V2X, Inc.

Thank you for joining us for the V2X First Quarter 2023 Earnings Conference Call and Webcast. Today's call is being recorded. My name is Joanna, and I will be the operator for today's call. At this time, all participants have been placed in a listen-only mode. Following the management presentation, I will open up the call for a Q&A session. Should you have any questions at that time, please press star, followed by the one on your touchtone phone. If you are using a speakerphone, please lift the handset before pressing any keys. And now I'll pass the call over to your host, Mike Smith, Vice President of Treasury Investor Relations and Corporate Development at V2X. Please go ahead.

Thank you. Good afternoon, everyone. Welcome to the V2X First Quarter 2023 Earnings Conference Call. Joining us today are Chuck Probe, President and Chief Executive Officer, and Susan Lynch, Senior Vice President and Chief Financial Officer. Slides for today's presentation are available on the investor relations section of our website, www.gov2x.com. Please turn to slide three. 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 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 would like to point out that in addition to GAAP earnings, we will be discussing and reporting various adjusted non-GAAP metrics, including pro forma revenue, adjusted EBITDA on margin, adjusted operating cash flow, adjusted net income, and adjusted diluted earnings per share. The definition of these non-GAAP measures can be found in our presentation materials available on our investor relations website and in our press release filed with the SEC. At this time, I'd like to turn the call over to Chuck Pro, President and CEO of V2X.

