,507)

$                     —

$           1,738













EBITDA

$         14,262

$                1,039

$                       4

$                     —

$                     —

$         15,305

EBITDA Margin

3.4%








3.6%

 

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







($K, except per share data)

Three Months Ended December 31, 2020

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Three Months Ended December 31, 2020 – Adjusted













Revenue

$       355,317

$                     —

$                     —

$                     —

$                     —

$       355,317













Operating income

$         13,725

$               1,960

$                   120

$                   998

$                     —

$         16,803

Operating margin

3.9%








4.7%













Interest expense, net

$              (806)

$                     —

$                     —

$                     —

$                     —

$             (806)













Income from operations before income taxes

$         12,919

$               1,960

$                   120

$                   998

$                     —

$         15,997













Income tax expense

$          (3,862)

$                   451

$                     28

$                   169

$               4,505

$           1,291

Income tax rate

(29.9)%








8.1%













Net income

$         16,781

$               1,509

$                     92

$                   829

$            (4,505)

$         14,706













Weighted average common shares outstanding, diluted

11,782








11,782













Diluted earnings per share

$              1.42

$                 0.13

$                 0.01

$                 0.07

$              (0.38)

$              1.25













EBITDA (Non-GAAP Measures)











($K)

Three Months Ended December 31, 2020

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Three Months Ended December 31, 2020 – Adjusted

Operating Income

$         13,725

$               1,960

$                   120

$                   998

$                     —

$         16,803













Add:











Depreciation and amortization

$            2,094

$                     —

$                     —

$               (998)

$                     —

$           1,096













EBITDA

$         15,819

$               1,960

$                   120

$                     —

$                     —

$         17,899

EBITDA Margin

4.5%








5.0%

 

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





($K, except per share data)

Twelve Months
Ended December 31, 2021

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Twelve Months
Ended December 31, 2021 – Adjusted













Revenue

$    1,783,665

$                     —

$                     —

$                     —

$                     —

$    1,783,665

Growth

27.8%








27.8%

Operating income

$         62,020

$               4,323

$                   192

$             10,028

$                     —

$         76,563

Operating margin

3.5%








4.3%













Interest expense, net

$          (7,985)

$                     —

$                     —

$                     —

$                     —

$          (7,985)













Income from operations before income taxes

$         54,035

$               4,323

$                   192

$             10,028

$                     —

$         68,578













Income tax expense

$            8,307

$                   665

$                     30

$               1,542

$               1,524

$         12,068

Income tax rate

15.4%








17.6%













Net income

$         45,728

$               3,658

$                   162

$               8,486

$            (1,524)

$         56,510













Weighted average common shares outstanding, diluted

11,836








11,836













Diluted earnings per share

$              3.86

$                 0.31

$                 0.01

$                 0.72

$              (0.13)

$              4.77













EBITDA (Non-GAAP Measures)











($K)

Twelve Months
Ended December 31, 2021

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Twelve Months
Ended December 31, 2021 – Adjusted

Operating Income

$         62,020

$               4,323

$                   192

$             10,028

$                     —

$         76,563













Add:











Depreciation and amortization

$         16,554

$                     —

$                     —

$          (10,028)

$                     —

$           6,526













EBITDA

$         78,574

$               4,323

$                   192

$                     —

$                     —

$         83,089

EBITDA Margin

4.4%








4.7%

 

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





($K, except per share data)

Twelve Months
Ended December 31, 2020

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Twelve Months
Ended December 31, 2020 – Adjusted













Revenue

$    1,395,529

$                     —

$                     —

$                     —

$                     —

$    1,395,529













Operating income

$         43,475

$               4,367

$                   345

$               4,029

$                     —

$         52,216

Operating margin

3.1%








3.7%













Interest expense, net

$          (4,793)

$                     —

$                     —

$                     —

$                     —

$          (4,793)













Income from operations before income taxes

$         38,682

$               4,367

$                   345

$               4,029

$                     —

$         47,423













Income tax expense

$            1,731

$               1,004

$                     76

$                   681

$               4,505

$           7,997

Income tax rate

4.5%








16.9%













Net income

$         36,951

$               3,363

$                   269

$               3,348

$            (4,505)

$         39,426













Weighted average common shares outstanding, diluted

11,751








11,751













Diluted earnings per share

$              3.14

$                 0.29

$                 0.02

$                 0.28

$              (0.38)

$              3.36













EBITDA (Non-GAAP Measures)











($K)

