Vectrus Announces Second Quarter 2020 Results

COLORADO SPRINGS, Colo., Aug. 11, 2020 /PRNewswire/ -- Vectrus, Inc. (NYSE: VEC) announced second quarter 2020 financial results for the quarter ended July 3, 2020.

"Second quarter results demonstrated solid top line performance, strong new business awards, and favorable cash flow generation despite the impact of COVID-19. Margin and EPS were adversely impacted by one-time closeouts and a contract adjustment to a European program," said Chuck Prow, president and chief executive officer. "The company is working with the client to resolve this issue prior to the next option period in mid-2021. Our updated guidance reflects the continued impact from COVID-19 on existing programs and the delay of LOGCAP V and other new programs due to host nation and base access restrictions. We expect improved margins to drive EPS growth in the second half of the year."

"During the quarter, we won three new contracts with our Navy client, two of which were in collaboration with a joint venture partner and are in the aggregate valued at $554 million," said Prow. "Our prospects for growth, supported by our robust backlog and $10.6 billion pipeline, are unchanged. Our cash flow generation and balance sheet remain strong and we are well positioned for the future. We are maintaining an agile, deliberate posture with respect to COVID-19 with focus on the safety of our clients and team while executing consistently on our programs. I would like to acknowledge the dedication and innovation our entire work force has demonstrated to keep the missions we operate at a high level of readiness throughout the ongoing pandemic for our clients."

Second Quarter 2020 Results

Second quarter 2020 revenue of $336.1 million increased $4.5 million or 1.3% compared to second quarter 2019. It is estimated that revenue was adversely impacted by $22.3 million or 6.7% from the COVID-19 pandemic due to base access restrictions. Revenue was also adversely impacted in the quarter by the previously mentioned contract adjustment and one-time closeouts totaling $4.2 million or 1.3%.

For the second quarter 2020, operating income was $2.4 million or 0.7% margin. Excluding M&A related and LOGCAP V pre-operational costs, adjusted operating income(1) was $4.7 million or 1.4% margin. Adjusted operating income(1) was adversely impacted by the COVID-19 deferral of high-margin revenue due to base access restrictions into future periods of $2.1 million which had a 30-basis point impact to adjusted operating margin(1). Adjusted operating income(1) was also adversely impacted by the above-mentioned contract adjustment and one-time closeouts of $8.4 million, which had a 240-basis point impact to adjusted operating margin.

EBITDA(1) was $4.4 million or 1.3% margin for the second quarter 2020, compared to $12.6 million or 3.8% margin in the second quarter 2019. Excluding M&A related and LOGCAP V pre-operational legal costs, adjusted EBITDA(1) was $6.7 million or 2.0% margin for the second quarter 2020, compared to $13.9 million or 4.2% margin in the second quarter 2019. Adjusted EBITDA(1) was adversely impacted by COVID-19 of $2.1 million, which had a 30-basis point impact to adjusted EBITDA margin(1). Adjusted EBITDA(1) was also adversely impacted by the above-mentioned adjustments of $8.4 million, which had a 240-basis point impact.

Second quarter 2020 diluted EPS was $0.09 compared to $0.66 in second quarter 2019. Excluding M&A related and LOGCAP V pre-operational costs, adjusted diluted EPS(1) for the second quarter 2020 was $0.24. Adjusted diluted EPS(1) was adversely impacted due to COVID-19 by $0.14, and by the above-mentioned adjustments of $0.54. The tax rate in the second quarter 2020 was a benefit of 2.5% as compared to a tax rate of 22.8% in the second quarter 2019. The company benefited in the quarter from the resolution of a foreign tax matter related to prior periods, which had a positive effect on both diluted EPS and adjusted diluted EPS(1) of $0.02.

"The combination of one-time closeouts and the adjustment to a European program adversely impacted our second quarter results, and are now behind us," said Susan Lynch, senior vice president and chief financial officer. "We continue to believe our business is resilient and stronger than ever. Vectrus continues to invest in hardening its processes, completing the rollout of its enterprise systems and enhancing our talent to support projected growth. Free cash flow has been strong. Our low leverage ratio and strong cash position provides the Company with $180 million dollars of liquidity to invest in long-term growth."

Net cash provided by operating activities for the quarter ended July 3, 2020 was $33.3 million, compared to net cash provided by operating activities of $21.8 million in the second quarter of 2019. Cash flow was favorably impacted by approximately $13 million of CARES Act Federal estimated payments and employee payroll tax deferrals. Days sales outstanding (DSO) was 67 days in the second quarter of 2020.

