V2X, Inc.

Thank you for joining us for the V2X second quarter 2022 earnings conference call and webcast. Today's call is being recorded. 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. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star and zero. And now I'll pass the call over to your host, Mike Smith. Vice President of Treasury, Investor Relations, and Corporate Development at V2X.

Thank you. Good afternoon, everyone. Welcome to the V2X Second Quarter 2022 Earnings Conference Call. Joining us today are Chuck Pro, 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.vectrus.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 law. 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. I'd like to point out that in addition to GAAP earnings, we will be discussing and reporting various adjusted non-GAAP metrics, including adjusted operating income and margin, adjusted EBITDA and margin, adjusted net income, and adjusted diluted earnings per share. 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 Brough.

Thank you, Mike, and good afternoon, everyone. Thank you for joining us on the call today. Please turn to slide four. Before we begin, I'd like to point out that on July 5th, Vectris completed the combination with the Vertex Company and introduced the combined company as V2X. I'd like to thank the employees of Vectris and Vertex for all of their hard work in bringing this combination to fruition while continuing to deliver solid results. with high-quality, uninterrupted service and support to our clients. The agenda on this slide outlines the topics we plan to discuss today. First, we will introduce V2X, talk about the momentum of the combined company, the leading indicator of our business, future opportunities, and second half financial guidance. From there, we will touch on the Vectris second quarter highlights and financial results. At the conclusion, we will provide an update on the integration of the merchant. Please turn to slide five. On July 5th, we formally started our journey as V2X. With 14,000 employees, $3.6 billion in pro forma revenue, and $290 million in pro forma adjusted EBITDA. V2X is a leader in the operational segment of the federal services market. providing converged solutions throughout the mission lifecycle of our clients, most critical and enduring global missions. The company also has a strong financial profile with significant free cash flow and long-term revenue visibility through a $12 billion backlog. V2X will have no re-compete that is more than 2% of revenue over the next two and one-half years. As you can see on the slide, V2X has markedly improved its geographic client and contract diversity, including over 300 contracts with no task order over 11% of revenue. V2X's geographic footprint spans across 330 locations globally, presenting opportunities to further deliver comprehensive solutions across Indopaycom, CENTCOM, UCOM, and NORTHCOM areas of operation. Additionally, V2X has access to a larger client base and funding streams including national security, defense, civilian, and international clients. This includes long-standing relationship with the Army, the Air Force, Navy, NASA, the Drug Enforcement Agency, and foreign military clients, including the UK Royal Navy. This diversification also helps provide top-line resiliency to various economic and political cycles. Furthermore, With a stronger percentage of fixed price contracts, we believe there is opportunity for V2X to expand margins over time and process and technology insertion generate efficiencies. On slide six, you can see the truly unique and comprehensive set of capability V2X has across the aerospace, operations and logistics, training, and technology markets. As clients move toward a converged environment, the company is well positioned to meet the mission essential requirements of its clients while delivering cost savings, increased security, and resiliency. I'd also like to point out that from a macro budgetary perspective, B2X's solutions and capability are aligned with key spending priorities for the DoD and international clients such as mission essential operations, platform modernization and sustainment, technology upgrade, and lifecycle support, security, readiness, and training. The breadth of V2X's capabilities are significant and provide a meaningful opportunity for future revenue synergies. By leveraging our capabilities, V2X is well positioned to increase its addressable market through new clients and cross-selling opportunities. Please turn to slide seven. The leading indicators for V2X are supported by several recent wins, strong backlog and positioning. This slide illustrates diverse capabilities and wins from both Vectris and Vertex in 2022. For example, Vertex recently won two new key opportunities, the Naval Test Wing Atlantic, a seven-year program valued at $850 million, and the Air Force Global Strike Command five-year contract valued at $130 million. Both awards are ramping and expected to be fully operational in the third quarter. Importantly, this slide does not capture several large and important wins that ERTEC received in the latter part of 2021. Please turn to slide eight. B2X has been successful winning several significant contracts that are in the early stage of their life cycle with minimal periods of performance remaining. These wins are partially reflected in the trailing 12-month awards of approximately $6 billion. Importantly, our teams have been able to increase work scope on existing programs, which results in additional orders and backlog. For example, in the second quarter, on a standalone basis, Tetris existing programs have generated over $500 million in add-on orders, which is significant given the pace of awards in our industry at large. These additional orders demonstrate our team's continued solid performance and increased out-tempo in several geographic regions. Furthermore, we expect that given our current run rate in Indopaycom, we could see an additional award in excess of $300 million associated with the Quadulin task order. Expansion on current contracts has historically been a key growth driver for the legacy Vectors business. With a much larger contract base, we now have the opportunity to further expand our existing contracts by providing innovation and technology to complex challenges throughout the mission lifecycle. A strong velocity of awards has resulted in a significant backlog of approximately $12 billion that provides solid visibility over the next several years. The visibility and long-term contracts of the combined company is an important attribute and differentiator. As I previously mentioned, the company does not have any re-compete contract that is more than 2% of revenue for at least the next two and one-half years. With a significant portion of our re-competes behind us and a solid amount of revenue under contract over the next several years, we believe V2X is well positioned to aggressively focus on addressing new opportunities and contract expansion to further grow the business. In terms of new business, the current pipeline of opportunity for V2X is approximately $14 billion. This includes opportunities that are submitted and expected to be submitted in the next 12 months. In summary, proposal activity continues to be robust and we expect continued new business awards in the second half of the year. While our current pipeline of opportunities is solid, We believe there is substantial opportunity to generate revenue synergies that leverage our combined capabilities. For example, slide nine demonstrates how the applicable solutions powered by V2X can increase the rate and pace at which we can jointly deliver an integrated portfolio of technologies and solutions to better provide full lifecycle support in critical and enduring missions. We plan to further describe and quantify these incremental growth accelerators during our third quarter call. Now, I would like to turn the call over to our Chief Financial Officer, Susan Lynch, to discuss the V2X second half guidance.