Vectrus Announces Second Quarter 2019 Results

- Revenue grew 3.3% year-over-year to $332 million; Diluted EPS of $0.66 includes $0.08 per share of M&A related costs and LOGCAP V pre-operational legal costs

Published

COLORADO SPRINGS, Colo., Aug. 6, 2019 /PRNewswire/ -- Vectrus, Inc. (NYSE:VEC) announced second quarter 2019 financial results for the quarter ended June 28, 2019.

"The second quarter demonstrated continued momentum in the market place and in the execution of our strategy," said Chuck Prow, president and chief executive officer. "Our growth-related efforts continue to be successful, as we significantly increased our revenue with the Navy and the Air Force, won new contracts, including our first contract with Department of State, expanded existing contracts, secured recompete business, and won a seat on the previously announced Army's LOGCAP V contract. Our momentum is underscored by our strong backlog, which including LOGCAP V, equates to 3.6 times our 2018 revenue. As a reminder, LOGCAP V is currently under protest and still anticipated to be resolved in mid-August. We continue to invest in all aspects of our business, including the acquisition of Advantor in the third quarter, which will enhance and expand our operational technology offerings. Notwithstanding our continuing growth and operational related investments, diluted EPS increased 6% sequentially on 20 BPS of EBITDA margin1 expansion."

Second Quarter 2019 Results

Second quarter 2019 adjusted results exclude M&A related costs and LOGCAP V pre-operational legal costs, which together totaled $1.2 million pretax.

Second quarter 2019 revenue of $331.6 million, increased $10.5 million or 3% compared to second quarter 2018. The increased revenue was attributable mainly to increases from Middle East and European programs.

Operating income was $11.2 million or 3.4% operating margin for the second quarter 2019, compared to $13.0 million or 4.0% in second quarter 2018. Adjusted operating income1 was $12.4 million or 3.8% margin for the second quarter 2019, compared to $13.5 million or 4.2% in second quarter 2018. EBITDA1 was $12.6 million or 3.8% margin for the second quarter 2019, compared to $13.8 million or 4.3% in second quarter 2018. Adjusted EBITDA1 was $13.9 million or 4.2% margin for the second quarter 2019, compared to $14.3 million or 4.5% in second quarter 2018.

Second quarter 2019 diluted EPS were $0.66 compared to $0.81 in second quarter 2018. Second quarter 2019 adjusted diluted EPS1 were $0.74 compared to $0.84 in second quarter 2018.

Net cash generated from operating activities for the quarter ended June 28, 2019 was $22 million, a $6.0 million improvement compared to second quarter 2018. Days sales outstanding (DSO) was 63 days in the second quarter of 2019.

Total debt at June 28, 2019 was $73.0 million, which was down $4.0 million from $77.0 million at June 29, 2018. Cash at quarter-end was $70.3 million. As of June 28, 2019, total consolidated indebtedness to consolidated EBITDA1 (total leverage ratio) was 1.17x to 1.00x.

Total backlog at June 28, 2019 was $3.2 billion and funded backlog was $934 million. Backlog including LOGCAP V is $4.6 billion.

"Vectrus' growth continued in the second quarter, and we recorded sequential expansion in revenue, EBITDA margin1 and earnings per share, keeping with the expected progression of our results through the year," said Bill Noon, acting chief financial officer of Vectrus. "Operating cash generation in the quarter was strong at $22 million, and we expect to generate over 100 percent cash conversion compared to net income for the year. Our balance sheet and financial flexibility remain strong to support our strategy. Given the impacts to our GAAP results from the M&A and LOGCAP V pre-operational legal costs we are incurring this year, we have opted to increase our use of adjusted non-GAAP measures that we believe better reflect our operational performance."

Adjusting 2019 Guidance

Mr. Prow continued, "To reflect 2019 new business and current contract expansion results to date, and the Advantor acquisition, we now expect to generate revenue growth of 7 to 9 percent in 2019, which is up from our prior guidance of 2 to 4 percent. Additionally, to support this, and anticipated future growth, we have pulled forward investments in our global operations. Our enterprise wide performance improvement initiative, Enterprise Vectrus, is streamlining and automating our core program and support processes, transforming our supply chain, and more effectively integrating and leveraging our global operations to generate better client outcomes; while improving margins over time.  Therefore, while we have increased our revenue range, we have lowered and tightened our diluted EPS range, due primarily to higher non-operational costs, while slightly increasing the midpoint of adjusted EBITDA margin1. These efforts are in service of fulfilling the opportunity we have to transform Vectrus into a larger scale, higher value, differentiated platform."

Mr. Prow concluded, "We continue to believe that based on our current new business awards, pipeline, and anticipated timing on LOGCAP V revenue, we are on track to achieve double digit revenue growth in 2020, and are making great strides in driving toward our goal of $2.5 billion in annual revenue and 7% in EBITDA margin by 2023. We want to thank our teams around the world who support our servicemen and women in their critical missions and are focused on advancing our capabilities and competitive profile to further differentiate the company as an innovator in the emerging converged infrastructure market."

Vectrus is presenting non-GAAP measures including adjusted operating income and margin1, adjusted EBITDA and margin1, adjusted net income1, and adjusted diluted earnings per share1 to measure performance. These non-GAAP measures remove the impact of expenses associated with M&A and LOGCAP V pre-operational legal costs and, in the Company's opinion, better reflect the underlying operations of the business.

Vectrus' updated 2019 guidance ranges are included in the table below and assume interest expense of $6.0 million, operational capital expenditures of approximately $10.0 million, depreciation and amortization expense of $7.1 million, mandatory debt payments of $4.5 million, a tax rate of 22 percent and weighted average diluted shares outstanding of 11.6 million at December 31, 2019.

Additionally, full-year GAAP estimates include M&A related costs of $2.6 million and LOGCAP V pre-operational costs of $1.1 million, which are excluded from adjusted EBITDA1, adjusted Net Income1, and adjusted diluted EPS1 measures.

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 %
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 %
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 %
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 %
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29
Adjusted Net Income1 $35.5 to $38.2 to $36.9
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0

The Company notes that forward-looking statements of future performance made in this release, including 2019 guidance, 2020 revenue growth, the LOGCAP V award and the five-year growth plan 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 2019 Conference Call

Management will conduct a conference call with analysts and investors at 4:30 p.m. ET on Tuesday, August 6, 2019. 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 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 20, 2019, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 13692469.

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes:
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation.
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 %
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million.
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 %
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29
Adjusted Net Income1 $35.5 to $38.2 to $36.9
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0