Twelve Months
Ended December 31, 2020

M&A,
Integration
and Related Costs

LOGCAP V
Pre-
Operational Legal Costs

Amortization of Acquired  Intangible Assets

Prior Years’ Tax Credits

Twelve Months
Ended December 31, 2020 – Adjusted

Operating Income

$         43,475

$               4,367

$                   345

$               4,029

$                     —

$         52,216













Add:











Depreciation and amortization

$            8,126

$                     —

$                     —

$              (4,029)

$                     —

$           4,097













EBITDA

$         51,601

$               4,367

$                   345

$                     —

$                     —

$         56,313

EBITDA Margin

3.7%








4.0%

 

Three Months Ended

Three Months Ended

Three Months Ended


December 31, 2021

December 31, 2021

December 31, 2021

($K)

 As Reported

Zenetex & HHB

Organic







Revenue

$                   419,409

$                     60,880

$                        358,529









Three Months Ended

Three Months Ended

Three Months Ended


December 31, 2020

December 31, 2020

December 31, 2020

($K)

As Reported

Zenetex & HHB

Organic







Revenue

$                   355,317

$                            —

$                        355,317







Organic Revenue $




$                            3,212

Organic Revenue %




0.9%









Twelve Months Ended

Twelve Months Ended

Twelve Months Ended


December 31, 2021

December 31, 2021

December 31, 2021

($K)

As Reported

Zenetex & HHB

Organic







Revenue

$                1,783,665

$                   255,340

$                     1,528,325









Twelve Months Ended

Twelve Months Ended

Twelve Months Ended


December 31, 2020

December 31, 2020

December 31, 2020

($K)

As Reported

Zenetex & HHB

Organic







Revenue

$                1,395,529

$                            —

$                     1,395,529







Organic Revenue $




$                        132,796

Organic Revenue %




9.5%

SUPPLEMENTAL INFORMATION

Revenue by client branch, contract type, contract relationship, and geographic region for the periods presented below was as follows: 

Revenue by Client











Year Ended December 31,

(In thousands)

2021

%

2020

%

2019

%

Army

$      1,134,849

64%

$         965,558

69%

$      958,582

69%

Air Force

266,291

15%

299,272

21%

306,767

22%

Navy

224,407

13%

68,748

5%

56,236

4%

Other

158,118

8%

61,951

5%

60,940

5%

Total revenue

$      1,783,665


$      1,395,529


$      1,382,525













Revenue by Contract Type











Year Ended December 31,

(In thousands)

2021

%

2020

%

2019

%

Cost-plus and cost-reimbursable

$      1,271,167

71%

$         955,506

68%

$      1,015,963

73%

Firm-fixed-price

452,112

25%

403,994

29%

334,510

24%

Time and material

$           60,386

4%

$           36,029

3%

$           32,052

3%

Total revenue

$      1,783,665


$      1,395,529


$      1,382,525













Revenue by Contract Relationship











Year Ended December 31,

(In thousands)

2021

%

2020

%

2019

%

Prime contractor

$      1,663,828

93%

$      1,324,628

95%

$      1,312,928

95%

Subcontractor

119,837

7%

70,901

5%

69,597

5%

Total revenue

$      1,783,665


$      1,395,529


$      1,382,525













Revenue by Geographic Region











Year Ended December 31,

(In thousands)

2021

%

2020

%

2019

%

Middle East

$      1,000,877

57%

$         902,162

65%

$         939,685

68%

United States

578,255

32%

328,214

24%

301,991

22%

Europe

142,606

8%

155,169

10%

137,915

10%

Asia

61,927

3%

9,984

1%

2,934

—%

Total revenue

$      1,783,665


$      1,395,529


$      1,382,525

 

CONTACT:

Vectrus
Mike Smith, CFA
719-637-5773
michael.smith@vectrus.com

SOURCE Vectrus, Inc.

Release – Vectrus and Vertex to Combine Creating a Global Leader in Mission-Essential Solutions

Posted on by Admin

 


Vectrus and Vertex to Combine, Creating a Global Leader in Mission-Essential Solutions

Research, News, and Market Data on Vectrus

 

Creates a Leading Government Services Company with 2021 Pro Forma Revenue of Approximately $3.4 Billion, Backlog of Approximately $11.3 Billion, and Adjusted EBITDA of Approximately $283 Million
Expected Annualized Cost Synergies of $20 Million, Resulting in Adjusted EBITDA Margin of More Than 8%
Broadens Portfolio of Solutions and Technologies to Provide Full Life-Cycle Support Across the Converged Environment
Transaction Expected to be Accretive to Adjusted EPS and Free Cash Flow per Share in First Full Year Post-Closing
Companies to Host Conference Call Today at 8:00 A.M. ET

COLORADO SPRINGS, Colo. and MADISON, Miss., March 7, 2022 /PRNewswire/ — Vectrus, Inc. (NYSE: VEC) and The Vertex Company (“Vertex”) today announced that they have entered into an all-stock merger to create a leading global provider of mission-essential solutions.

