Mar 15, 2021
By Marjorie Censer / March 15, 2021 at 11:50 AM
The chief executive of Vectrus said this month the company is optimistic it will be able to expand its work through the Army’s Logistics Civil Augmentation program in the Indo-Pacific Command region, particularly with the Navy.
In an interview with Inside Defense, Chuck Prow said he can’t discuss specific missions in the region.
“But what I can say is the Navy has already utilized LOGCAP once. We have an ongoing task with the Navy,” Prow said. “INDOPACOM is essentially a Navy-led set of missions — not totally, but by and large –so we’re really bullish on continuing to work with the Navy on a number of areas where LOGCAP might be a vehicle of choice.”
Prow said the company has “the opportunity to pick up brand-new missions” in the region, adding that Vectrus is looking at work in the Philippines, Singapore, the South China Sea and Taiwan.
Vectrus has confirmed the transition work for LOGCAP in the region is going more slowly than hopedbecause of the ongoing global pandemic.
“INDOPACOM is the area that has continued to be slower than we would like it from a business perspective, but it’s understandable given the COVID realities,” Prow said this month, noting the company is planning for a transition toward the end of 2021 or early 2022. “We’d like to think we can make that go quicker, especially given the bullish news we’ve all been given . . . about the vaccine.”
Meanwhile, he said the company, which bought HHB Systems and Zenetex in recent months, is still actively pursuing acquisitions.
He said the latest deals have produced a “much more balanced business in terms of the breadth of clients that we now serve.”
“I think there’s room to expand in [the] State [Department], I think there’s room to expand maybe into NASA . . . and there’s plenty of room to expand in the intelligence community and in the foreign military sales activity,” Prow said.
He predicted ongoing consolidation, noting the Amentum-DynCorp International deal, for instance.
“Over time, our particular market will continue to consolidate,” Prow said. “I’d like to think we’ll play an active role in that consolidation, but it’s going to play out over time.”
Prow said he’s optimistic about the company’s future prospects, particularly as COVID-19 restrictions decline. He said the company has not lost work in its backlog; “the revenue has just moved to the right.”
Vectrus is well positioned, even if the defense budget declines, according to Prow.
“Most of our funding is [operations and maintenance] funding, which traditionally has stayed relatively stable,” he said.
Mar 6, 2021
By Wayne Heilman [email protected]
Vectrus finished last year with small increases in revenue and profits despite delays in contract work resulting from COVID-19 pandemic-related restrictions that kept some of its employees off of overseas military bases.
And the future looks much brighter for the Colorado Springs-based military contractor, which nearly doubled its contract backlog to a record $5.1 billion, including retaining its second-largest contract when it was rebid. Much of the backlog gain came from keeping a five-year contract valued at $882 million to operate, maintain and secure the Army’s communications network in southwest Asia and from the Department of Defense resolving protests from losing bidders on a $1.38 billion logistics contract Vectrus won in 2019.
As a result, Vectrus told stockholders it expects both revenue and earnings to grow more than 20% this year to revenue of between $1.65 billion and $1.72 billion and profits of between $3.48 and $4.08 a share. Some of the boost will come from two acquisitions the company completed late last year that will bring in $200 million in revenue.
Vectrus bought HHB Systems, a Virginia-based defense contractor specializing in systems engineering and technical assistance, and Zenetex, another Virginia defense contractor that specializes in providing management and technology services for federal and defense industry clients. Both companies focus on intelligence agency work, and Zenetex also generates substantial revenue from foreign military work.
“We ended 2020 on a high note, achieving several important milestones ,” Vectrus CEO Chuck Prow said in a news release. “Our 2020 results reflect the operating and financial resiliency of our business model, the dedication of our team to our clients’ missions, and the advancements we’re making” in combining both logistics and information technology work for its military customers.
Vectrus reported that revenue rose less than 1% to nearly $1.4 billion in 2020, but profits grew 11.4% to nearly $37 million, or $3.14 a share, despite $63 million in revenue delayed by base access issues . During the fourth quarter, the company’s revenue fell 2.7% to $355.3 million as a result of $25.9 million in COVID-related revenue delays, but tax breaks from COVID relief legislation helped profits surge 57.7% to $16.8 million, or $1.42 a share.
Release date
Tuesday, March 2, 2021
Mar 3, 2021
By Ross Wilkers
Vectrus’ push to be a leading provider of tech-enabled and converged infrastructure provider to the government includes 5G and the company sees that technology trend increasingly being embedded into client expectations.
During last year’s fourth quarter, Vectrus was awarded a three-year prime contract to help the Navy develop a 5G-enabled “smart warehouse” at its Naval Base Coronado in California and is part of the team chosen to implement a 5G testbed at a Marine Corps logistics warehouse in Georgia.
On Vectrus’ fourth quarter earnings call with investors Tuesday, CEO Chuck Prow said that pair of projects can be broken out into two tracks when it comes to 5G and the smarter infrastructure resulting out of it.
Track one is in the base operations and supply chain line of work that Prow said is moving more in the direction of converged infrastructure with IT tools at the center. Those projects are examples of some federal customers increasingly thinking that way, he said.
“Our clients are going to expect us to operate facilities and supply chains in a much more instrumented and predictive way,” Prow told analysts. “We think that we will continue to insert this technology into our current projects and then into new proposals at an expedited rate over the next couple of three years.”