About Vectrus

Vectrus is a leading global government services company 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 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 their customers' mission success. Vectrus is headquartered in Colorado Springs, Colo., and includes about 6,700 employees spanning 129 locations in 22 countries. In 2018, Vectrus generated sales of $1.3 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 "Adjusted 2019 Guidance" above and other assumptions contained therein for purposes of such guidance, other statements about our five-year growth plan, revenue (including 2020 revenue) and DSO, our credit facility, debt payments, expense savings, contract opportunities, bids and awards, including the LOGCAP V award, and CENTCOM and INDOPACOM task orders, collections, business strategy, outlook, objectives, plans, intentions or goals, 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. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to: our dependence on a few large contracts for a significant portion of our revenue; competition in our industry; our mix of cost-plus, cost-reimbursable, and firm-fixed price contracts; our dependence on the U.S. government and the importance of our maintaining a good relationship with the U.S. government, our ability to submit proposals for and/or win potential opportunities in our pipeline; our ability to retain and renew our existing contracts; protests of new awards; including protests of the LOGCAP V award and CENTCOM and INDOPACOM task orders; any acquisitions, investments or joint ventures, including the integration of acquisitions into our business; our international operations, including the economic, political and social conditions in the countries in which we conduct our businesses; changes in U.S. government military operations; changes in, or delays in the completion of, U.S. or international government budgets or government shutdowns; government regulations and compliance therewith, including changes to the Department of Defense procurement process; changes in technology; intellectual property matters; governmental investigations, reviews, audits and cost adjustments; contingencies related to actual or alleged environmental contamination, claims and concerns; our success in expanding our geographic footprint or broadening our customer base, markets and capabilities; our ability to realize the full amounts reflected in our backlog; impairment of goodwill; our performance of our contracts and our ability to control costs; our level of indebtedness; our compliance with the terms of our credit agreement; subcontractor and employee performance and conduct; our teaming arrangements with other contractors; economic and capital markets conditions; our ability to retain and recruit qualified personnel; our maintenance of safe work sites and equipment; our compliance with applicable environmental, health and safety regulations; our ability to maintain required security clearances; any disputes with labor unions; costs of outcome of any legal proceedings; security breaches and other disruptions to our information technology and operations; changes in our tax provisions, including under the Tax Cuts and Jobs Act, or exposure to additional income tax liabilities; changes in U.S. generally accepted accounting principles, including changes related to Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606); accounting estimates made in connection with our contracts; the adequacy of our insurance coverage; the volatility of our stock price; our exposure to interest rate risk; our compliance with public company accounting and financial reporting requirements; timing of payments by the U.S. government; risks and uncertainties relating to the spin-off from our former parent; and other factors set forth in Part I, Item 1A, - "Risk Factors," and elsewhere in our 2018 Annual Report on Form 10-K and described from time to time in our future reports filed with the 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.

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT:
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com 
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29
Adjusted Net Income1 $35.5 to $38.2 to $36.9
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0

 

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC.
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29,
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114
Adjusted Net Income1 $35.5 to $38.2 to $36.9 Selling, general and administrative expenses 19,843 16,070 39,762 33,865
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18 Operating income 11,193 12,998 21,606 21,670
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0 Interest expense, net (1,329) (1,140) (2,904) (2,305)
Income from operations before income taxes 9,864 11,858 18,702 19,365
Income tax expense 2,247 2,663 3,994 4,058
Net income $ 7,617 $ 9,195 $ 14,708 $ 15,307
Earnings per share
Basic $0.66 $0.82 $1.29 $1.37
Diluted $0.66 $0.81 $1.28 $1.35
Weighted average common shares outstanding - basic 11,455 11,235 11,376 11,191
Weighted average common shares outstanding - diluted 11,605 11,383 11,512 11,351

 

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC. VECTRUS, INC.
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS 
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended June 28, December 31,
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29, (In thousands, except share information) 2019 2018
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018 Assets (Unaudited)
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Current assets
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114 Cash $ 70,329 $ 66,145
Adjusted Net Income1 $35.5 to $38.2 to $36.9 Selling, general and administrative expenses 19,843 16,070 39,762 33,865 Receivables 237,247 232,119
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18 Operating income 11,193 12,998 21,606 21,670 Other current assets 20,907 15,063
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0 Interest expense, net (1,329) (1,140) (2,904) (2,305) Total current assets 328,483 313,327
Income from operations before income taxes 9,864 11,858 18,702 19,365 Property, plant, and equipment, net 16,253 13,419
Income tax expense 2,247 2,663 3,994 4,058 Goodwill 233,619 233,619
Net income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Intangible assets, net 13,853 8,630
Right-of-use assets 17,987
Earnings per share Other non-current assets 4,233 3,248
Basic $0.66 $0.82 $1.29 $1.37 Total non-current assets 285,945 258,916
Diluted $0.66 $0.81 $1.28 $1.35 Total Assets $ 614,428 $ 572,243
Weighted average common shares outstanding - basic 11,455 11,235 11,376 11,191 Liabilities and Shareholders' Equity
Weighted average common shares outstanding - diluted 11,605 11,383 11,512 11,351 Current liabilities
Accounts payable $ 157,486 $ 156,393
Compensation and other employee benefits 45,577 41,790
Short-term debt 5,500 4,500
Other accrued liabilities 37,217 22,303
Total current liabilities 245,780 224,986
Long-term debt, net 66,338 69,137
Deferred tax liability 52,460 55,358
Other non-current liabilities 10,174 1,462
Total non-current liabilities 128,972 125,957
Total liabilities 374,752 350,943
Commitments and contingencies
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; 11,506,228 and 11,266,906 shares issued and outstanding as of June 28, 2019 and December 31, 2018, respectively 115 113
Additional paid in capital 76,642 71,729
Retained earnings 167,583 152,616
Accumulated other comprehensive loss (4,664) (3,158)
Total shareholders' equity 239,676 221,300
Total Liabilities and Shareholders' Equity $ 614,428 $ 572,243

 

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC. VECTRUS, INC. VECTRUS, INC.
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended June 28, December 31, Six Months Ended
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29, (In thousands, except share information) 2019 2018 June 28, June 29,
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018 Assets (Unaudited) (In thousands) 2019 2018
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Current assets Operating activities
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114 Cash $ 70,329 $ 66,145 Net income $ 14,708 $ 15,307
Adjusted Net Income1 $35.5 to $38.2 to $36.9 Selling, general and administrative expenses 19,843 16,070 39,762 33,865 Receivables 237,247 232,119 Adjustments to reconcile net income to net cash provided by operating activities:
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18 Operating income 11,193 12,998 21,606 21,670 Other current assets 20,907 15,063 Depreciation expense 1,538 687
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0 Interest expense, net (1,329) (1,140) (2,904) (2,305) Total current assets 328,483 313,327 Amortization of intangible assets 1,277 937
Income from operations before income taxes 9,864 11,858 18,702 19,365 Property, plant, and equipment, net 16,253 13,419 Loss on disposal of property, plant, and equipment 2 51
Income tax expense 2,247 2,663 3,994 4,058 Goodwill 233,619 233,619 Stock-based compensation 4,031 2,521
Net income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Intangible assets, net 13,853 8,630 Amortization of debt issuance costs 201 213
Right-of-use assets 17,987 Changes in assets and liabilities:
Earnings per share Other non-current assets 4,233 3,248 Receivables (224) (8,820)
Basic $0.66 $0.82 $1.29 $1.37 Total non-current assets 285,945 258,916 Other assets (7,128) (4,518)
Diluted $0.66 $0.81 $1.28 $1.35 Total Assets $ 614,428 $ 572,243 Accounts payable 2,038 693
Weighted average common shares outstanding - basic 11,455 11,235 11,376 11,191 Liabilities and Shareholders' Equity Deferred taxes (2,579) (1,274)
Weighted average common shares outstanding - diluted 11,605 11,383 11,512 11,351 Current liabilities Compensation and other employee benefits 3,324 (1,950)
Accounts payable $ 157,486 $ 156,393 Other liabilities (1,738) 325
Compensation and other employee benefits 45,577 41,790 Net cash provided by operating activities 15,450 4,172
Short-term debt 5,500 4,500 Investing activities
Other accrued liabilities 37,217 22,303 Purchases of capital assets and intangibles (11,739) (764)
Total current liabilities 245,780 224,986 Acquisition of business, net of cash acquired (37,210)
Long-term debt, net 66,338 69,137 Net cash used in investing activities (11,739) (37,974)
Deferred tax liability 52,460 55,358 Financing activities
Other non-current liabilities 10,174 1,462 Repayments of long-term debt (2,000) (2,000)
Total non-current liabilities 128,972 125,957 Proceeds from revolver 98,000 55,000
Total liabilities 374,752 350,943 Repayments of revolver (98,000) (55,000)
Commitments and contingencies Proceeds from exercise of stock options 3,467 1,358
Shareholders' Equity Payments of employee withholding taxes on share-based compensation (768) (803)
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding Net cash provided by (used in) financing activities 699 (1,445)
Common stock; $0.01 par value; 100,000,000 shares authorized; 11,506,228 and 11,266,906 shares issued and outstanding as of June 28, 2019 and December 31, 2018, respectively 115 113 Exchange rate effect on cash (226) (1,248)
Additional paid in capital 76,642 71,729 Net change in cash 4,184 (36,495)
Retained earnings 167,583 152,616 Cash-beginning of year 66,145 77,453
Accumulated other comprehensive loss (4,664) (3,158) Cash-end of period $ 70,329 $ 40,958
Total shareholders' equity 239,676 221,300 Supplemental disclosure of cash flow information:
Total Liabilities and Shareholders' Equity $ 614,428 $ 572,243 Interest paid $ 2,818 $ 2,119
Income taxes paid $ 4,198 $ 7,891
Non-cash investing activities:
Purchase of capital assets on account $ 301 $ 481