The combined company will offer significantly expanded technology and service capabilities, delivering a comprehensive suite of integrated solutions and critical service offerings to support national security readiness and modernization initiatives around the world. As U.S. and allied government clients move toward a converged environment, the combined company will be well positioned to meet the mission-essential requirements of its clients while delivering cost savings, increased security and resiliency, and more strategic use of resources.

Together, the combined company would have 2021 pro forma revenue of approximately $3.4 billion and adjusted EBITDA of approximately $283 million, inclusive of $20 million of estimated cost synergies, resulting in an adjusted EBITDA margin of more than 8%. With pro forma backlog of approximately $11.3 billion, the company has high revenue visibility and will benefit from increased scale, balance and diversity. With significant cash flow generation and a strong balance sheet, the combined company will retain flexibility for continued growth.

“The combination of Vectrus and Vertex will create a stronger, more diversified company and one of the leading providers of critical mission solutions and support to defense clients globally,” said Chuck Prow, Chief Executive Officer of Vectrus. “This highly strategic transaction builds on both companies’ accomplishments over the last several years and significantly accelerates our ability to deliver converged solutions while providing enhanced value for our shareholders and other stakeholders.”

Prow continued, “With increased scale and meaningful synergies, the combined company will be more competitive in the national security environment while enhancing the delivery of services to our federal clients. We look forward to combining the strengths of our businesses and teams to build upon both companies’ proud track records of providing critical mission support for our clients’ toughest operational challenges.”

Ed Boyington, President and CEO of Vertex, said, “Vertex and Vectrus share mission-oriented foundations and cultural alignment. By joining forces with Vectrus, we will be better positioned to help the Department of Defense and government agencies achieve their objectives, and in the process, create a stronger organization with greater career development and advancement opportunities for our employees. On behalf of the Vertex team, we remain dedicated to our clients’ missions, and we are very pleased to enter this new phase of growth as a combined company.”

Creating a Differentiated Industry Leader

  • Greater Scale and Improved Competitive Positioning  –  The combination creates a stronger company with greater scale and enhanced ability to compete for more integrated business opportunities. The company will benefit from a more diversified revenue base across geographies, clients, and contract types in supporting missions for the U.S. Department of Defense and other government agencies. The combined company’s contract portfolio will also be more balanced across all agencies served. 
  • Enhanced Portfolio of Technologies and Solutions  – The combined company will be uniquely positioned to better provide full life-cycle support to the most critical and enduring missions. The complementary breadth of capabilities builds on each company’s leading position in their respective markets.
  • Attractive Financial Profile  and Efficient Capital Structure –The transaction is expected to be accretive to Vectrus’s adjusted diluted earnings and free cash flow per share in the first full year following close. The combined company will have significant revenue visibility and expects to generate substantial free cash flow and a pro forma adjusted EBITDA margin profile of more than 8% initially, with plans to improve margins going forward. The combined company will maintain its low capital expenditure business model and benefit from significant tax attributes, allowing for rapid debt reduction. The company will target long-term net debt to EBITDA of 2.0 to 3.0x.
  • Clearly Identified Cost Synergies and Incremental Revenue Opportunities  – The combined company is expected to achieve approximately $20 million in annualized pre-tax net cost synergies by 2024 through efficiencies in supply chain and contract management, shared IT infrastructure, business systems right-sizing, and general corporate costs. The combined capabilities also will create meaningful incremental revenue growth opportunities across the company’s key addressable markets in operations and logistics, aerospace, training, and technology.

Transaction Terms

Under the terms of the merger agreement, Vertex shareholders will own approximately 62% of the combined company on a fully diluted basis, while Vectrus shareholders will own approximately 38%. The transaction implies a value for Vertex of approximately $2.1 billion, or approximately 9.5x 2021 adjusted EBITDA net of $20 million of cost synergies and the present value of Vertex’s existing tax attributes of approximately $160 million.