Net debt at July 3, 2020 was $4.8 million, down from $35.2 million at December 31, 2019. Total debt at July 3, 2020 was $67.5 million, down $3.0 million from $70.5 million at December 31, 2019 due to mandatory payments. Cash at quarter-end was $62.7 million, up from $35.3 million at December 31, 2019. As of July 3, 2020, the revolver, was undrawn and combined with cash, results in total liquidity of $180 million. Total consolidated indebtedness to consolidated EBITDA(1) (total leverage ratio) was 1.08x. Net debt to consolidated EBITDA(1) was 0.08x.

Total backlog as of July 3, 2020 was $3.8 billion and funded backlog was $0.9 billion. The trailing twelve-month book-to-bill was 1.4x as of July 3, 2020.

Revised 2020 Guidance

Vectrus is revising and narrowing its full-year 2020 guidance ranges for revenue, EBITDA, and diluted EPS to include second quarter results. The outlook for net cash provided by operating activities remains unchanged as a result of the favorable impact of the CARES Act tax deferrals, lower capital expenditure outlook and lower EBITDA projections.

The transition of LOGCAP V and newly won programs have slowed due to COVID-19 as restrictions in both host nation and base access continue to be gating factors to full operational capability. Additionally, protests on new business awards are limiting our ability to conduct transition and phase-in activities.

The COVID-19 pandemic is now estimated to defer 2020 revenue of approximately $65 million and EBITDA of $4 million into future periods. While we expect the vast majority of the associated revenue and profit to remain in our backlog, the contribution will be determined by the timing of services performed in future contractual periods. The Company continues to work with its clients to maintain operations and plan a safe return to work in light of the COVID-19 pandemic.

In addition, guidance for capital expenditures has been reduced from $7.0 million to $5.0 million, depreciation and amortization has been reduced from $8.4 million to $8.1 million. Mandatory debt payments of $6.5 million, interest expense of $5.6 million, tax rate of 23%, and weighted average diluted shares outstanding of 11.8 million at December 31, 2020 remain unchanged.


            
            
              $ millions, except for EBITDA margins and per share amounts       Revised 2020 Guidance       Prior 2020 Guidance



       Revenue                                                                             $1,385             to      $1,405  $1,475             to  $1,525



       EBITDA Margin                                                                         3.8%            to        3.9%   4.6%            to    4.8%



       Adjusted EBITDA Margin*                                                               4.0%            to        4.1%   4.6%            to    4.8%



       Diluted Earnings Per Share                                                           $2.53             to       $2.67   $3.48             to   $3.81



       Adjusted Diluted Earnings Per Share*                                                 $2.68             to       $2.82   $3.48             to   $3.81



       Net Cash Provided by Operating Activities                                            $45.0             to       $55.0   $45.0             to   $55.0

    ---



               * Adjusted EBITDA margin(1)
                and Adjusted Diluted
                Earnings Per Share(1),
                excludes any M&A related
                costs and LOGCAP V pre-
                operational legal costs.

The Company notes that 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.

Second Quarter 2020 Conference Call

Management will conduct a conference call with analysts and investors at 4:30 p.m. ET on Tuesday, August 11, 2020. U.S.-based participants may dial in to the conference call at 877-407-0792, while international participants may dial 201-689-8263. For all other listeners, a live webcast of the conference call will be available on the Vectrus Investor Relations website at

http://investors.vectrus.com. An accompanying slide presentation will also be available on the Vectrus Investor Relations website.

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 August 25, 2020, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13707461.



              Footnotes:


                            (1) See "Key Performance
                             Indicators and Non-GAAP
                             Financial Measures" for
                             reconciliation.

About Vectrus

Vectrus is a leading provider of global service solutions with a history in the services market that dates back more than 70 years. The company provides facility and base operations; supply chain and logistics services; information technology mission support; and engineering and digital technology services primarily to U.S. government customers around the world. Vectrus is differentiated by operational excellence, superior program performance, a history of long-term customer relationships and a strong commitment to its clients' mission success. Vectrus is headquartered in Colorado Springs, Colo., and includes about 7,200 employees spanning 148 locations in 26 countries and territories across four continents. In 2019, Vectrus generated sales of $1.4 billion. To learn about career opportunities at Vectrus, visit www.vectrus.com/careers. For more information, visit the company's website at www.vectrus.com or connect with Vectrus on Facebook, Twitter, and LinkedIn.

