VEC - Vectrus (VEC) - Outstanding Second Quarter Results

2Q21 Results. Vectrus' 2Q21 revenue was a record $470.8 million, up 40.1% y-o-y, with organic growth of 21%. Adjusted EBITDA was $26.6 million, up from $6.7 million last year. Adjusted EBITDA margin increased 360 basis points to 5.6%. EPS was $1.35 compared to $0.09, while adjusted EPS was $1.52 in 2Q21 versus $0.31 last year. We had forecast revenue of $410 million, adjusted EBITDA of $20.3 million, and EPS of $0.95.Overall Operating Environment Remains Healthy. With full operational capability in CENTCOM and growing capability in INDOPACOM, momentum continues to build. While some areas remain more restrictive than others, re-openings of bases following the pandemic is a positive for Vectrus. The Company continues to win awards, as evidenced by the recent $40 million Air Force awards.Backlog, Pipeline Remain Healthy. The pipeline exceed $11.4 billion at the end of the quarter, including $1.7 billion of projects on which bids have been submitted. Vectrus' backlog totaled $4.9 billion at the end of the quarter, or $5.3 billion on a pro forma basis. Projections. Where can the Company go from here? As one would expect, following the strong second quarter, management raised full year guidance. Given where we were, we are mostly just tweaking our projections for the second half. We are projecting revenue of $434 million, EPS of $0.79 and adjusted EBITDA of $20.7 million for the third quarter. For the full year, we are projecting revenue of $1,780.8 million, EPS of $4.06, and adjusted EBITDA of $90.5 million.Maintaining Outperform. We are maintaining our Outperform rating and $62 twelve month price target. The strong first half results set the table for an excellent 2021, in our view. With the recent acquisitions, Vectrus now plays in a larger pool and market trends support growth in the converged infrastructure market. Read More >>