Key Performance Indicators and Non-GAAP Financial Measures

The primary financial performance measures we use to manage our business and monitor results of operations are revenue trends and operating income trends.  In addition, we consider adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin to be useful to management and investors in evaluating our operating performance for the periods presented, 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.

Adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin and adjusted EBITDA margin, however, are not measures of financial performance under generally accepted accounting principles in the United States of America (GAAP) and should not be considered a substitute for net income and diluted earnings per share as determined in accordance with GAAP.  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, transaction and non-recurring integration 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, other income; significant charges or credits that impact current results but are not related to our ongoing operations and unusual and infrequent non-operating items and non-operating tax settlements or adjustments, such as revaluation of our deferred tax liability as a result of the Tax Cuts and Jobs Act, and net settlement of uncertain tax positions.

"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, transaction and non-recurring integration 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.

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC. VECTRUS, INC. VECTRUS, INC. (In thousands)
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) EBITDA (Non-GAAP Measures) Three months ended Six Months Ended
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus June 28, June 29, June 28, June 29,
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended June 28, December 31, Six Months Ended 2019 2018 2019 2018
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29, (In thousands, except share information) 2019 2018 June 28, June 29, Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018 Assets (Unaudited) (In thousands) 2019 2018
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Current assets Operating activities Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114 Cash $ 70,329 $ 66,145 Net income $ 14,708 $ 15,307 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 %
Adjusted Net Income1 $35.5 to $38.2 to $36.9 Selling, general and administrative expenses 19,843 16,070 39,762 33,865 Receivables 237,247 232,119 Adjustments to reconcile net income to net cash provided by operating activities:
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18 Operating income 11,193 12,998 21,606 21,670 Other current assets 20,907 15,063 Depreciation expense 1,538 687 Add:
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0 Interest expense, net (1,329) (1,140) (2,904) (2,305) Total current assets 328,483 313,327 Amortization of intangible assets 1,277 937 Depreciation and Amortization $ 1,456 $ 815 $ 2,815 $ 1,624
Income from operations before income taxes 9,864 11,858 18,702 19,365 Property, plant, and equipment, net 16,253 13,419 Loss on disposal of property, plant, and equipment 2 51
Income tax expense 2,247 2,663 3,994 4,058 Goodwill 233,619 233,619 Stock-based compensation 4,031 2,521 EBITDA $ 12,649 $ 13,813 $ 24,421 $ 23,294
Net income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Intangible assets, net 13,853 8,630 Amortization of debt issuance costs 201 213 EBITDA Margin 3.8 % 4.3 % 3.7 % 3.6 %
Right-of-use assets 17,987 Changes in assets and liabilities:
Earnings per share Other non-current assets 4,233 3,248 Receivables (224) (8,820) Add:
Basic $0.66 $0.82 $1.29 $1.37 Total non-current assets 285,945 258,916 Other assets (7,128) (4,518) M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669
Diluted $0.66 $0.81 $1.28 $1.35 Total Assets $ 614,428 $ 572,243 Accounts payable 2,038 693 LOGCAP V Pre-Operational Legal Costs 579 579
Weighted average common shares outstanding - basic 11,455 11,235 11,376 11,191 Liabilities and Shareholders' Equity Deferred taxes (2,579) (1,274)
Weighted average common shares outstanding - diluted 11,605 11,383 11,512 11,351 Current liabilities Compensation and other employee benefits 3,324 (1,950) Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669
Accounts payable $ 157,486 $ 156,393 Other liabilities (1,738) 325
Compensation and other employee benefits 45,577 41,790 Net cash provided by operating activities 15,450 4,172 Adjusted EBITDA $ 13,895 $ 14,305 $ 26,712 $ 24,963
Short-term debt 5,500 4,500 Investing activities Adjusted EBITDA Margin 4.2 % 4.5 % 4.1 % 3.9 %
Other accrued liabilities 37,217 22,303 Purchases of capital assets and intangibles (11,739) (764)
Total current liabilities 245,780 224,986 Acquisition of business, net of cash acquired (37,210)
Long-term debt, net 66,338 69,137 Net cash used in investing activities (11,739) (37,974)
Deferred tax liability 52,460 55,358 Financing activities
Other non-current liabilities 10,174 1,462 Repayments of long-term debt (2,000) (2,000)
Total non-current liabilities 128,972 125,957 Proceeds from revolver 98,000 55,000
Total liabilities 374,752 350,943 Repayments of revolver (98,000) (55,000)
Commitments and contingencies Proceeds from exercise of stock options 3,467 1,358
Shareholders' Equity Payments of employee withholding taxes on share-based compensation (768) (803)
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding Net cash provided by (used in) financing activities 699 (1,445)
Common stock; $0.01 par value; 100,000,000 shares authorized; 11,506,228 and 11,266,906 shares issued and outstanding as of June 28, 2019 and December 31, 2018, respectively 115 113 Exchange rate effect on cash (226) (1,248)
Additional paid in capital 76,642 71,729 Net change in cash 4,184 (36,495)
Retained earnings 167,583 152,616 Cash-beginning of year 66,145 77,453
Accumulated other comprehensive loss (4,664) (3,158) Cash-end of period $ 70,329 $ 40,958
Total shareholders' equity 239,676 221,300 Supplemental disclosure of cash flow information:
Total Liabilities and Shareholders' Equity $ 614,428 $ 572,243 Interest paid $ 2,818 $ 2,119
Income taxes paid $ 4,198 $ 7,891
Non-cash investing activities:
Purchase of capital assets on account $ 301 $ 481

 