Thank you, Mike, and good afternoon, everyone. Thank you for joining us on the call today. Please turn to slide four. This afternoon, Susan and I will update you on a strong quarter for V2X. Our 12% organic revenue growth, significant new business win, and the retention of key recompete contracts demonstrate V2X's continued momentum in the marketplace. This momentum validates our strategy and differentiation, but more importantly, it's a result of our talented employees, the foundation on which V2X is built. As you can see on the slide, V2X has an extremely diverse workforce, for example, More than 42% of our US employees report a military background, and 45% identify as a person of color. The metrics on this page are something we are extremely proud of, and our diversity allows us to achieve even greater performance. I'd like to thank our over 15,000 global employees that are helping drive positive results across our business, improve outcomes for our clients, and are important contributors in the communities that we are privileged to operate in. Please turn to slide five. Our strong 12% year-over-year revenue growth is a great start to the year and was generated by continued expansion on existing programs, contribution from new award, and success securing recompete wins. Adjusted EBITDA for the quarter was $68 million, or 7.2% margin, and adjusted diluted earnings per share was 80 cents. We continue to experience significant growth in end-of-pay count, with our presence and footprint in the region proving to be a key channel to support increasing mission requirements. Revenue in the region grew 300% year-over-year and 18% sequentially to $64 million driven by the expansion of existing programs and exercises, such as Talisman Saber, the largest bilateral combined training activity with the Australian Defense Force and the United States. We are also supporting Balochistan 2023, a critical exercise with the U.S. and Philippines that enhances tactics, techniques, and procedures across a wide range of military operations. This year marks the 38th iteration of the training event and is the largest to date. During the quarter, the pace of award activity improved, which led to approximately $600 million of new business awards. The recent award activity is encouraging, and we believe V2S is well positioned to win its share of the over $4 billion of new business opportunities currently under evaluation. We continue to protect our foundation and won over $250 million of re-competes in the quarter. For example, we secured a five-year, $142 million contract with Naval Air Systems Command for NAVAIR PMA-281. PMA-281 is responsible for the acquisition and lifecycle management of various mission planning control systems and execution tools that are developed and integrated in partnership with other services and foreign allies. Furthermore, subsequent to the quarter close, we were awarded an eight-year fixed-price re-compete contract valued at $300 million to continue providing support services to the Navy in Cuba. This was an excellent outcome for V2X and a testament to the strong relationships our teams have built with their clients. The new version of this contract is significantly longer than the predecessor contract and provides a great opportunity to drive enhanced value to our clients through the delivery of our converged solutions over the next eight years. These two successful re-compete wins are demonstrative of the continued success we are having with our Navy clients. We remain focused on expanding our work with the Navy as part of our targeted growth campaign and are looking forward to broadening our presence with this important client. Given our first quarter results, we are reiterating our 2023 guidance. Please turn to slide six. V2X remains focused on inserting technology that's used as the digital and physical aspects of our client's mission. This differentiation and focus is driving growth through new business wins and expansion on existing programs. For example, during the quarter, we were awarded the Naval Test Wing Pacific contract valued at $440 million over seven years. This effort to support the critical test and evaluation activities for the Navy leveraged V2X's innovative technology-based aircraft maintenance and management optimization, or AMO, solution. The proprietary AMO solution was also instrumental in V2X's $880 million naval test wing Atlantic win last year. AMO is a V2X differentiator, and it is designed to provide clients with significantly enhanced operational readiness, and real-time visibility into flight operations, maintenance, readiness, and supply chain by leveraging technology and data analytics. The investments made in AMO are yielding results with the technology being foundation to several important new business and re-compete wins. For example, over the past 28 months, AMO has helped to drive over $5 billion in wins for V2X. These wins illustrate how we are generating growth by creating more value in our core markets with converged solutions and increasing market share where our operational knowledge sets us apart. Please turn to slide seven. Our advanced technology capabilities continue to gain traction and are an important component of growth for V2X. We are seeing momentum built into cybersecurity, mission IT, and critical communications domains. B2X has an over 40-year track record providing these solutions and now has annual revenue of approximately $350 million with almost 1800 highly skilled personnel across 17 countries. This momentum was demonstrated in the first quarter through a new three-year contract win valued at approximately $100 million to provide critical cybersecurity support across the U.S. for a government client. The contract is currently under protest But once phased in, we'll add to V2X's existing cyber work, which includes operating the largest cyber center for the U.S. Army outside of the United States, defending all Army network throughout CENTCOM area of operation. It also adds to the full range of enterprise IT and cyber defense support services that V2X provides to the U.S. Army Europe, U.S. Air Forces Europe, the U.S. European Command, and U.S. African Command areas of responsibility. as well as to the U.S. Navy worldwide. As you can see on the slide, B2X has strong cybersecurity capabilities, and we are advancing and investing in our operational technology offerings, which increase the pace that converged solutions transform operational missions. Please turn to slide eight. I would like to take a moment to recognize our NASA team for their remarkable achievements, which include recently being awarded the NASA Supernova Award for Excellence in Safety and also the Director's Award for their support to the Artemis program. The V2X team has been supporting NASA's neutral buoyancy laboratory since 2003. The lab is a 6.2 million gallon instrumented pool at the NASA Johnson Space Center where astronauts learn to work in space and train for missions. The V2X team provides all resources necessary to operate and maintain the lab, including sustaining engineering and the fabrication of spacecraft mockups. We also support engineering evaluations and tests related to new extravehicular activity and facilitate astronaut and flight controller training operations. Today, V2X is transforming the facility to support NASA as it prepares to send astronauts back to the moon for its Artemis program. I'd like to thank our team for their dedication to this important mission and their recent achievements. Looking ahead, we are excited to build on the great performance of our team to further expand our relationship with NASA. We believe the combined capabilities of V2X can deliver a broad set of solutions to NASA, which can be an important catalyst for future growth. Please turn to slide nine. As mentioned, V2X is seeing continued expansion in the Pacific due to growth on existing programs such as Quadulin and volume associated with exercises in the region. Quadulin is currently at full run rate and could show incremental growth as the DoD invests as a part of its Water Pacific Deterrent Initiative. In March, the DoD released its fiscal 2024 budget and outlined the investments it is planning to make as a part of the Pacific Deterrent Initiative. As part of the initiative, the DoD has identified investments of $35 billion over the next five years to modernize and strengthen its presence in the Pacific, improve logistics, maintenance, pre-positioning of stock, conduct exercises and training, upgrade infrastructure, and build defense capabilities. V2S's footprint across the Philippines, Guam, Thailand, South Korea, Japan, and Hawaii continue to provide key channels to support our clients' initiatives. For example, we believe our position in and around the Philippines bodes well to support the recent established bilateral defense guidelines and updated alliance framework between the U.S. and Philippines. This alliance commits the U.S. to helping the Philippines modernize its military by collaborating on a security sector assistance roadmap to identify priority defense platforms and force packages that will bolster combined deterrence. B2X is bringing the full suite of its complementary capabilities to meet our clients' mission requirements and priorities in Indopaycom. We continue to believe Indopaycom presents a notable opportunity for future growth over the next several years and stand ready to support our clients. Now, I'd like to turn the call over to our Chief Financial Officer, Susan Lynch, to discuss the first quarter results.