V2x, Inc. · NYSE:VVX
V2x — Vectrus — Credit Suisse Conference 2014
16 slides from V2x's conference presentation, Dec 2, 2014
Slide 1: Credit Suisse Conference Presentation
VECTRUS CREDIT SUISSE CONFERENCE PRESENTATION DECEMBER 2, 2014
Slide 2: Safe Harbor Statement
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 IN
Slide 3: Experienced Leadership Team
EXPERIENCED LEADERSHIP TEAM • Joined company in 2010 Ken Hunzeker • President, Mission Systems Chief Executive • Vice President for Government Relations, ITT Defense and Information Solutions Officer • Lieutenant General (Ret.), U.S. Army • Deputy Commander, United States Forces — Iraq • Joined comp
Slide 4: Vectrus Investment Highlights
VECTRUS INVESTMENT HIGHLIGHTS • > $1B business supporting customers’ mission Strong Core Business • Long-term foundational contracts with $2.2B(1) in backlog(2) • Accomplished management team • More than 50-year legacy supporting customers’ key missions Enduring Customer • Recent expansion into Mari
Slide 5: Vectrus Value Proposition
VECTRUS VALUE PROPOSITION Customer Focus – Deep understanding of customer needs • Successful program execution True to customers’ • Enables client mission success missions Performance Excellence – Vectrus performs on contracts • Historically have received high award fees Customer satisfaction • Curr
Slide 6: Core Capabilities
CORE CAPABILITIES Services Key Contracts • Infrastructure sustainment services including base • Kuwait Base Operations and Infrastructure maintenance, public works, civil Security Support Services engineering and minor • Maxwell Air Force Base Asset construction/renovations Operations Support Manage
Slide 7: Long-Term Strategy
LONG-TERM STRATEGY Enhance Solid Foundation Balance the Portfolio Provide More Value Continued Focus on the Expand the Diversity of Enhance and Extend Competitiveness of our Revenue Streams in Core Offerings to Increase Core Business Offerings through New Value Customers and Geographies • Continued
Slide 8: Large Opportunity for Growth
LARGE OPPORTUNITY FOR GROWTH APPROX. $25B 3-YEAR NEW BUSINESS • Approx. $25B 3-year new IDENTIFIED PIPELINE business identified pipeline – $10B qualified – $1B(1) currently under Identified evaluation (expect to award in the next 6-12 months) – IDIQ prime contracts carry Qualified no value in pipeli
Slide 9: Portfolio Transformation
PORTFOLIO TRANSFORMATION Strategic 2014E Revenue Mix Future Revenue Mix Intent Infra IT & Network IT & Network structure Asset Comm. Balance Comm. Infrastructure Mgmt. Asset Mgmt. Service Lines Logistics and Equip. Logistics and Equip. Air Force Diversify Air Force Army Army Client Base Navy Navy Ot
Slide 10: Third Quarter 2014 Highlights
THIRD QUARTER 2014 HIGHLIGHTS • Vectrus successfully completed the spin-off from Exelis on September 27, 2014 • New contract wins are expected to add $1.4B to backlog in Q4 o U.S. Army Corps of Engineers Information Technology (ACE-IT) Contract(1) total contract value $517M, 5 years o U.S. Air Force
Slide 11: Backlog
BACKLOG(1) ($B) (2) • Year-to-Date Book-to-Bill(2) 1.3x and Full Year expected to exceed 1.0x • Total Backlog(1) as of September 30, 2014 of $2.2B (excludes ACE-IT(3), Turkey Spain and Thule(4)) • September 30, 2014 backlog, adjusted to include the three recent wins is $3.6B (1) Total backlog repres
Slide 12: 2014 Guidance and Summary
2014 GUIDANCE AND SUMMARY Adjusted Operating Adjusted EPS (4) Adjusted Revenue(1) Free Cash Flow (3) Margin(2) fully diluted $ millions $ millions (1) Guidance $ 1,150 to $ 1,200 4.0% to 4.5% $ 23 to $ 26 $ 2.70 to $ 2.90 SUMMARY • Three recent awards are expected to add ~$1.4B of total backlog in t
Slide 13: Appendix
f APPENDIX
Slide 14: Reconciliation of Non-GAAP Measures (Cont.)
RECONCILIATION OF NON-GAAP MEASURES (CONT.) The primary financial performance measures Vectrus uses to manage its business and monitor results of operations are revenue trends and operating income trends. In addition, we consider adjusted revenue, adjusted operating income, adjusted operating margin
Slide 15: Reconciliation of Non-GAAP Measures (Cont.)
RECONCILIATION OF NON-GAAP MEASURES (CONT.) Three Months Ended Nine Months Ended $ millions September 30, September 30, Adjusted Operating Income (Non-GAAP Measure) 2014 2013 2014 2013 Net Income $ 2 $ 19 $ 19 $ 68 Income Taxes 1 10 11 38 Operating Income 3 29 30 106 Operating Margin 1.0% 8.3% 3.3%
Slide 16: Reconciliation of Non-GAAP Measures (Cont.)
RECONCILIATION OF NON-GAAP MEASURES (CONT.) Three Months Ended Nine Months Ended $ millions, except EPS and outstanding shares September 30, September 30, Adjusted Net Income (non-GAAP Measure) 2014 2013 2014 2013 Net Income $ 2.1 $ 18.6 $ 19.5 $ 68.2 TARS Operating income (net of tax) (0.6) (0.7) (