Leadership and Governance

Upon closing of the transaction, Mr. Prow, CEO of Vectrus, will serve as CEO of the combined company, and Susan Lynch, CFO of Vectrus, will serve as CFO. The broader leadership team will be comprised of executives from both companies.

The combined company’s Board of Directors will be comprised of 11 members, six directors from the current Vectrus board, including Mr. Prow, and five directors appointed by Vertex, including Mr. Boyington, President and CEO of Vertex. An independent member of the current Vectrus Board of Directors will serve as Chairman. The combined company plans to announce the members of the Board of Directors prior to closing.

The combined company will introduce a new name post-closing and will maintain its listing on the NYSE. The company will be headquartered in Northern Virginia, with a significant operating presence maintained in other key locations in the U.S. and around the world.

Shareholder Rights

At closing of the transaction, Vectrus will enter into a shareholders agreement containing certain rights and other terms relating to American Industrial Partners Capital Fund VI LP (AIP) shareholdings following the transaction, including board designation rights that adjust as AIP and the other Vertex shareholders reduce their ownership. Other terms include, among other things, that AIP will be subject to a standstill agreement for so long as it retains board designation rights and that AIP and Vertex’s other shareholders will be subject to a six-month lockup agreement and thereafter will have customary registration rights.

Financing and Approvals

The merger, which was unanimously approved by the Vectrus Board of Directors, is expected to close in the third quarter of 2022, subject to satisfaction of customary closing conditions, including receipt of regulatory and Vectrus shareholder approvals.

Vertex’s capital structure will remain in place and the companies anticipate refinancing Vectrus’s existing debt as part of an upsized Vertex debt capital structure at close.

Vectrus Fourth Quarter and Full-Year 2021 Results

In a separate press release issued today, Vectrus reported its fourth quarter and full-year 2021 financial results.

Advisors

Goldman Sachs & Co. LLC is acting as exclusive financial advisor to Vectrus, and Skadden, Arps, Slate, Meagher & Flom LLP and Covington & Burling LLP are acting as legal counsel. Vectrus was also advised by Ernst & Young and Wolf Den Associates. RBC Capital Markets, LLC and Evercore are acting as financial advisors to Vertex, and Jones Day, Baker Botts LLP and Ropes & Gray LLP are acting as legal counsel. Vertex was also advised by Fairmont Consulting Group.

Conference Call

Management will conduct a conference call with analysts and investors at 8:00 a.m. E.T. today, March 7, 2022. U.S.-based participants may dial in to the conference call at 877-407-0792, while international participants may dial 201-689-8263. A live webcast of the conference call as well as an accompanying slide presentation will be available on the Vectrus Investor Relations website at investors.vectrus.com or https://www.webcaster4.com/Webcast/Page/1431/44827.

A replay of the conference call will be posted on the Vectrus website shortly after completion of the call and will be available for one year. A telephonic replay will also be available at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13727760. 

About Vectrus

For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair, and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of approximately $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

About Vertex

The Vertex Company is headquartered in Madison, Mississippi and employs approximately 6,000 employees, over 40 percent of whom are Armed Forces veterans, operating in over 125 locations worldwide. Vertex delivers integrated turnkey lifecycle support from concept definition, to engineering and manufacturing, through end of life support of complex systems and platforms, Vertex offerings include all levels of aviation maintenance, worldwide contractor logistics support, systems engineering and integration, specialized onsite mission execution, high consequence training programs for defense and commercial customers, and integrated supply-chain solutions. Over our 50-year history, we have perfected the balance of cost, schedule, and performance to offer high-quality solutions that consistently exceed customer requirements. Information about Vertex can be found at vtxco.com. Vertex is majority owned by American Industrial Partners Capital Fund VI LP (AIP), a fund managed by an operationally oriented private equity firm with $8 billion of assets under management (for more information on AIP visit americanindustrial.com).