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 of the statements and items listed in the table in "Revised 2020 Guidance" above and other assumptions contained therein for purposes of such guidance, other statements about our 2020 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.

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 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.

CONTACT:

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


                                                                                  
             
                VECTRUS, INC.


                                                                   
              
         CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)




                                                      
            Three Months Ended                                       
              Six Months Ended


                                                   July 3,                           June 28,                           July 3,                     June 28,


                   (In thousands, except per share
                    data)                             2020                              2019                                2020                         2019



     Revenue                                              $
              336,063                                $
              331,589                             $
        687,797  $
      657,495



     Cost of revenue                              311,817                             300,553                                         631,510                       596,149


      Selling, general, and
       administrative expenses                      21,816                              19,843                                          41,374                        39,762



     Operating income                               2,430                              11,193                                          14,913                        21,584



     Interest expense, net                        (1,346)                            (1,329)                                         (3,048)                      (2,904)


      Income from operations before
       income taxes                                  1,084                               9,864                                          11,865                        18,680



     Income tax expense                              (27)                              2,247                                           2,086                         3,989



     Net income                                             $
              1,111                                  $
              7,617                               $
        9,779   $
      14,691





     Earnings per share



     Basic                                          $0.10                               $0.66                                           $0.84                         $1.29



     Diluted                                        $0.09                               $0.66                                           $0.83                         $1.28


      Weighted average common shares
       outstanding -basic                           11,607                              11,455                                          11,575                        11,376


      Weighted average common shares
       outstanding -diluted                         11,745                              11,605                                          11,742                        11,512


                                                                           
            
                VECTRUS, INC.


                                                               
              
              CONDENSED CONSOLIDATED BALANCE SHEETS




                                                                                                              July 3,                      December 31,



     
                (In thousands, except share information)                                                              2020               2019



     
                Assets                                                                                         (unaudited)



     Current assets



     Cash                                                                                                                     $
      62,719                $
      35,318



     Receivables                                                                                                     260,295              269,144



     Other current assets                                                                                             21,980               16,154



     Total current assets                                                                                            344,994              320,616



     Property, plant, and equipment, net                                                                              19,107               18,844



     Goodwill                                                                                                        262,130              261,983



     Intangible assets, net                                                                                           12,905               14,926



     Right-of-use assets                                                                                              11,259               14,654



     Other non-current assets                                                                                          7,386                5,366



     Total non-current assets                                                                                        312,787              315,773



     
                Total Assets                                                                                               $
      657,781               $
      636,389



     
                Liabilities and Shareholders' Equity



     Current liabilities



     Accounts payable                                                                                                        $
      142,138               $
      148,015



     Compensation and other employee benefits                                                                         60,417               53,155



     Short-term debt                                                                                                   7,500                6,500



     Other accrued liabilities                                                                                        45,655               37,409



     Total current liabilities                                                                                       255,710              245,079



     Long-term debt, net                                                                                              59,234               63,041



     Deferred tax liability                                                                                           46,473               49,407



     Other non-current liabilities                                                                                    26,929               19,997



     Total non-current liabilities                                                                                   132,636              132,445



     Total liabilities                                                                                               388,346              377,524



     Shareholders' Equity


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


      Common stock; $0.01 par value; 100,000,000 shares authorized; 11,619,544 and
       11,523,691 shares issued and outstanding as of July 3, 2020 and December 31,
       2019, respectively                                                                                                 116                  115



     Additional paid in capital                                                                                       79,944               78,757



     Retained earnings                                                                                               194,854              185,075



     Accumulated other comprehensive loss                                                                            (5,479)             (5,082)



     Total shareholders' equity                                                                                      269,435              258,865



     
                Total Liabilities and Shareholders' Equity                                                                 $
      657,781               $
      636,389


                                                                
              
                VECTRUS, INC.


