MCLEAN, Va., Jan. 12, 2023 /PRNewswire/ — V2X, Inc., (NYSE: VVX), a leading provider of critical mission solutions and support to defense clients globally, announced that on December 30, 2022, the company made a $25 million prepayment on its $185 million Second Lien Term Loan.
“We are pleased to announce the $25 million prepayment of our Second Lien Term Loan, which demonstrates our commitment to lowering interest expense and increasing returns to shareholders,” said Susan Lynch, Senior Vice President and Chief Financial Officer. “We continue to see opportunities to further improve the company’s cost of capital and drive additional interest expense savings.”
ABOUT V2X V2X is a leading provider of critical mission solutions and support to defense clients globally, formed by the 2022 merger of Vectrus and Vertex to build on more than 120 combined years of successful mission support. The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training and technology markets to national security, defense, civilian and international clients. Our global team of approximately 15,000 employees brings innovation to every point in the mission lifecycle, from preparation, to operations, to sustainment, as they tackle the most complex challenges with agility, grit and dedication.
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.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
3Q22 Operating Results. In the first quarter as a combined entity, V2X reported strong results. Revenue of $958.2 million was up 10% year-over-year. Both the legacy Vectrus and Vertex businesses grew in the 10% y-o-y range. We had projected revenue of $855 million. The Company reported a GAAP net loss of $17 million, or a loss of $0.56 per share, driven by costs related to the merger. On an adjusted basis, net income totaled $40.2 million, or EPS of $1.33. We had projected adjusted EPS of $0.81. Adjusted EBITDA totaled $79 million for an 8.2% margin.
Drivers. The strong operating resultswere driven by continued expansion on existing business and the phase-in of new awards. Notably, year-over-year organic growth for the legacy Vectrus was approximately 10% in the quarter, driven by performance in INDOPACOM, growth on LOGCAP, contribution from Fort Benning as well as volume associated with rapid response and contingency support.
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.
On July 5, 2022 (“Closing Date”), Vectrus, Inc. (“Vectrus”) completed its merger (“the Merger”) with Vertex Aerospace Services Holding Corp. (“Vertex”), thereby forming V2X, Inc. Third quarter “reported results” reflect the contributions of Vectrus from July 1, 2022, through September 30, 2022 and Vertex from the Closing Date through September 30, 2022, unless otherwise noted. Comparisons to historical periods are relative to legacy Vectrus results, unless otherwise noted.
Third Quarter Highlights:
Solid third quarter revenue of $958.2 million; Pro forma revenue of $961.3 million, +10% y/y
Reported operating income (inclusive of Merger related costs) of $4.5 million; Adjusted operating income1 of $73.6 million
Adjusted EBITDA1 of $79.0 million with an adjusted EBITDA margin1 of 8.2%
Third quarter diluted EPS of ($0.56); Adjusted diluted EPS1 of $1.33
Strong third quarter operating cash flow of $80.1 million; Adjusted operating cash flow1 of $121.2 million
Reduced net debt by $87 million dollars or 7% since the Merger closed on July 5, 2022
Guidance: Raising guidance mid-point for revenue, adjusted EBITDA1, and adjusted operating cash flow1
MCLEAN, Va., Nov. 8, 2022 /PRNewswire/ — V2X, Inc. (NYSE:VVX) announced third quarter 2022 financial results. “I’m pleased to report a strong start for V2X with third quarter results that demonstrate our ability to grow, generate substantial cash flow, and increase value for shareholders,” said Chuck Prow, President and Chief Executive Officer of V2X. “Our adjusted operating cash flow1 of $121 million in the quarter was significant and highlights the robust cash generative nature of our business. Additionally, adjusted EBITDA margin1 was 8.2%, which was driven by our teams’ successful efforts in delivering solid performance that was also ahead of schedule. We also continue to make significant progress on integration milestones and remain on track to deliver our previously communicated cost synergies. Based on our current momentum, significant progress on integration, and third quarter performance, we are increasing the mid-point of our guidance for revenue, adjusted EBITDA1 and adjusted operating cash flow1. I’d like to thank all of our employees for their focus on delivering results and achieving significant progress on integration, while providing high quality uninterrupted service and support to our clients.”
Mr. Prow continued, “We remain excited about the potential opportunities that lie ahead for V2X to lead in the converged environment. The key metrics and leading indicators of our business remain strong. Recent wins have driven our total backlog to $13 billion, which represents over three times V2X’s annualized revenue, providing substantial visibility. Additionally, the company does not currently have any contracts that generate more than two percent of revenue up for recompete for at least the next two and half years. With limited recompetes and solid revenue visibility, V2X is focusing on capturing new opportunities and contract expansion. Our $20 billion combined pipeline of new business currently submitted and / or expected to be submitted over the next twelve months provides additional opportunity to further grow the business. Furthermore, V2X has identified revenue synergies that are incremental to our current pipeline that are currently being assessed for resource allocation and pursuit. In aggregate, we believe V2X is well positioned to create additional value for our stakeholders.”