FORWARD-LOOKING STATEMENTS.
Certain material presented in this press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, Vectrus may be unable to obtain shareholder approval as required for the Transaction; conditions to the closing of the Transaction may not be satisfied; the possibility that anticipated benefits of the Transaction may not be realized or may take longer to realize than expected; the possibility that costs related to Vectrus’s integration of Vertex’s operations may be greater than expected and/or that revenues following the Transaction may be lower than expected; Vectrus’s business may suffer as a result of uncertainty surrounding the Transaction and disruption of management’s attention due to the Transaction; the outcome of any legal proceedings that arise that are related to the Transaction; Vectrus may be adversely affected by other economic, business, and/or competitive factors; the risk that Vectrus may be unable to obtain governmental and regulatory approvals required for the Transaction, or that required governmental and regulatory approvals may delay the Transaction or result in the imposition of conditions that could reduce the anticipated benefits from the Transaction or cause the parties to abandon the Transaction; the impact of legislative, regulatory, competitive and technological changes; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the effect of the Transaction on the ability of Vectrus to retain and maintain relationships with both Vectrus’s and Vertex’s customers, including the U.S. Government; other risks to the consummation of the merger, including the risk that the merger will not be consummated within the expected time period or at all; responses from customers and competitors to the Transaction; the risk that the integration of Vertex may distract management from other important matters; results from the Transaction may be different than those anticipated; statements about Vectrus’s 2022 performance outlook, five-year growth plan, revenue, DSO, contract opportunities, the impacts of COVID-19, and any discussion of future operating or financial performance.

Whenever used, words such as “may,” “are considering,” “will,” “likely,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “could,” “potential,” “continue,” “goal” or similar terminology are forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management.

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information and Where to Find It
In connection with the Transaction, Vectrus plans to file with the SEC and mail or otherwise provide to its shareholders a proxy statement/prospectus regarding the Transaction. BEFORE MAKING ANY VOTING DECISION, VECTRUS’S SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY VECTRUS WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and shareholders will be able to obtain a free copy of the proxy and other documents containing important information about Vectrus and Vertex, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Vectrus makes available free of charge at www.vectrus.com (in the “Investors” section), copies of materials it files with, or furnishes to, the SEC.

Participants in Solicitation
Vectrus, its directors and certain of its respective executive officers may be considered participants in the solicitation of proxies in connection with the Transaction. Information about the directors and executive officers of Vectrus is set forth in Vectrus’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on March 2, 2021, and its definitive proxy statement for the 2021 annual meeting of shareholders, which was filed with the SEC on March 23, 2021, certain of its Quarterly Reports on Form 10-Q and certain of its Current Reports filed on Form 8-K. To the extent the holdings of securities of Vectrus by Vectrus’s directors and executive officers have changed since the amounts set forth in Vectrus’s proxy statement for its 2021 annual meeting of shareholders, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of such individuals in the Transaction will be included in the proxy statement/prospectus relating to the Transaction when it is filed with the SEC. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, may be obtained by reading the definitive proxy statement regarding the acquisition described above.

Non-GAAP Measures
This press release includes certain non-GAAP financial measures, including EBITDA and Pro forma Adjusted EBITDA. These financial measures are not prepared in accordance with accounting principles generally accepted in the United States and may be different from non-GAAP financial measures used by other companies. Vertex and the Company believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP measures with comparable names should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. 

Contact Information

Vectrus
Mike Smith, CFA
michael.smith@vectrus.com
(719) 637-5773

Or

Jim Golden / Scott Bisang / Tim Ragones
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

The Vertex Company
Rick Mendoza
Richard.mendoza@vtxco.com
(601) 607-6022

SOURCE Vectrus, Inc.

Ocugen (OCGN) – COVAXIN Pediatric EUA Declined But Majority of Expected Market Unaffected

Posted on by Admin

Monday, March 07, 2022

Ocugen (OCGN)
COVAXIN Pediatric EUA Declined, But Majority of Expected Market Unaffected

Ocugen Inc is a clinical stage biopharmaceutical company. It is focused on discovering, developing and commercializing a pipeline of innovative therapies that address rare and underserved eye diseases. Ocugen offers a diversified ophthalmology portfolio that includes novel gene therapies, biologics, and small molecules and targets a broad range of high-need retinal and ocular surface diseases.

Robert LeBoyer, Vice President, Research Analyst, Life Sciences, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

    FDA Has Denied The Pediatric Emergency Use Application (EUA).  Ocugen has announced that the FDA has declined its EUA for pediatric use in the ages 2 through 18 group. Although its approval would have been positive sign for full product BLA approval, we do not believe its denial will have any impact on the BLA for adult use.

    BLA Application for Adult Use Is Unaffected.  Ocugen did not give details about the reasons for the denial, only saying that it will “continue working with the FDA to evaluate the the regulatory pathway for COVAXIN.” We believe the FDA is highly unlikely to approve additional COVID-19 products under Emergency Use guidelines, and that the COVAXIN pediatric indication submission will be reviewed …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Vectrus and Vertex to Combine, Creating a Global Leader in Mission-Essential Solutions

Posted on by Admin

 


Vectrus and Vertex to Combine, Creating a Global Leader in Mission-Essential Solutions

Research, News, and Market Data on Vectrus

 

Creates a Leading Government Services Company with 2021 Pro Forma Revenue of Approximately $3.4 Billion, Backlog of Approximately $11.3 Billion, and Adjusted EBITDA of Approximately $283 Million
Expected Annualized Cost Synergies of $20 Million, Resulting in Adjusted EBITDA Margin of More Than 8%
Broadens Portfolio of Solutions and Technologies to Provide Full Life-Cycle Support Across the Converged Environment
Transaction Expected to be Accretive to Adjusted EPS and Free Cash Flow per Share in First Full Year Post-Closing
Companies to Host Conference Call Today at 8:00 A.M. ET

COLORADO SPRINGS, Colo. and MADISON, Miss., March 7, 2022 /PRNewswire/ — Vectrus, Inc. (NYSE: VEC) and The Vertex Company (“Vertex”) today announced that they have entered into an all-stock merger to create a leading global provider of mission-essential solutions.

The combined company will offer significantly expanded technology and service capabilities, delivering a comprehensive suite of integrated solutions and critical service offerings to support national security readiness and modernization initiatives around the world. As U.S. and allied government clients move toward a converged environment, the combined company will be well positioned to meet the mission-essential requirements of its clients while delivering cost savings, increased security and resiliency, and more strategic use of resources.

Together, the combined company would have 2021 pro forma revenue of approximately $3.4 billion and adjusted EBITDA of approximately $283 million, inclusive of $20 million of estimated cost synergies, resulting in an adjusted EBITDA margin of more than 8%. With pro forma backlog of approximately $11.3 billion, the company has high revenue visibility and will benefit from increased scale, balance and diversity. With significant cash flow generation and a strong balance sheet, the combined company will retain flexibility for continued growth.

“The combination of Vectrus and Vertex will create a stronger, more diversified company and one of the leading providers of critical mission solutions and support to defense clients globally,” said Chuck Prow, Chief Executive Officer of Vectrus. “This highly strategic transaction builds on both companies’ accomplishments over the last several years and significantly accelerates our ability to deliver converged solutions while providing enhanced value for our shareholders and other stakeholders.”

Prow continued, “With increased scale and meaningful synergies, the combined company will be more competitive in the national security environment while enhancing the delivery of services to our federal clients. We look forward to combining the strengths of our businesses and teams to build upon both companies’ proud track records of providing critical mission support for our clients’ toughest operational challenges.”

Ed Boyington, President and CEO of Vertex, said, “Vertex and Vectrus share mission-oriented foundations and cultural alignment. By joining forces with Vectrus, we will be better positioned to help the Department of Defense and government agencies achieve their objectives, and in the process, create a stronger organization with greater career development and advancement opportunities for our employees. On behalf of the Vertex team, we remain dedicated to our clients’ missions, and we are very pleased to enter this new phase of growth as a combined company.”

Creating a Differentiated Industry Leader

  • Greater Scale and Improved Competitive Positioning  –  The combination creates a stronger company with greater scale and enhanced ability to compete for more integrated business opportunities. The company will benefit from a more diversified revenue base across geographies, clients, and contract types in supporting missions for the U.S. Department of Defense and other government agencies. The combined company’s contract portfolio will also be more balanced across all agencies served. 
  • Enhanced Portfolio of Technologies and Solutions  – The combined company will be uniquely positioned to better provide full life-cycle support to the most critical and enduring missions. The complementary breadth of capabilities builds on each company’s leading position in their respective markets.
  • Attractive Financial Profile  and Efficient Capital Structure –The transaction is expected to be accretive to Vectrus’s adjusted diluted earnings and free cash flow per share in the first full year following close. The combined company will have significant revenue visibility and expects to generate substantial free cash flow and a pro forma adjusted EBITDA margin profile of more than 8% initially, with plans to improve margins going forward. The combined company will maintain its low capital expenditure business model and benefit from significant tax attributes, allowing for rapid debt reduction. The company will target long-term net debt to EBITDA of 2.0 to 3.0x.
  • Clearly Identified Cost Synergies and Incremental Revenue Opportunities  – The combined company is expected to achieve approximately $20 million in annualized pre-tax net cost synergies by 2024 through efficiencies in supply chain and contract management, shared IT infrastructure, business systems right-sizing, and general corporate costs. The combined capabilities also will create meaningful incremental revenue growth opportunities across the company’s key addressable markets in operations and logistics, aerospace, training, and technology.