                                         
              
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)




                                                                                                     
              Six Months Ended


                                                                                                  July 3,                         June 28,



     
                (In thousands)                                                                    2020                           2019



     
                Operating activities



     Net income                                                                                             $
              9,779             $
        14,691


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



     Depreciation expense                                                                          1,971                            1,538



     Amortization of intangible assets                                                             2,028                            1,277



     Loss on disposal of property, plant, and equipment                                                                                2



     Stock-based compensation                                                                      5,411                            4,031



     Amortization of debt issuance costs                                                             193                              201



     Changes in assets and liabilities:



     Receivables                                                                                   9,429                            (224)



     Other assets                                                                                (7,938)                         (7,128)



     Accounts payable                                                                            (6,021)                           2,038



     Deferred taxes                                                                              (2,735)                         (2,579)



     Compensation and other employee benefits                                                      7,037                            3,324



     Other liabilities                                                                            15,252                          (1,721)



     
                Net cash provided by operating activities                                       34,406                           15,450



     
                Investing activities



     Purchases of capital assets and intangibles                                                 (2,246)                        (11,739)



     
                Net cash (used in) investing activities                                        (2,246)                        (11,739)



     
                Financing activities



     Repayments of long-term debt                                                                (3,000)                         (2,000)



     Proceeds from revolver                                                                      144,000                           98,000



     Repayments of revolver                                                                    (144,000)                        (98,000)



     Proceeds from exercise of stock options                                                          59                            3,467


      Payments of employee withholding taxes on share-based compensation                          (1,873)                           (768)


                   Net cash (used in) provided by financing activities                            (4,814)                             699



     
                Exchange rate effect on cash                                                        55                            (226)



     Net change in cash                                                                           27,401                            4,184



     Cash-beginning of year                                                                       35,318                           66,145



     
                Cash-end of period                                                                       $
              62,719             $
        70,329



     Supplemental disclosure of cash flow information:



     Interest paid                                                                                          $
              2,527              $
        2,818



     Income taxes paid                                                                                         $
              70              $
        4,198



     Non-cash investing activities:



     Purchase of capital assets on account                                                                    $
              447                $
        301

Key Performance Indicators and Non-GAAP Measures

The primary financial performance measures we use to manage our business and monitor results of operations are revenue trends and operating income trends. Management believes that these financial performance measures are the primary drivers for our earnings and net cash from operating activities. Management evaluates its contracts and business performance by focusing on revenue, operating income and operating margin. Operating income represents revenue less both cost of revenue and selling, general and administrative (SG&A) expenses. Cost of revenue consists of labor, subcontracting costs, materials, and an allocation of indirect costs, which includes service center transaction costs. SG&A expenses consist of indirect labor costs (including wages and salaries for executives and administrative personnel), bid and proposal expenses and other general and administrative expenses not allocated to cost of revenue. We define operating margin as operating income divided by revenue.

We manage the nature and amount of costs at the program level, which forms the basis for estimating our total costs and profitability. This is consistent with our approach for managing our business, which begins with management's assessing the bidding opportunity for each contract and then managing contract profitability throughout the performance period.

In addition to the key performance measures discussed above, we consider adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, and organic revenue to be useful to management and investors in evaluating our operating performance, and to provide a tool for evaluating our ongoing operations. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives. We provide this information to our investors in our earnings releases, presentations and other disclosures.

Adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, and organic revenue, however, are not measures of financial performance under GAAP and should not be considered a substitute for operating income, operating margin, net income and diluted earnings per share as determined in accordance with GAAP. Definitions and reconciliations of these items are provided below.

    --  Adjusted operating income is defined as operating income, adjusted to
        exclude items that may include, but are not limited to significant
        charges or credits, and unusual and infrequent non-operating items, such
        as M&A transaction and LOGCAP V pre-operational legal costs that impact
        current results but are not related to our ongoing operations.
    --  Adjusted operating margin is defined as adjusted operating income
        divided by revenue.
    --  Adjusted net income is defined as net income, adjusted to exclude items
        that may include, but are not limited to, significant charges or
        credits, and unusual and infrequent non-operating items, such as M&A
        transaction and LOGCAP V pre-operational legal costs, that impact
        current results but are not related to our ongoing operations.
    --  Adjusted diluted earnings per share is defined as adjusted net income
        divided by the weighted average diluted common shares outstanding.
    --  EBITDA is defined as operating income, adjusted to exclude depreciation
        and amortization.
    --  Adjusted EBITDA is defined as EBITDA, adjusted to exclude items that may
        include, but are not limited to, significant charges or credits and
        unusual and infrequent non-operating items, such as M&A transaction and
        LOGCAP V pre-operational legal costs that impact current results but are
        not related to our ongoing operations.
    --  EBITDA margin is defined as EBITDA divided by revenue.
    --  Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue.
    --  Organic revenue is defined as revenue, adjusted to exclude revenue from
        acquired companies.