Third Quarter Results
Third quarter 2022 revenue of $958.2 million; Pro forma revenue of $961.3 million
Operating income of $4.5 million, or 0.5% margin, including Merger and integration related costs of $44.9 million and amortization of acquired intangible assets of $24.2 million
Adjusted operating income1 of $73.6 million or 7.7% adjusted operating margin1
Adjusted EBITDA1 for the quarter of $79.0 million with an 8.2% adjusted EBITDA margin1
Diluted EPS for the third quarter of 2022 of ($0.56) and includes Merger and integration related costs
Adjusted diluted EPS1 of $1.33 in the quarter
Operating cash flow for the quarter of $80.1 million
Adjusted operating cash flow1 for the quarter of $121.2 million (excluding Merger related payments)
Net debt on September 30, 2022, of $1,220.7 million, representing an $87 million decrease from the closing on July 5, 2022
The Company was undrawn on its revolver at quarter end
Total backlog as of September 30, 2022 of $12.7 billion
“Our third quarter financial results were strong and a great start for V2X,” said Susan Lynch, Senior Vice President and Chief Financial Officer. “Pro forma revenue increased 10% year-over-year to $961.3 million. Pro forma revenue takes into consideration the four days of our third quarter where Vertex was not part of V2X. Organic revenue growth was 10% for legacy Vectrus and was driven by continued strong performance on LOGCAP V, growth associated with the Fort Benning Eagle contract award and volume associated with rapid response and contingency efforts in Europe as well as INDOPACOM. Organic revenue from INDOPACOM increased 113% year-over-year, a noteworthy achievement especially given the revenue contribution from the Pacific Defender exercise during the prior year period. Total topline expansion was driven by the Merger with Vertex on July 5, 2022, which includes the ramp of new business including the E-6B, Advanced Helicopter Training System, Navy Test Wing Atlantic, and Global Strike programs.”
Ms. Lynch continued, “Our strong performance coupled with a focus on cash collections and process improvement in the quarter yielded strong results with significant cash generated from operating activities of $80.1 million. Excluding Merger related payments of $41.1 million, adjusted operating cash flow1 in the quarter was $121.2 million. This solid performance resulted in a $87.0 million dollar or 7% reduction in the company’s net debt since the Merger Closing Date, which exemplifies V2X’s ability to generate strong cash flow with low capital requirements. Total consolidated indebtedness to EBITDA1 (total leverage ratio) was 3.7x, a 0.3x improvement from Merger close. Importantly, we have been able to reduce our leverage ahead of plan, which was previously expected to be 3.7x by the end of this year. We anticipate our net debt will show further improvement in Q4 2022.”
Guidance Ms. Lynch concluded, “Given our current momentum, significant progress on integration, and third quarter performance, we are increasing the mid-point of the second half 2022 guidance for revenue, adjusted EBITDA1 and adjusted operating cash flow1.”
Guidance for the second half (2H) 2022 is as follows:
$ millions, except for EBITDA margins and per share amounts
V2X 2H 2022 Guidance (previous)
V2X 2H 2022 Guidance (current)
Revenue
$1,900
to
$1,940
$1,920 to $1,940
Adjusted EBITDA1
$140
to
$150
$145 to $150
Adjusted Diluted Earnings Per Share1
$1.94
to
$2.19
$2.14 to $2.28
Net Cash Provided by Operating Activities Excluding M&A Costs
$130
to
$150
$140 to $150
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.
Third Quarter 2022 Conference Call
Management will conduct a conference call with analysts and investors at 4:30 p.m. ET on Tuesday, November 8, 2022. U.S.-based participants may dial in to the conference call at 877-506-6380, while international participants may dial 412-542-4198. A live webcast of the conference call as well as an accompanying slide presentation will be available here: https://app.webinar.net/anKV0d7G8Q9.
A replay of the conference call will be posted on the V2X website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through November 22, 2022, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 10171765.
Presentation slides that will be used in conjunction with the conference call will also be made available online in advance at https://investors.vectrus.com/. V2X recognizes its website as a key channel of distribution to reach public investors and as a means of disclosing material non-public information to comply with its obligations under the U.S. Securities and Exchange Commission Regulation FD.
Footnotes: 1 See “Key Performance Indicators and Non-GAAP Financial Measures” for descriptions and reconciliations.
About V2X V2X is a leading provider of critical mission solutions and support to defense clients globally, formed by the 2022 Merger of Vectrus and Vertex to build on more than 120 combined years of successful mission support. The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training and technology markets to national security, defense, civilian and international clients. Our global team of approximately 14,000 employees brings innovation to every point in the mission lifecycle, from preparation, to operations, to sustainment, as it tackles the most complex challenges with agility, grit, and dedication.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the “Act”): Certain material presented herein 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, all the statements and items listed under “Guidance” above and other assumptions contained therein for purposes of such guidance, other statements about our 2022 performance outlook, five-year growth plan, revenue, DSO, contract opportunities, the potential impact of COVID-19, and any discussion of future operating or financial performance.
Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “could,” “potential,” “continue” or similar terminology. These statements are based on the beliefs and assumptions of the management of the Company 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. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. For a discussion of some of the risks and uncertainties that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time 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.
MCLEAN, Va., Oct. 25, 2022 /PRNewswire/ — V2X, Inc., (NYSE: VVX), a leading provider of critical mission solutions and support to defense clients globally, will report its financial results for the Third quarter ended September 30, 2022, on Tuesday, November 8, 2022, after market close. Senior management will conduct a conference call at 4:30 p.m. ET that same day.
U.S.-based participants may dial in to the conference call at 877-506-6380, while international participants may dial 412-542-4198. A live webcast of the conference call as well as an accompanying slide presentation will be available on the V2X Investor Relations website at http://investors.vectrus.com.
A replay of the conference call will be posted on the V2X website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through November 22, 2022, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 10171765.
ABOUT V2X
V2X is a leading provider of critical mission solutions and support to defense clients globally, formed by the 2022 merger of Vectrus and Vertex to build on more than 120 combined years of successful mission support. The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training and technology markets to national security, defense, civilian and international clients. Our global team of approximately 14,000 employees brings innovation to every point in the mission lifecycle, from preparation, to operations, to sustainment, as they tackle the most complex challenges with agility, grit and dedication.
View original content to download multimedia: