VEC - Vectrus (VEC) - Overall Strong 3Q21 Results

3Q21 Results. Vectrus' 3Q21 revenue was $459.4 million, up 30.4% y-o-y, with organic growth of 13%. Adjusted EBITDA was $20.5 million, up from $17.0 million last year. EPS was $0.87 compared to $0.88, while adjusted EPS was $1.15 in 3Q21 versus $0.89 last year. We had forecast revenue of $434 million, adjusted EBITDA of $19.1 million, and EPS of $0.79.INDOPACOM. Vectrus is beginning to see the positive impact of the INDOPACOM AOR. The Company recently received an 8-year contract in the Philippines and recently completed the pre-transition site survey for the Kwajalein task order. Revenue from Asia jumped 686.3% to $21.9 million in the quarter, with INDOPACOM accounting for approximately 5% of overall revenue, up from 1% in the same period last year.Backlog, Pipeline Remain Healthy. The pipeline was nearly $11 billion at the end of the quarter, down modestly from the $11.4 billion at the end of the second quarter, including $2.1 billion of projects on which bids have been submitted. Vectrus' backlog totaled $4.9 billion at the end of the quarter, or $5.1 billion on a pro forma basis. Pro forma TTM book-to-bill remained an impressive 1.4x.Projections. With the second and third quarters boosted by some on-off programs, management maintained its full year guidance. We are projecting revenue for the fourth quarter of $415 million, down from our prior $442 million. EPS is projected at $0.86, with adjusted EBITDA of $20.1 million for the quarter. For the full year, we are projecting revenue of $1,779 million, EPS of $4.09, and adjusted EBITDA of $87.7 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 >>