Transaction Terms

Under the terms of the merger agreement, Vertex shareholders will own approximately 62% of the combined company on a fully diluted basis, while Vectrus shareholders will own approximately 38%. The transaction implies a value for Vertex of approximately $2.1 billion, or approximately 9.5x 2021 adjusted EBITDA net of $20 million of cost synergies and the present value of Vertex’s existing tax attributes of approximately $160 million.

Leadership and Governance

Upon closing of the transaction, Mr. Prow, CEO of Vectrus, will serve as CEO of the combined company, and Susan Lynch, CFO of Vectrus, will serve as CFO. The broader leadership team will be comprised of executives from both companies.

The combined company’s Board of Directors will be comprised of 11 members, six directors from the current Vectrus board, including Mr. Prow, and five directors appointed by Vertex, including Mr. Boyington, President and CEO of Vertex. An independent member of the current Vectrus Board of Directors will serve as Chairman. The combined company plans to announce the members of the Board of Directors prior to closing.

The combined company will introduce a new name post-closing and will maintain its listing on the NYSE. The company will be headquartered in Northern Virginia, with a significant operating presence maintained in other key locations in the U.S. and around the world.

Shareholder Rights

At closing of the transaction, Vectrus will enter into a shareholders agreement containing certain rights and other terms relating to American Industrial Partners Capital Fund VI LP (AIP) shareholdings following the transaction, including board designation rights that adjust as AIP and the other Vertex shareholders reduce their ownership. Other terms include, among other things, that AIP will be subject to a standstill agreement for so long as it retains board designation rights and that AIP and Vertex’s other shareholders will be subject to a six-month lockup agreement and thereafter will have customary registration rights.

Financing and Approvals

The merger, which was unanimously approved by the Vectrus Board of Directors, is expected to close in the third quarter of 2022, subject to satisfaction of customary closing conditions, including receipt of regulatory and Vectrus shareholder approvals.

Vertex’s capital structure will remain in place and the companies anticipate refinancing Vectrus’s existing debt as part of an upsized Vertex debt capital structure at close.

Vectrus Fourth Quarter and Full-Year 2021 Results

In a separate press release issued today, Vectrus reported its fourth quarter and full-year 2021 financial results.

Advisors

Goldman Sachs & Co. LLC is acting as exclusive financial advisor to Vectrus, and Skadden, Arps, Slate, Meagher & Flom LLP and Covington & Burling LLP are acting as legal counsel. Vectrus was also advised by Ernst & Young and Wolf Den Associates. RBC Capital Markets, LLC and Evercore are acting as financial advisors to Vertex, and Jones Day, Baker Botts LLP and Ropes & Gray LLP are acting as legal counsel. Vertex was also advised by Fairmont Consulting Group.

Conference Call

Management will conduct a conference call with analysts and investors at 8:00 a.m. E.T. today, March 7, 2022. U.S.-based participants may dial in to the conference call at 877-407-0792, while international participants may dial 201-689-8263. A live webcast of the conference call as well as an accompanying slide presentation will be available on the Vectrus Investor Relations website at investors.vectrus.com or https://www.webcaster4.com/Webcast/Page/1431/44827.

A replay of the conference call will be posted on the Vectrus website shortly after completion of the call and will be available for one year. A telephonic replay will also be available at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13727760. 

About Vectrus

For more than 70 years, Vectrus has provided critical mission support for our customers’ toughest operational challenges. As a high-performing organization with exceptional talent, deep domain knowledge, a history of long-term customer relationships, and groundbreaking technical expertise, we deliver innovative, mission-matched solutions for our military and government customers worldwide. Whether it’s base operations support, supply chain and logistics, IT mission support, engineering and digital integration, security, or maintenance, repair, and overhaul, our customers count on us for on-target solutions that increase efficiency, reduce costs, improve readiness, and strengthen national security. Vectrus is headquartered in Colorado Springs, Colo., and includes about 8,100 employees spanning 205 locations in 28 countries. In 2021, Vectrus generated sales of approximately $1.8 billion. For more information, visit the company’s website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