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


                   ($ in thousands, except
                    per share data)                        Three                       M&A                   LOGCAP V                           Three
                                               Months                          Related              Pre-                            Months
                                             Ended July                         Costs            Operational                      Ended July
                                                      3, 2020 As                                 Legal Costs                               3, 2020 As
                                              Reported                                                                            Reported -
                                                                                                                                   Adjusted





     Revenue                                                    $
        336,063                             
             $                                                
      $                              $
         336,063



     Growth                                       1.3
            %                                                                                         1.3
         %


      Growth, organic                                      (1.8)                                                                                              (1.8)
                                                               %                                                                                                  %


      Operating income                                     2,430                           2,193                                                     46                                 4,669


      Operating margin                             0.7
            %                                                                                         1.4
         %




      Interest expense, net                              (1,346)                                                                                                                   (1,346)




      Income from operations
       before income taxes                                         $
        1,084                                         $
       2,193                                              $
             46                $
         3,323




      Income tax expense                                    (27)                            504                                                     11                                   488


      Income tax rate                                      (2.5)                           23.0                                                   23.0
                                                               %                              %                                                     %                        14.7
           %





     Net income                                                   $
        1,111                                         $
       1,689                                              $
             35                $
         2,835




      Weighted average common
       shares outstanding,
       diluted                                            11,745                                                                                              11,745




      Diluted earnings per
       share                                                        $
        0.09                                          $
       0.14                                      
      $                                 $
         0.24




                   EBITDA (Non-GAAP
                    Measures)


                   ($ in thousands)                        Three                       M&A                   LOGCAP V                           Three
                                               Months                          Related              Pre-                            Months
                                             Ended July                         Costs            Operational                      Ended July
                                                      3, 2020 As                                 Legal Costs                               3, 2020 As
                                              Reported                                                                            Reported -
                                                                                                                                   Adjusted


      Operating Income                                             $
        2,430                                         $
       2,193                                              $
             46                $
         4,669





     Add:


      Depreciation and
       amortization                                        1,988                                                                                                                      1,988





     EBITDA                                                       $
        4,418                                         $
       2,193                                              $
             46                $
         6,657



     EBITDA Margin                                1.3
            %                                                                                         2.0
         %




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


                   ($ in thousands, except
                    per share data)                        Three                       M&A                   LOGCAP V                           Three
                                               Months                          Related              Pre-                            Months
                                             Ended June                         Costs            Operational                      Ended June
                                                     28, 2019 As                                 Legal Costs                              28, 2019 As
                                              Reported                                                                            Reported -
                                                                                                                                   Adjusted





     Revenue                                                    $
        331,589                             
             $                                                
      $                              $
         331,589




      Operating income                                    11,193                             667                                                    579                                12,439


      Operating margin                             3.4
            %                                                                                         3.8
         %




      Interest expense, net                              (1,329)                                                                                                                   (1,329)




      Income from operations
       before income taxes                                         $
        9,864                                           $
       667                                             $
             579               $
         11,110




      Income tax expense                                   2,247                             152                                                    132                                 2,531


      Income tax rate                             22.8
            %                                                                                        22.8
         %





     Net income                                                   $
        7,617                                           $
       515                                             $
             447                $
         8,579




      Weighted average common
       shares outstanding,
       diluted                                            11,605                                                                                              11,605




      Diluted earnings per
       share                                                        $
        0.66                                                                                              $
             0.74




                   EBITDA (Non-GAAP
                    Measures)


                   ($ in thousands)                        Three                       M&A                   LOGCAP V                           Three
                                               Months                          Related              Pre-                            Months
                                             Ended June                         Costs            Operational                      Ended June
                                                     28, 2019 As                                 Legal Costs                              28, 2019 As
                                              Reported                                                                            Reported -
                                                                                                                                   Adjusted


      Operating Income                                    11,193                             667                                                         $
           579                         $
     12,439





     Add:


      Depreciation and
       amortization                                        1,456                                                                                                                      1,456





     EBITDA                                                      $
        12,649                                           $
       667                                             $
             579               $
         13,895



     EBITDA Margin                                3.8
            %                                                                                         4.2
         %