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC. VECTRUS, INC. VECTRUS, INC. (In thousands) (In thousands, except per share data)
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) EBITDA (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Net Income and Adjusted Diluted Earnings Per Share (Non-GAAP Measures) Three months ended Six Months Ended
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29,
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended June 28, December 31, Six Months Ended 2019 2018 2019 2018 2019 2018 2019 2018
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29, (In thousands, except share information) 2019 2018 June 28, June 29, Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018 Assets (Unaudited) (In thousands) 2019 2018 Net Income $ 7,617 $ 9,195 $ 14,708 $ 15,307
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Current assets Operating activities Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 GAAP Diluted EPS $ 0.66 $ 0.81 $ 1.28 $ 1.35
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114 Cash $ 70,329 $ 66,145 Net income $ 14,708 $ 15,307 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 %
Adjusted Net Income1 $35.5 to $38.2 to $36.9 Selling, general and administrative expenses 19,843 16,070 39,762 33,865 Receivables 237,247 232,119 Adjustments to reconcile net income to net cash provided by operating activities: Add:
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18 Operating income 11,193 12,998 21,606 21,670 Other current assets 20,907 15,063 Depreciation expense 1,538 687 Add: M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0 Interest expense, net (1,329) (1,140) (2,904) (2,305) Total current assets 328,483 313,327 Amortization of intangible assets 1,277 937 Depreciation and Amortization $ 1,456 $ 815 $ 2,815 $ 1,624 LOGCAP V Pre-Operational Legal Costs 579 579
Income from operations before income taxes 9,864 11,858 18,702 19,365 Property, plant, and equipment, net 16,253 13,419 Loss on disposal of property, plant, and equipment 2 51
Income tax expense 2,247 2,663 3,994 4,058 Goodwill 233,619 233,619 Stock-based compensation 4,031 2,521 EBITDA $ 12,649 $ 13,813 $ 24,421 $ 23,294 Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669
Net income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Intangible assets, net 13,853 8,630 Amortization of debt issuance costs 201 213 EBITDA Margin 3.8 % 4.3 % 3.7 % 3.6 %
Right-of-use assets 17,987 Changes in assets and liabilities: Tax impact of adjustments $ (284) $ (111) $ (489) $ (350)
Earnings per share Other non-current assets 4,233 3,248 Receivables (224) (8,820) Add:
Basic $0.66 $0.82 $1.29 $1.37 Total non-current assets 285,945 258,916 Other assets (7,128) (4,518) M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 Adjusted Net Income $ 8,579 $ 9,576 $ 16,510 $ 16,626
Diluted $0.66 $0.81 $1.28 $1.35 Total Assets $ 614,428 $ 572,243 Accounts payable 2,038 693 LOGCAP V Pre-Operational Legal Costs 579 579 Adjusted Net Income Margin 2.6 % 3.0 % 2.5 % 2.6 %
Weighted average common shares outstanding - basic 11,455 11,235 11,376 11,191 Liabilities and Shareholders' Equity Deferred taxes (2,579) (1,274)
Weighted average common shares outstanding - diluted 11,605 11,383 11,512 11,351 Current liabilities Compensation and other employee benefits 3,324 (1,950) Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 Weighted average common shares outstanding, diluted 11,605 11,383 11,512 11,351
Accounts payable $ 157,486 $ 156,393 Other liabilities (1,738) 325 Adjusted Diluted EPS $ 0.74 $ 0.84 $ 1.43 $ 1.46
Compensation and other employee benefits 45,577 41,790 Net cash provided by operating activities 15,450 4,172 Adjusted EBITDA $ 13,895 $ 14,305 $ 26,712 $ 24,963
Short-term debt 5,500 4,500 Investing activities Adjusted EBITDA Margin 4.2 % 4.5 % 4.1 % 3.9 %
Other accrued liabilities 37,217 22,303 Purchases of capital assets and intangibles (11,739) (764)
Total current liabilities 245,780 224,986 Acquisition of business, net of cash acquired (37,210)
Long-term debt, net 66,338 69,137 Net cash used in investing activities (11,739) (37,974)
Deferred tax liability 52,460 55,358 Financing activities
Other non-current liabilities 10,174 1,462 Repayments of long-term debt (2,000) (2,000)
Total non-current liabilities 128,972 125,957 Proceeds from revolver 98,000 55,000
Total liabilities 374,752 350,943 Repayments of revolver (98,000) (55,000)
Commitments and contingencies Proceeds from exercise of stock options 3,467 1,358
Shareholders' Equity Payments of employee withholding taxes on share-based compensation (768) (803)
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding Net cash provided by (used in) financing activities 699 (1,445)
Common stock; $0.01 par value; 100,000,000 shares authorized; 11,506,228 and 11,266,906 shares issued and outstanding as of June 28, 2019 and December 31, 2018, respectively 115 113 Exchange rate effect on cash (226) (1,248)
Additional paid in capital 76,642 71,729 Net change in cash 4,184 (36,495)
Retained earnings 167,583 152,616 Cash-beginning of year 66,145 77,453
Accumulated other comprehensive loss (4,664) (3,158) Cash-end of period $ 70,329 $ 40,958
Total shareholders' equity 239,676 221,300 Supplemental disclosure of cash flow information:
Total Liabilities and Shareholders' Equity $ 614,428 $ 572,243 Interest paid $ 2,818 $ 2,119
Income taxes paid $ 4,198 $ 7,891
Non-cash investing activities:
Purchase of capital assets on account $ 301 $ 481

 

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC. VECTRUS, INC. VECTRUS, INC. (In thousands) (In thousands, except per share data) (In thousands)
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) EBITDA (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Net Income and Adjusted Diluted Earnings Per Share (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Operating Income and Adjusted Operating Margin (Non-GAAP Measures) Three months ended Six Months Ended
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29,
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended June 28, December 31, Six Months Ended 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29, (In thousands, except share information) 2019 2018 June 28, June 29, Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018 Assets (Unaudited) (In thousands) 2019 2018 Net Income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Current assets Operating activities Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 GAAP Diluted EPS $ 0.66 $ 0.81 $ 1.28 $ 1.35 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 %
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114 Cash $ 70,329 $ 66,145 Net income $ 14,708 $ 15,307 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 %
Adjusted Net Income1 $35.5 to $38.2 to $36.9 Selling, general and administrative expenses 19,843 16,070 39,762 33,865 Receivables 237,247 232,119 Adjustments to reconcile net income to net cash provided by operating activities: Add: Add:
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18 Operating income 11,193 12,998 21,606 21,670 Other current assets 20,907 15,063 Depreciation expense 1,538 687 Add: M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0 Interest expense, net (1,329) (1,140) (2,904) (2,305) Total current assets 328,483 313,327 Amortization of intangible assets 1,277 937 Depreciation and Amortization $ 1,456 $ 815 $ 2,815 $ 1,624 LOGCAP V Pre-Operational Legal Costs 579 579 LOGCAP V Pre-Operational Legal Costs 579 579
Income from operations before income taxes 9,864 11,858 18,702 19,365 Property, plant, and equipment, net 16,253 13,419 Loss on disposal of property, plant, and equipment 2 51
Income tax expense 2,247 2,663 3,994 4,058 Goodwill 233,619 233,619 Stock-based compensation 4,031 2,521 EBITDA $ 12,649 $ 13,813 $ 24,421 $ 23,294 Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669
Net income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Intangible assets, net 13,853 8,630 Amortization of debt issuance costs 201 213 EBITDA Margin 3.8 % 4.3 % 3.7 % 3.6 %
Right-of-use assets 17,987 Changes in assets and liabilities: Tax impact of adjustments $ (284) $ (111) $ (489) $ (350) Adjusted Operating Income $ 12,439 $ 13,490 $ 23,897 $ 23,339
Earnings per share Other non-current assets 4,233 3,248 Receivables (224) (8,820) Add: Adjusted Operating Margin 3.8 % 4.2 % 3.6 % 3.6 %
Basic $0.66 $0.82 $1.29 $1.37 Total non-current assets 285,945 258,916 Other assets (7,128) (4,518) M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 Adjusted Net Income $ 8,579 $ 9,576 $ 16,510 $ 16,626
Diluted $0.66 $0.81 $1.28 $1.35 Total Assets $ 614,428 $ 572,243 Accounts payable 2,038 693 LOGCAP V Pre-Operational Legal Costs 579 579 Adjusted Net Income Margin 2.6 % 3.0 % 2.5 % 2.6 %
Weighted average common shares outstanding - basic 11,455 11,235 11,376 11,191 Liabilities and Shareholders' Equity Deferred taxes (2,579) (1,274)
Weighted average common shares outstanding - diluted 11,605 11,383 11,512 11,351 Current liabilities Compensation and other employee benefits 3,324 (1,950) Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 Weighted average common shares outstanding, diluted 11,605 11,383 11,512 11,351
Accounts payable $ 157,486 $ 156,393 Other liabilities (1,738) 325 Adjusted Diluted EPS $ 0.74 $ 0.84 $ 1.43 $ 1.46
Compensation and other employee benefits 45,577 41,790 Net cash provided by operating activities 15,450 4,172 Adjusted EBITDA $ 13,895 $ 14,305 $ 26,712 $ 24,963
Short-term debt 5,500 4,500 Investing activities Adjusted EBITDA Margin 4.2 % 4.5 % 4.1 % 3.9 %
Other accrued liabilities 37,217 22,303 Purchases of capital assets and intangibles (11,739) (764)
Total current liabilities 245,780 224,986 Acquisition of business, net of cash acquired (37,210)
Long-term debt, net 66,338 69,137 Net cash used in investing activities (11,739) (37,974)
Deferred tax liability 52,460 55,358 Financing activities
Other non-current liabilities 10,174 1,462 Repayments of long-term debt (2,000) (2,000)
Total non-current liabilities 128,972 125,957 Proceeds from revolver 98,000 55,000
Total liabilities 374,752 350,943 Repayments of revolver (98,000) (55,000)
Commitments and contingencies Proceeds from exercise of stock options 3,467 1,358
Shareholders' Equity Payments of employee withholding taxes on share-based compensation (768) (803)
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding Net cash provided by (used in) financing activities 699 (1,445)
Common stock; $0.01 par value; 100,000,000 shares authorized; 11,506,228 and 11,266,906 shares issued and outstanding as of June 28, 2019 and December 31, 2018, respectively 115 113 Exchange rate effect on cash (226) (1,248)
Additional paid in capital 76,642 71,729 Net change in cash 4,184 (36,495)
Retained earnings 167,583 152,616 Cash-beginning of year 66,145 77,453
Accumulated other comprehensive loss (4,664) (3,158) Cash-end of period $ 70,329 $ 40,958
Total shareholders' equity 239,676 221,300 Supplemental disclosure of cash flow information:
Total Liabilities and Shareholders' Equity $ 614,428 $ 572,243 Interest paid $ 2,818 $ 2,119
Income taxes paid $ 4,198 $ 7,891
Non-cash investing activities:
Purchase of capital assets on account $ 301 $ 481