About Vertex

The Vertex Company is headquartered in Madison, Mississippi and employs approximately 6,000 employees, over 40 percent of whom are Armed Forces veterans, operating in over 125 locations worldwide. Vertex delivers integrated turnkey lifecycle support from concept definition, to engineering and manufacturing, through end of life support of complex systems and platforms, Vertex offerings include all levels of aviation maintenance, worldwide contractor logistics support, systems engineering and integration, specialized onsite mission execution, high consequence training programs for defense and commercial customers, and integrated supply-chain solutions. Over our 50-year history, we have perfected the balance of cost, schedule, and performance to offer high-quality solutions that consistently exceed customer requirements. Information about Vertex can be found at vtxco.com. Vertex is majority owned by American Industrial Partners Capital Fund VI LP (AIP), a fund managed by an operationally oriented private equity firm with $8 billion of assets under management (for more information on AIP visit americanindustrial.com).

FORWARD-LOOKING STATEMENTS.
Certain material presented in this press release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, Vectrus may be unable to obtain shareholder approval as required for the Transaction; conditions to the closing of the Transaction may not be satisfied; the possibility that anticipated benefits of the Transaction may not be realized or may take longer to realize than expected; the possibility that costs related to Vectrus’s integration of Vertex’s operations may be greater than expected and/or that revenues following the Transaction may be lower than expected; Vectrus’s business may suffer as a result of uncertainty surrounding the Transaction and disruption of management’s attention due to the Transaction; the outcome of any legal proceedings that arise that are related to the Transaction; Vectrus may be adversely affected by other economic, business, and/or competitive factors; the risk that Vectrus may be unable to obtain governmental and regulatory approvals required for the Transaction, or that required governmental and regulatory approvals may delay the Transaction or result in the imposition of conditions that could reduce the anticipated benefits from the Transaction or cause the parties to abandon the Transaction; the impact of legislative, regulatory, competitive and technological changes; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the effect of the Transaction on the ability of Vectrus to retain and maintain relationships with both Vectrus’s and Vertex’s customers, including the U.S. Government; other risks to the consummation of the merger, including the risk that the merger will not be consummated within the expected time period or at all; responses from customers and competitors to the Transaction; the risk that the integration of Vertex may distract management from other important matters; results from the Transaction may be different than those anticipated; statements about Vectrus’s 2022 performance outlook, five-year growth plan, revenue, DSO, contract opportunities, the impacts of COVID-19, and any discussion of future operating or financial performance.

Whenever used, words such as “may,” “are considering,” “will,” “likely,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “could,” “potential,” “continue,” “goal” or similar terminology are forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management.

These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the U.S. Securities and Exchange Commission.

We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Additional Information and Where to Find It
In connection with the Transaction, Vectrus plans to file with the SEC and mail or otherwise provide to its shareholders a proxy statement/prospectus regarding the Transaction. BEFORE MAKING ANY VOTING DECISION, VECTRUS’S SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY VECTRUS WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and shareholders will be able to obtain a free copy of the proxy and other documents containing important information about Vectrus and Vertex, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Vectrus makes available free of charge at www.vectrus.com (in the “Investors” section), copies of materials it files with, or furnishes to, the SEC.

Participants in Solicitation
Vectrus, its directors and certain of its respective executive officers may be considered participants in the solicitation of proxies in connection with the Transaction. Information about the directors and executive officers of Vectrus is set forth in Vectrus’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on March 2, 2021, and its definitive proxy statement for the 2021 annual meeting of shareholders, which was filed with the SEC on March 23, 2021, certain of its Quarterly Reports on Form 10-Q and certain of its Current Reports filed on Form 8-K. To the extent the holdings of securities of Vectrus by Vectrus’s directors and executive officers have changed since the amounts set forth in Vectrus’s proxy statement for its 2021 annual meeting of shareholders, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of such individuals in the Transaction will be included in the proxy statement/prospectus relating to the Transaction when it is filed with the SEC. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, may be obtained by reading the definitive proxy statement regarding the acquisition described above.

Non-GAAP Measures
This press release includes certain non-GAAP financial measures, including EBITDA and Pro forma Adjusted EBITDA. These financial measures are not prepared in accordance with accounting principles generally accepted in the United States and may be different from non-GAAP financial measures used by other companies. Vertex and the Company believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP measures with comparable names should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. 

Contact Information

Vectrus
Mike Smith, CFA
michael.smith@vectrus.com
(719) 637-5773

Or

Jim Golden / Scott Bisang / Tim Ragones
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

The Vertex Company
Rick Mendoza
Richard.mendoza@vtxco.com
(601) 607-6022

SOURCE Vectrus, Inc.