Vectrus (VEC) investor relations material

Key presentations and announcements

• V2X highlighted its $4B revenue scale, 94% prime contract base, and global presence in critical defense regions, including Indo-Pacific and Central Command, with 29% growth in those areas last quarter.

• The company won the $3.7B Warfighter Training Readiness Solution (Waters) contract in July 2024, consolidating disparate training contracts and enhancing its position as a prime contractor.

• Recent awards include a $747M F-5 adversarial aircraft program, NASA's Neutral Buoyancy Lab support for Artemis 2, and a $141M Navy fleet system engineering contract.

• Backlog exceeds $12B, with less than 5% of contracts up for recompete in the next two years, providing strong revenue visibility and focus on new business.

• Technology insertion initiatives, such as the Gateway Mission Router and F-16 digital upgrades, are driving higher margins and extending platform lifecycles.

Industry analysis and strategic direction

• V2X is benefiting from increased U.S. defense spending in the Indo-Pacific, with $9.9B allocated to the Pacific Deterrence Initiative and a strategic focus on containment in the region.

• The company is already established in key regions, unlike competitors who are just pivoting, and expects continued or accelerating growth in these markets.

• Integration from the 2022 merger has shifted to an optimization phase, focusing on margin expansion, technology integration, and pipeline growth.

• V2X maintains a low CapEx, cash-generative business model, prioritizing debt reduction and shareholder value, with future optionality for buybacks, dividends, or acquisitions.

• The competitive landscape is intense, but V2X leverages deep expertise, local presence, and technology differentiation to win major contracts against top-tier peers.

Forward-looking statements and growth outlook

• On-contract growth reached $600M in the first half of the year, with strong local teams supporting evolving customer missions.

• The company expects a book-to-bill ratio above 1 by year-end, subject to government budget resolutions, and continues to see robust demand in core markets.

• Technology insertion is expected to further expand margins and addressable markets, with ongoing investments in affordable, high-impact solutions.

• Focus remains on cash generation and debt reduction, with future growth opportunities enabled by the combined capabilities post-merger.

• Major shareholder American Industrial Partners reduced its stake, increasing stock float and potentially unlocking further value for shareholders.