 

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC. VECTRUS, INC. VECTRUS, INC. (In thousands) (In thousands, except per share data) (In thousands) (In millions)
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) EBITDA (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Net Income and Adjusted Diluted Earnings Per Share (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Operating Income and Adjusted Operating Margin (Non-GAAP Measures) Three months ended Six Months Ended Adjusted EBITDA Margin Guidance and 2018 Actual (Non-GAAP Measures) 2019 Guidance High 2019 Guidance Mid 2019 Guidance Low 2018 Actual
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29,
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended June 28, December 31, Six Months Ended 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Revenue $ 1,390 $ 1,380 $ 1,370 $ 1,279
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29, (In thousands, except share information) 2019 2018 June 28, June 29, Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018 Assets (Unaudited) (In thousands) 2019 2018 Net Income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 Operating Income $ 51.4 $ 49.8 $ 48.0 $ 48.3
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Current assets Operating activities Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 GAAP Diluted EPS $ 0.66 $ 0.81 $ 1.28 $ 1.35 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 % Operating Margin 3.7 % 3.6 % 3.5 % 3.8 %
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114 Cash $ 70,329 $ 66,145 Net income $ 14,708 $ 15,307 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 %
Adjusted Net Income1 $35.5 to $38.2 to $36.9 Selling, general and administrative expenses 19,843 16,070 39,762 33,865 Receivables 237,247 232,119 Adjustments to reconcile net income to net cash provided by operating activities: Add: Add: Add:
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18 Operating income 11,193 12,998 21,606 21,670 Other current assets 20,907 15,063 Depreciation expense 1,538 687 Add: M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 Depreciation and Amortization $ 7.1 $ 7.1 $ 7.1 $ 3.8
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0 Interest expense, net (1,329) (1,140) (2,904) (2,305) Total current assets 328,483 313,327 Amortization of intangible assets 1,277 937 Depreciation and Amortization $ 1,456 $ 815 $ 2,815 $ 1,624 LOGCAP V Pre-Operational Legal Costs 579 579 LOGCAP V Pre-Operational Legal Costs 579 579
Income from operations before income taxes 9,864 11,858 18,702 19,365 Property, plant, and equipment, net 16,253 13,419 Loss on disposal of property, plant, and equipment 2 51 EBITDA $ 58.5 $ 56.9 $ 55.1 $ 52.1
Income tax expense 2,247 2,663 3,994 4,058 Goodwill 233,619 233,619 Stock-based compensation 4,031 2,521 EBITDA $ 12,649 $ 13,813 $ 24,421 $ 23,294 Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 EBITDA Margin 4.2 % 4.1 % 4.0 % 4.1 %
Net income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Intangible assets, net 13,853 8,630 Amortization of debt issuance costs 201 213 EBITDA Margin 3.8 % 4.3 % 3.7 % 3.6 %
Right-of-use assets 17,987 Changes in assets and liabilities: Tax impact of adjustments $ (284) $ (111) $ (489) $ (350) Adjusted Operating Income $ 12,439 $ 13,490 $ 23,897 $ 23,339 Add:
Earnings per share Other non-current assets 4,233 3,248 Receivables (224) (8,820) Add: Adjusted Operating Margin 3.8 % 4.2 % 3.6 % 3.6 % M&A Related Costs $ 2.6 $ 2.6 $ 2.6 $ 1.5
Basic $0.66 $0.82 $1.29 $1.37 Total non-current assets 285,945 258,916 Other assets (7,128) (4,518) M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 Adjusted Net Income $ 8,579 $ 9,576 $ 16,510 $ 16,626 LOGCAP V Pre-Operational Legal Costs 1.1 1.1 1.1
Diluted $0.66 $0.81 $1.28 $1.35 Total Assets $ 614,428 $ 572,243 Accounts payable 2,038 693 LOGCAP V Pre-Operational Legal Costs 579 579 Adjusted Net Income Margin 2.6 % 3.0 % 2.5 % 2.6 %
Weighted average common shares outstanding - basic 11,455 11,235 11,376 11,191 Liabilities and Shareholders' Equity Deferred taxes (2,579) (1,274) Subtotal $ 3.7 $ 3.7 $ 3.7 $ 1.5
Weighted average common shares outstanding - diluted 11,605 11,383 11,512 11,351 Current liabilities Compensation and other employee benefits 3,324 (1,950) Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 Weighted average common shares outstanding, diluted 11,605 11,383 11,512 11,351
Accounts payable $ 157,486 $ 156,393 Other liabilities (1,738) 325 Adjusted Diluted EPS $ 0.74 $ 0.84 $ 1.43 $ 1.46 Adjusted EBITDA $ 62.2 $ 60.6 $ 58.8 $ 53.6
Compensation and other employee benefits 45,577 41,790 Net cash provided by operating activities 15,450 4,172 Adjusted EBITDA $ 13,895 $ 14,305 $ 26,712 $ 24,963 Adjusted EBITDA Margin 4.5 % 4.4 % 4.3 % 4.2 %
Short-term debt 5,500 4,500 Investing activities Adjusted EBITDA Margin 4.2 % 4.5 % 4.1 % 3.9 %
Other accrued liabilities 37,217 22,303 Purchases of capital assets and intangibles (11,739) (764)
Total current liabilities 245,780 224,986 Acquisition of business, net of cash acquired (37,210)
Long-term debt, net 66,338 69,137 Net cash used in investing activities (11,739) (37,974)
Deferred tax liability 52,460 55,358 Financing activities
Other non-current liabilities 10,174 1,462 Repayments of long-term debt (2,000) (2,000)
Total non-current liabilities 128,972 125,957 Proceeds from revolver 98,000 55,000
Total liabilities 374,752 350,943 Repayments of revolver (98,000) (55,000)
Commitments and contingencies Proceeds from exercise of stock options 3,467 1,358
Shareholders' Equity Payments of employee withholding taxes on share-based compensation (768) (803)
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding Net cash provided by (used in) financing activities 699 (1,445)
Common stock; $0.01 par value; 100,000,000 shares authorized; 11,506,228 and 11,266,906 shares issued and outstanding as of June 28, 2019 and December 31, 2018, respectively 115 113 Exchange rate effect on cash (226) (1,248)
Additional paid in capital 76,642 71,729 Net change in cash 4,184 (36,495)
Retained earnings 167,583 152,616 Cash-beginning of year 66,145 77,453
Accumulated other comprehensive loss (4,664) (3,158) Cash-end of period $ 70,329 $ 40,958
Total shareholders' equity 239,676 221,300 Supplemental disclosure of cash flow information:
Total Liabilities and Shareholders' Equity $ 614,428 $ 572,243 Interest paid $ 2,818 $ 2,119
Income taxes paid $ 4,198 $ 7,891
Non-cash investing activities:
Purchase of capital assets on account $ 301 $ 481

