V2X, Inc.

Thank you for joining us for the Vectra's first quarter 2022 earnings conference call and webcast. Today's call is being recorded. My name is Gary, and I'll be the operator for today's call. At this time, all participants have been placed in a listen-only mode. Following management's presentation, I will open up the call for a Q&A session. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star, then two. And now, I'll pass the call over to your host, Mike Smith, Vice President of Treasury, Investor Relations, and Corporate Development at Vectris.

Thank you. Good afternoon, everyone. Welcome to the Vectris first quarter 2022 earnings conference call. Joining us today are Chuck Perot, President and Chief Executive Officer, and Susan Lynch, Senior Vice President and Chief Financial Officer. Slides for today's presentation are available on our investor relations website, investors.fectress.com. Please turn to slide two. During today's presentation, management will be making forward-looking statements pursuant to the safe harbor provisions of the federal securities laws. Please review our safe harbor statements in our press release and presentation materials for a description of some of the factors that may cause actual results to differ materially from the results contemplated by these forward-looking statements. The company assumes no obligation to update its forward-looking statements. Additionally, I'd like to point out that in addition to GAAP earnings, we will be discussing and reporting adjusted non-GAAP metrics, including adjusted operating income and margin, adjusted EBITDA and margin, adjusted net income, and adjusted diluted earnings per share. The definition of these non-GAAP measures can be found in our presentation materials, press release, and Form 10-Q. At this time, I'd like to turn the call over to Chuck Pro.

Thank you, Mike. Good afternoon, everyone. Thank you for joining us on the call today. Before we get started, I would like to thank all of our employees and their continued commitment to our clients. Our team's demonstrated agility and outstanding performance, supporting several of the DoD's most critical and high-profile missions during the quarter. Please turn to slide four. We started 2022 on a strong note with revenue growth across several areas of our business. During the quarter, revenue grew 5% year-over-year and 9% sequentially to $456 million. Revenue growth was driven by the continued phase-in of Log Cap 5, continued high op tempo in the regions we operate in support of ongoing world affairs, as well as the progress made in executing growth in our core programs. Adjusted EBITDA for the quarter with $18.2 million or 4% margin as we work through program efficiencies in the early phases of Log Cap 5 implementation. Additionally, Log Cap 5 is generating higher revenue volume with a greater amount of material and pass-through content that has a different margin complexion. I would like to point out that approximately two-thirds of our revenue is coming from contracts in the first 18 months of their life cycle. which provides substantial revenue visibility. As is standard in our business, operating margins tend to be lower at the beginning of the contract and generally improve over time as we execute our well-established process improvement and enterprise vectors initiatives. EPS for the quarter was $0.24 and adjusted diluted EPS was $1.01. Importantly, during the quarter, we continued to expand our geographic footprint through additional growth in Indopaycom, which now makes up 4% of revenue. We expect continued growth in the region and note that the DoD recently released fiscal year 2023 budget calls for another major exercise in the region, which we believe could be similar in size to the task we performed in 2021. We also continue to expand and solidify our portfolio of work within the Army, the Navy, and the intelligence community through new wins and securing re-competes. Given our year-to-date results, we are reiterating our 2022 guidance and the non-GAAP guidance ranges. We believe our momentum will likely drive full year revenue to be at the high end of our range with margins at the low to mid given the aforementioned ramp and new programs and greater pass-through volumes. With that said, there is increasing opportunity to provide greater support to contingency events which traditionally carry higher margins. Given our visibility momentum, adjusted EPS is expected to be above the low end of the guidance. Finally, on March 7th, we announced our agreement to combine with Vertex an all-stock merger, which I will cover later in the call. Please turn to slide five. In the first quarter, we continued to focus on the needs of our clients and supported several important missions and requirements. During the first quarter, Vectors was selected to complete the final phases of the application development for 5G Naval Base Core Nautilus Smart Warehouse, which is demonstrative of our ability to provide converged solutions and operational technologies to clients. Importantly, on April 29th, Vectris leadership and DOD clients attended a ribbon-cutting ceremony and demonstration of the warehouse. The demonstrations focused on 5G radio access network and its optimization of warehouse operations via increased throughput of data, Internet of Things, and low latency. This is a major milestone for Vectris, and our client has Coronado as one of the first sites to test this technology for the U.S. military, which will help map 5G strategy, development, and deployment across the DoD. In addition, we demonstrated our ability to transition quickly and recently became fully operational on LOGCAP-5 Quadulin, approximately a month and a half ahead of schedule. This was a significant accomplishment given the extreme travel and logistical challenges we faced as a result of the pandemic. The phase-in of Quadulin involved over 1,500 employees and partners of Vectris that are now providing full spectrum of services, including operating schools, commissaries, retail stores, and community centers. We are also providing healthcare, environmental management, facility support, transportation, and IT services across the island. Several of the functions being provided are additive to our core O&M offerings, and will provide path performance to pursue adjacent and expanded opportunities with clients in the future. We also leverage our process-oriented phase-in system and, in a short period of time, became fully operational at the Logistics Readiness Center at Fort Benning, following our December 2021 $250 million award. We are proud of this achievement and look forward to providing world-class maintenance, transportation, and supply services for the U.S. Army's Maneuver Training Center over the next five years. During the first quarter, our team demonstrated Vectris' rapid response and global capabilities by assisting the DoD with the establishment of a water supply system and water remediation in Hawaii. This effort was accomplished by using granular carbon activation units that were utilized to flush over 100 water distribution points. I again want to thank our teams who have worked tirelessly on this critical contingency operation. Additionally, late in the first quarter, VECRIS was awarded a strategically important task order to provide support for the U.S. Air Force in Europe as part of the European Deterrence Initiative. While currently small in value, this contingency effort is providing vital and mission-critical services to our Air Force client in Europe and positioned us well for additional support. This effort exemplifies our global positioning and rapid response capabilities supporting our clients' most challenging and critical missions. Please turn to slide six where I will discuss some notable contract wins. Our growth-related activities continue to experience positive momentum. Several recent wins have helped lay the groundwork for continued revenue growth and demonstrate success in our campaign to diversify our portfolio. We are continuing our positive traction working with the Navy and were recently awarded a follow-on contract for spectrum management valued at $60 million over five years. The award continues our work that helps the Navy in solving a float, electromagnetic interference, and compatibility challenges for the fleet while maintaining spectrum dominance. Becker's ensures that all components, platforms, systems, and equipment on a ship or an aircraft can operate without interference. Our support for this program dates back to 1987 and development of the original spectrum management tool. We also want an effort as a subcontractor to continue performing electromagnetic test and evaluation engineering that supports the mitigation of electromagnetic interference on airframes and aircraft instrumentation. Finally, We were awarded a position on a $250 million five-year IDIQ vehicle that provides rapid deployment, prototyping, and systems integration to the Navy, joint and coalition forces worldwide, utilizing numerous platforms and integrated capabilities. Vectris will focus on embarkable systems that include cyber hardening, new technology insertion, and retrofit of existing systems. These key wins demonstrate our capabilities in engineering and operational technologies and our commitment to delivering a more integrated and comprehensive suite of solutions in support of the converged environment. Vectris has worked diligently over the past several years to expand its presence in the intelligence community. And during the first quarter, our team were successful in securing several wins that enhance our footprint. These awards continue our support of IT and integrated security services that protect physical assets, IP, and computer systems for the intelligence community. Our first quarter results are demonstrative of Vectris' realization and execution to strengthen and grow the business through outstanding program execution, capability expansion, and diversification of our geographic and client footprint. Now, I'd like to turn the call over to our Chief Financial Officer, Susan Lynch, for a review of the financials.