                            (In thousands)              Three Months                               Three Months                                Three Months
                                            Ended July 3,                          Ended July 3,                       Ended July 3,
                                               2020 As                             2020 Advantor                      2020 As Reported
                                              Reported                                                                   - Organic




               Revenue                                               $
     336,063                                $
         10,287                                 $
      325,776




               ($ In
                thousands)                              Three Months                               Three Months                                Three Months
                                           Ended June 28,                       Ended June 28,                     Ended June 28,
                                               2019 As                          2019 Advantor                     2019 As Reported
                                              Reported                                                                - Organic




               Revenue                                               $
     331,589                  
             $                                                $
      331,589




               Organic Revenue
                $                                                                                                             $
           (5,813)


    Organic Revenue                                                                                                 (1.8)
     %                                                                                                                   %

SUPPLEMENTAL INFORMATION

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


                                  Revenue by Client


                                                                              
         Three Months Ended                                                               
        Six Months Ended


                   ($ In thousands)                   July 3, 2020              % of Total             June 28, 2019  % of Total                 July 3, 2020          % of Total              June 28, 2019            % of Total



     Army                                                         $
     227,351                                      68                         $
            225,867                             68                                     $
     474,906        69                    $
     452,559        69

                                                                                                                   %                                                                      %                                                        %                                       %



     Air Force                                             78,321                                 23                       72,593                                22                                            151,663                         22                 140,524              21

                                                                                                   %                                                            %                                                                             %                                       %



     Navy                                                  14,542                                  4                       16,796                                 5                                             29,779                          4                  31,884               5

                                                                                                   %                                                            %                                                                             %                                       %



     Other                                                 15,849                                  5                       16,333                                 5                                             31,449                          5                  32,528               5

                                                                                                   %                                                            %                                                                             %                                       %


      Total revenue                                                $
     336,063                                                      $
     331,589                                                                $
     687,797                                 $
     657,495




                                  Revenue by Contract
                                   Type


                                                                              
         Three Months Ended                                                               
        Six Months Ended


      ($ In thousands)                                July 3, 2020              % of Total             June 28, 2019  % of Total                 July 3, 2020          % of Total              June 28, 2019            % of Total


      Cost-plus and cost-                                          $
     242,740                                      72                         $
            256,737                             77                                     $
     499,059        73                    $
     508,193        77
       reimbursable (1)
                                                                                                                   %                                                                      %                                                        %                                       %


      Firm-fixed-price                                      93,323                                 28                       74,852                                23                                            188,738                         27                 149,302              23

                                                                                                   %                                                            %                                                                             %                                       %


      Total revenue                                                $
     336,063                                                      $
     331,589                                                                $
     687,797                                 $
     657,495


      (1) Includes time
       and material
       contracts




                                  Revenue by Contract
                                   Relationship


                                                                              
         Three Months Ended                                                               
        Six Months Ended


      ($ In thousands)                                July 3, 2020              % of Total             June 28, 2019  % of Total                 July 3, 2020          % of Total              June 28, 2019            % of Total


      Prime contractor                                             $
     314,345                                      94                         $
            312,732                             94                                     $
     647,738        94                    $
     619,790        94

                                                                                                                   %                                                                      %                                                        %                                       %


      Subcontractor                                         21,718                                  6                       18,857                                 6                                             40,059                          6                  37,705               6

                                                                                                   %                                                            %                                                                             %                                       %


      Total revenue                                                $
     336,063                                                      $
     331,589                                                                $
     687,797                                 $
     657,495




                                  Revenue by
                                   Geographic Region


                                                                              
         Three Months Ended                                                               
        Six Months Ended


      ($ In thousands)                                July 3, 2020              % of Total             June 28, 2019  % of Total                 July 3, 2020          % of Total              June 28, 2019            % of Total


      Middle East                                                  $
     216,763                                      65                         $
            223,588                             67                                     $
     454,700        66                    $
     450,004        68

                                                                                                                   %                                                                      %                                                        %                                       %


      United States                                         83,770                                 25                       72,376                                22                                            165,239                         24                 143,764              22

                                                                                                   %                                                            %                                                                             %                                       %



     Europe                                                35,530                                 10                       35,625                                11                                             67,858                         10                  63,727              10

                                                                                                   %                                                            %                                                                             %                                       %


      Total revenue                                                $
     336,063                                                      $
     331,589                                                                $
     687,797                                 $
     657,495

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SOURCE Vectrus, Inc.