 

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC. VECTRUS, INC. VECTRUS, INC. (In thousands) (In thousands, except per share data) (In thousands) (In millions) (In millions, except per share data)
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) EBITDA (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Net Income and Adjusted Diluted Earnings Per Share (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Operating Income and Adjusted Operating Margin (Non-GAAP Measures) Three months ended Six Months Ended Adjusted EBITDA Margin Guidance and 2018 Actual (Non-GAAP Measures) 2019 Guidance High 2019 Guidance Mid 2019 Guidance Low 2018 Actual Adjusted Diluted Earnings Per Share Guidance (Non-GAAP Measures) 2019 Guidance High 2019 Guidance  Mid 2019 Guidance Low
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29,
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended June 28, December 31, Six Months Ended 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Revenue $ 1,390 $ 1,380 $ 1,370 $ 1,279 Net Income $ 35.4 $ 34.1 $ 32.7
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29, (In thousands, except share information) 2019 2018 June 28, June 29, Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 GAAP Diluted EPS $ 3.05 $ 2.94 $ 2.82
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018 Assets (Unaudited) (In thousands) 2019 2018 Net Income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 Operating Income $ 51.4 $ 49.8 $ 48.0 $ 48.3
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Current assets Operating activities Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 GAAP Diluted EPS $ 0.66 $ 0.81 $ 1.28 $ 1.35 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 % Operating Margin 3.7 % 3.6 % 3.5 % 3.8 % Add:
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114 Cash $ 70,329 $ 66,145 Net income $ 14,708 $ 15,307 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 % M&A Related Costs $ 2.6 $ 2.6 $ 2.6
Adjusted Net Income1 $35.5 to $38.2 to $36.9 Selling, general and administrative expenses 19,843 16,070 39,762 33,865 Receivables 237,247 232,119 Adjustments to reconcile net income to net cash provided by operating activities: Add: Add: Add: LOGCAP V Pre-Operational Legal Costs 1.1 1.1 1.1
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18 Operating income 11,193 12,998 21,606 21,670 Other current assets 20,907 15,063 Depreciation expense 1,538 687 Add: M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 Depreciation and Amortization $ 7.1 $ 7.1 $ 7.1 $ 3.8
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0 Interest expense, net (1,329) (1,140) (2,904) (2,305) Total current assets 328,483 313,327 Amortization of intangible assets 1,277 937 Depreciation and Amortization $ 1,456 $ 815 $ 2,815 $ 1,624 LOGCAP V Pre-Operational Legal Costs 579 579 LOGCAP V Pre-Operational Legal Costs 579 579 Subtotal $ 3.7 $ 3.7 $ 3.7
Income from operations before income taxes 9,864 11,858 18,702 19,365 Property, plant, and equipment, net 16,253 13,419 Loss on disposal of property, plant, and equipment 2 51 EBITDA $ 58.5 $ 56.9 $ 55.1 $ 52.1
Income tax expense 2,247 2,663 3,994 4,058 Goodwill 233,619 233,619 Stock-based compensation 4,031 2,521 EBITDA $ 12,649 $ 13,813 $ 24,421 $ 23,294 Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 EBITDA Margin 4.2 % 4.1 % 4.0 % 4.1 % Tax impact of adjustments $ (0.9) $ (0.9) $ (0.9)
Net income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Intangible assets, net 13,853 8,630 Amortization of debt issuance costs 201 213 EBITDA Margin 3.8 % 4.3 % 3.7 % 3.6 %
Right-of-use assets 17,987 Changes in assets and liabilities: Tax impact of adjustments $ (284) $ (111) $ (489) $ (350) Adjusted Operating Income $ 12,439 $ 13,490 $ 23,897 $ 23,339 Add: Adjusted Net Income $ 38.2 $ 36.9 $ 35.5
Earnings per share Other non-current assets 4,233 3,248 Receivables (224) (8,820) Add: Adjusted Operating Margin 3.8 % 4.2 % 3.6 % 3.6 % M&A Related Costs $ 2.6 $ 2.6 $ 2.6 $ 1.5
Basic $0.66 $0.82 $1.29 $1.37 Total non-current assets 285,945 258,916 Other assets (7,128) (4,518) M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 Adjusted Net Income $ 8,579 $ 9,576 $ 16,510 $ 16,626 LOGCAP V Pre-Operational Legal Costs 1.1 1.1 1.1 Weighted average common shares outstanding, diluted 11.6 11.6 11.6
Diluted $0.66 $0.81 $1.28 $1.35 Total Assets $ 614,428 $ 572,243 Accounts payable 2,038 693 LOGCAP V Pre-Operational Legal Costs 579 579 Adjusted Net Income Margin 2.6 % 3.0 % 2.5 % 2.6 %
Weighted average common shares outstanding - basic 11,455 11,235 11,376 11,191 Liabilities and Shareholders' Equity Deferred taxes (2,579) (1,274) Subtotal $ 3.7 $ 3.7 $ 3.7 $ 1.5 Adjusted Diluted EPS $ 3.29 $ 3.18 $ 3.06
Weighted average common shares outstanding - diluted 11,605 11,383 11,512 11,351 Current liabilities Compensation and other employee benefits 3,324 (1,950) Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 Weighted average common shares outstanding, diluted 11,605 11,383 11,512 11,351
Accounts payable $ 157,486 $ 156,393 Other liabilities (1,738) 325 Adjusted Diluted EPS $ 0.74 $ 0.84 $ 1.43 $ 1.46 Adjusted EBITDA $ 62.2 $ 60.6 $ 58.8 $ 53.6
Compensation and other employee benefits 45,577 41,790 Net cash provided by operating activities 15,450 4,172 Adjusted EBITDA $ 13,895 $ 14,305 $ 26,712 $ 24,963 Adjusted EBITDA Margin 4.5 % 4.4 % 4.3 % 4.2 %
Short-term debt 5,500 4,500 Investing activities Adjusted EBITDA Margin 4.2 % 4.5 % 4.1 % 3.9 %
Other accrued liabilities 37,217 22,303 Purchases of capital assets and intangibles (11,739) (764)
Total current liabilities 245,780 224,986 Acquisition of business, net of cash acquired (37,210)
Long-term debt, net 66,338 69,137 Net cash used in investing activities (11,739) (37,974)
Deferred tax liability 52,460 55,358 Financing activities
Other non-current liabilities 10,174 1,462 Repayments of long-term debt (2,000) (2,000)
Total non-current liabilities 128,972 125,957 Proceeds from revolver 98,000 55,000
Total liabilities 374,752 350,943 Repayments of revolver (98,000) (55,000)
Commitments and contingencies Proceeds from exercise of stock options 3,467 1,358
Shareholders' Equity Payments of employee withholding taxes on share-based compensation (768) (803)
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding Net cash provided by (used in) financing activities 699 (1,445)
Common stock; $0.01 par value; 100,000,000 shares authorized; 11,506,228 and 11,266,906 shares issued and outstanding as of June 28, 2019 and December 31, 2018, respectively 115 113 Exchange rate effect on cash (226) (1,248)
Additional paid in capital 76,642 71,729 Net change in cash 4,184 (36,495)
Retained earnings 167,583 152,616 Cash-beginning of year 66,145 77,453
Accumulated other comprehensive loss (4,664) (3,158) Cash-end of period $ 70,329 $ 40,958
Total shareholders' equity 239,676 221,300 Supplemental disclosure of cash flow information:
Total Liabilities and Shareholders' Equity $ 614,428 $ 572,243 Interest paid $ 2,818 $ 2,119
Income taxes paid $ 4,198 $ 7,891
Non-cash investing activities:
Purchase of capital assets on account $ 301 $ 481

 

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC. VECTRUS, INC. VECTRUS, INC. (In thousands) (In thousands, except per share data) (In thousands) (In millions) (In millions, except per share data) (In millions)
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) EBITDA (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Net Income and Adjusted Diluted Earnings Per Share (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Operating Income and Adjusted Operating Margin (Non-GAAP Measures) Three months ended Six Months Ended Adjusted EBITDA Margin Guidance and 2018 Actual (Non-GAAP Measures) 2019 Guidance High 2019 Guidance Mid 2019 Guidance Low 2018 Actual Adjusted Diluted Earnings Per Share Guidance (Non-GAAP Measures) 2019 Guidance High 2019 Guidance  Mid 2019 Guidance Low Adjusted Operating Margin Guidance and 2018 Actual (Non-GAAP Measures) 2019 Guidance High 2019 Guidance Mid 2019 Guidance Low 2018 Actual
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29,
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended June 28, December 31, Six Months Ended 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Revenue $ 1,390 $ 1,380 $ 1,370 $ 1,279 Net Income $ 35.4 $ 34.1 $ 32.7 Revenue $ 1,390 $ 1,380 $ 1,370 $ 1,279
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29, (In thousands, except share information) 2019 2018 June 28, June 29, Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 GAAP Diluted EPS $ 3.05 $ 2.94 $ 2.82
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018 Assets (Unaudited) (In thousands) 2019 2018 Net Income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 Operating Income $ 51.4 $ 49.8 $ 48.0 $ 48.3 Operating Income $ 51.4 $ 49.8 $ 48.0 $ 48.3
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Current assets Operating activities Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 GAAP Diluted EPS $ 0.66 $ 0.81 $ 1.28 $ 1.35 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 % Operating Margin 3.7 % 3.6 % 3.5 % 3.8 % Add: Operating Margin 3.7 % 3.6 % 3.5 % 3.8 %
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114 Cash $ 70,329 $ 66,145 Net income $ 14,708 $ 15,307 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 % M&A Related Costs $ 2.6 $ 2.6 $ 2.6
Adjusted Net Income1 $35.5 to $38.2 to $36.9 Selling, general and administrative expenses 19,843 16,070 39,762 33,865 Receivables 237,247 232,119 Adjustments to reconcile net income to net cash provided by operating activities: Add: Add: Add: LOGCAP V Pre-Operational Legal Costs 1.1 1.1 1.1 Add:
Adjusted Diluted EPS1,2 $3.06 to $3.29 to $3.18 Operating income 11,193 12,998 21,606 21,670 Other current assets 20,907 15,063 Depreciation expense 1,538 687 Add: M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 Depreciation and Amortization $ 7.1 $ 7.1 $ 7.1 $ 3.8 M&A Related Costs $ 2.6 $ 2.6 $ 2.6 $ 1.5
Net Cash Provided by Operating Activities $38.0 to $42.0 $40.0 to $46.0 $40.0 $43.0 Interest expense, net (1,329) (1,140) (2,904) (2,305) Total current assets 328,483 313,327 Amortization of intangible assets 1,277 937 Depreciation and Amortization $ 1,456 $ 815 $ 2,815 $ 1,624 LOGCAP V Pre-Operational Legal Costs 579 579 LOGCAP V Pre-Operational Legal Costs 579 579 Subtotal $ 3.7 $ 3.7 $ 3.7 LOGCAP V Pre-Operational Legal Costs 1.1 1.1 1.1
Income from operations before income taxes 9,864 11,858 18,702 19,365 Property, plant, and equipment, net 16,253 13,419 Loss on disposal of property, plant, and equipment 2 51 EBITDA $ 58.5 $ 56.9 $ 55.1 $ 52.1
Income tax expense 2,247 2,663 3,994 4,058 Goodwill 233,619 233,619 Stock-based compensation 4,031 2,521 EBITDA $ 12,649 $ 13,813 $ 24,421 $ 23,294 Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 EBITDA Margin 4.2 % 4.1 % 4.0 % 4.1 % Tax impact of adjustments $ (0.9) $ (0.9) $ (0.9) Subtotal $ 3.7 $ 3.7 $ 3.7 $ 1.5
Net income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Intangible assets, net 13,853 8,630 Amortization of debt issuance costs 201 213 EBITDA Margin 3.8 % 4.3 % 3.7 % 3.6 %
Right-of-use assets 17,987 Changes in assets and liabilities: Tax impact of adjustments $ (284) $ (111) $ (489) $ (350) Adjusted Operating Income $ 12,439 $ 13,490 $ 23,897 $ 23,339 Add: Adjusted Net Income $ 38.2 $ 36.9 $ 35.5 Adjusted Operating Income $ 55.1 $ 53.5 $ 51.7 $ 49.8
Earnings per share Other non-current assets 4,233 3,248 Receivables (224) (8,820) Add: Adjusted Operating Margin 3.8 % 4.2 % 3.6 % 3.6 % M&A Related Costs $ 2.6 $ 2.6 $ 2.6 $ 1.5 Adjusted Operating Margin 4.0 % 3.9 % 3.8 % 3.9 %
Basic $0.66 $0.82 $1.29 $1.37 Total non-current assets 285,945 258,916 Other assets (7,128) (4,518) M&A Related Costs $ 667 $ 492 $ 1,712 $ 1,669 Adjusted Net Income $ 8,579 $ 9,576 $ 16,510 $ 16,626 LOGCAP V Pre-Operational Legal Costs 1.1 1.1 1.1 Weighted average common shares outstanding, diluted 11.6 11.6 11.6
Diluted $0.66 $0.81 $1.28 $1.35 Total Assets $ 614,428 $ 572,243 Accounts payable 2,038 693 LOGCAP V Pre-Operational Legal Costs 579 579 Adjusted Net Income Margin 2.6 % 3.0 % 2.5 % 2.6 %
Weighted average common shares outstanding - basic 11,455 11,235 11,376 11,191 Liabilities and Shareholders' Equity Deferred taxes (2,579) (1,274) Subtotal $ 3.7 $ 3.7 $ 3.7 $ 1.5 Adjusted Diluted EPS $ 3.29 $ 3.18 $ 3.06
Weighted average common shares outstanding - diluted 11,605 11,383 11,512 11,351 Current liabilities Compensation and other employee benefits 3,324 (1,950) Subtotal $ 1,246 $ 492 $ 2,291 $ 1,669 Weighted average common shares outstanding, diluted 11,605 11,383 11,512 11,351
Accounts payable $ 157,486 $ 156,393 Other liabilities (1,738) 325 Adjusted Diluted EPS $ 0.74 $ 0.84 $ 1.43 $ 1.46 Adjusted EBITDA $ 62.2 $ 60.6 $ 58.8 $ 53.6
Compensation and other employee benefits 45,577 41,790 Net cash provided by operating activities 15,450 4,172 Adjusted EBITDA $ 13,895 $ 14,305 $ 26,712 $ 24,963 Adjusted EBITDA Margin 4.5 % 4.4 % 4.3 % 4.2 %
Short-term debt 5,500 4,500 Investing activities Adjusted EBITDA Margin 4.2 % 4.5 % 4.1 % 3.9 %
Other accrued liabilities 37,217 22,303 Purchases of capital assets and intangibles (11,739) (764)
Total current liabilities 245,780 224,986 Acquisition of business, net of cash acquired (37,210)
Long-term debt, net 66,338 69,137 Net cash used in investing activities (11,739) (37,974)
Deferred tax liability 52,460 55,358 Financing activities
Other non-current liabilities 10,174 1,462 Repayments of long-term debt (2,000) (2,000)
Total non-current liabilities 128,972 125,957 Proceeds from revolver 98,000 55,000
Total liabilities 374,752 350,943 Repayments of revolver (98,000) (55,000)
Commitments and contingencies Proceeds from exercise of stock options 3,467 1,358
Shareholders' Equity Payments of employee withholding taxes on share-based compensation (768) (803)
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding Net cash provided by (used in) financing activities 699 (1,445)
Common stock; $0.01 par value; 100,000,000 shares authorized; 11,506,228 and 11,266,906 shares issued and outstanding as of June 28, 2019 and December 31, 2018, respectively 115 113 Exchange rate effect on cash (226) (1,248)
Additional paid in capital 76,642 71,729 Net change in cash 4,184 (36,495)
Retained earnings 167,583 152,616 Cash-beginning of year 66,145 77,453
Accumulated other comprehensive loss (4,664) (3,158) Cash-end of period $ 70,329 $ 40,958
Total shareholders' equity 239,676 221,300 Supplemental disclosure of cash flow information:
Total Liabilities and Shareholders' Equity $ 614,428 $ 572,243 Interest paid $ 2,818 $ 2,119
Income taxes paid $ 4,198 $ 7,891
Non-cash investing activities:
Purchase of capital assets on account $ 301 $ 481

SUPPLEMENTAL INFORMATION

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

In millions, except for operating margin, EBITDA margin, adjusted EBITDA margin, and per share amounts Updated 2019 Guidance Previous 2019 Guidance Updated 2019 Mid Previous 2019 Mid Footnotes: CONTACT: VECTRUS, INC. VECTRUS, INC. VECTRUS, INC. (In thousands) (In thousands, except per share data) (In thousands) (In millions) (In millions, except per share data) (In millions)
Revenue $1,370 to $1,390 $1,300 to $1,330 $1,380 $1,315 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) CONDENSED CONSOLIDATED BALANCE SHEETS  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) EBITDA (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Net Income and Adjusted Diluted Earnings Per Share (Non-GAAP Measures) Three months ended Six Months Ended Adjusted Operating Income and Adjusted Operating Margin (Non-GAAP Measures) Three months ended Six Months Ended Adjusted EBITDA Margin Guidance and 2018 Actual (Non-GAAP Measures) 2019 Guidance High 2019 Guidance Mid 2019 Guidance Low 2018 Actual Adjusted Diluted Earnings Per Share Guidance (Non-GAAP Measures) 2019 Guidance High 2019 Guidance  Mid 2019 Guidance Low Adjusted Operating Margin Guidance and 2018 Actual (Non-GAAP Measures) 2019 Guidance High 2019 Guidance Mid 2019 Guidance Low 2018 Actual Revenue by Client Three Months Ended Six Months Ended
Operating Margin 3.5 % to 3.7 % 3.8 % to 4.2 % 3.6 % 4.0 % 1 See appendix for reconciliation. Vectrus June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, June 29, June 28, 2019 % of Total June 29, 2018 % of Total June 28, 2019 % of Total June 29, 2018 % of Total
Adjusted Operating Margin1 3.8 % to 4.0 % to 3.9 % Mike Smith, CFA Three months ended Six Months Ended June 28, December 31, Six Months Ended 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 Revenue $ 1,390 $ 1,380 $ 1,370 $ 1,279 Net Income $ 35.4 $ 34.1 $ 32.7 Revenue $ 1,390 $ 1,380 $ 1,370 $ 1,279 (In thousands)
EBITDA Margin1 4.0 % to 4.2 % 4.1 % to 4.5 % 4.1 % 4.3 % 2 2019 diluted EPS guidance is calculated using estimated weighted average diluted common shares outstanding for the year ending December 31, 2019 of 11.6 million. 719-637-5773 June 28, June 29, June 28, June 29, (In thousands, except share information) 2019 2018 June 28, June 29, Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 GAAP Diluted EPS $ 3.05 $ 2.94 $ 2.82 Army $ 225,867 68 % $ 238,381 74 % $ 452,559 69 % $ 476,228 74 %
Adjusted EBITDA Margin1 4.3 % to 4.5 % to 4.4 % michael.smith@vectrus.com  (In thousands, except per share data) 2019 2018 2019 2018 Assets (Unaudited) (In thousands) 2019 2018 Net Income $ 7,617 $ 9,195 $ 14,708 $ 15,307 Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 Operating Income $ 51.4 $ 49.8 $ 48.0 $ 48.3 Operating Income $ 51.4 $ 49.8 $ 48.0 $ 48.3 Air Force 72,593 22 % 60,420 19 % 140,524 21 % 125,676 20 %
Net Income $32.7 to $35.4 $35.3 to $40.4 $34.1 $37.9 Revenue $ 331,589 $ 321,132 $ 657,517 $ 641,649 Current assets Operating activities Operating Income $ 11,193 $ 12,998 $ 21,606 $ 21,670 GAAP Diluted EPS $ 0.66 $ 0.81 $ 1.28 $ 1.35 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 % Operating Margin 3.7 % 3.6 % 3.5 % 3.8 % Add: Operating Margin 3.7 % 3.6 % 3.5 % 3.8 % Navy 16,796 5 % 9,987 3 % 31,906 5 % 18,344 3 %
Diluted EPS 2 $2.82 to $3.05 $3.07 to $3.51 $2.94 $3.29 Cost of revenue 300,553 292,064 596,149 586,114 Cash $ 70,329 $ 66,145 Net income $ 14,708 $ 15,307 Operating Margin 3.4 % 4.0 % 3.3 % 3.4 %