Track number two Prow brought up is how agencies will shape their contract into “much more pointed and/or tactical procurements focused on different types of facilities and supply chains” that Vectrus sees itself better-positioned for.
“New channels will begin to emerge and we see that now in our pipeline, as well as the way we actually operate and propose our traditional markets, they are going to continue to change,” Prow said. “There’s no going back because 5G enables more efficient, more effective operations.”
Vectrus’ most recent three acquisitions also “really further our access to these new channels,” Prow added.
The deal for Advantor in 2019 brought to Vectrus a suite of electronic security products designed to help users gain real-time monitoring and control functions for physical facilities. After that, Vectrus acquired Zenetex and HHB Systems in quick succession late last year to bolster offerings in IT-enabled asset management.
In the meantime, Vectrus like every other company in the government market continues to navigate a world where the coronavirus pandemic is affecting its business. Host country and base access restrictions resulted in a $63 million hit to revenue last year, including $26 million in the fourth quarter alone.
Revenue for all of 2020 climbed 1 percent year-over-year to $1.4 billion, while fourth quarter sales were down 2.7 percent from the same period in 2019 to $355.3 million. The COVID-19 headwinds amounted to a 4.6-percent impact on the top line.
Vectrus sees this year’s sales in the range of $1.645 billion-to-$1.715 billion that would indicate growth of between 18 and 23 percent. The company also sees improvement on the bottom line from last year’s 4 percent to a range of 4.6-to-5 percent adjusted EBITDA margin (earnings before interest, taxes, depreciation and amortization).
The process to distribute and give vaccines will play a significant role in how those COVID-related headwinds and restrictions lift, Prow said. Particularly in the regions where Vectrus is the main contractor for the Army’s LOGCAP V global logistics program.
“We have intentionally put what we think to be conservative guidance with regard to revenue because the reality with regard to COVID, and the headwinds associated with COVID particularly in (the Indo-Pacific Command region) are still a bit uncertain,” Prow said. “And you saw today (Tuesday), the president just announced some good news on vaccines.”
Feb 17, 2021
By William McCormick
Executive Mosaic is honored to present Chuck Prow, president and CEO of Vectrus, as a 2021 Wash100 Award recipient for his notable leadership that enabled the company to win massive contract awards in support of U.S. service branches, as well as drive growth efforts during the COVID-19 pandemic.
This marks Prow’s seventh Wash100 Award. He received his 2020 Wash100 Award for leading Vectrus’ growth through big contract awards, acquisition and continued excellence in the government contracting (GovCon) sector.
“Chuck Prow, who led IBM’s public sector through one of its most successful periods, is now guiding Vectrus, a public company, through a simultaneous effort that includes growing top of the line organic and acquisition expansion as well as aggressively increasing technology and margin of his company‘s products,” said Jim Garrettson, founder and CEO of Executive Mosaic and the coveted Wash100 Award.
Under his leadership, Vectrus has continued its success in the federal market throughout the year, which has expanded the company’s portfolio and grown its business. Most notably, Vectrus won a spot on the five-year, $6.4 billion indefinite-delivery/indefinite-quantity (IDIQ) Air Force Contract Augmentation Program (AFCAP V) contract vehicle in April 2020.
Under the contract, worldwide contingency and humanitarian support contract Vectrus will provide contingency planning, deploying and training and equipping of forces. Vectrus was first awarded a position on the AFCAP contract in June 2015. Since the initial award, the company has been awarded 13 task orders, worldwide, worth over $130 million.
“We have placed significant emphasis on expanding our Air Force relationships and mission support and today, Vectrus is a trusted provider of facilities and logistics, information technology, network communications, operational technologies and converged solutions to the Air Force in 13 countries,” said Prow.
In addition to the company’s support of the U.S. Air Force, Vectrus has won work to deliver advanced capabilities to the U.S. Army. The company announced in July that it will continue to help U.S. Army personnel manage and secure operations at the service branch’s installation in Kuwait under a $529 million contract modification.
The branch obligated $248 million at the time of award from its fiscal 2020 operations and maintenance funds. Vectrus will extend support work at Camp Arifjan through Sept. 28, 2021. The company performs logistics, information technology, network communication and facility management services at U.S. military installations in Kuwait through the Army’s K-BOSSS program.
Throughout the year, Vectrus has worked to secure competitive opportunities abroad, proven by its recent Army contract modification in Kuwait. Vectrus has also secured valuable worldwide contract awards with the U.S. Navy.
Prow recently announced that Vectrus will continue to help the U.S. Navy manage facilities, equipment and vehicles at Naval Station Guantanamo Bay in Cuba under a potential $196 million base operations support contract.
The new contract, which was announced in October, was won through a recompete. It will extend the work Vectrus has performed at the military installation over the past two years, including facility investment, utilities management and ground maintenance.
Prow said that Vectrus has increased its geographical footprint across the Navy market and looks to further expand work with the branch.
Executive Mosaic congratulates Vectrus and Chuck Prow for his 2021 Wash100 Award. Prow’s role in the GovCon industry is one of the many reasons for the company’s success. His commitment to company growth and workforce support has established Vectrus as a top company in the sector.
“My guess is Chuck will rapidly scale this enterprise and leverage the infrastructure investment he has already made to upgrade Vectrus to the echelon of the GovCon industry,” Garrettson emphasized.
About Wash100
This year represents the eighth annual Wash100 award selection. The Wash100 is the premier group of private and public sector leaders selected by Executive Mosaic’s organizational and editorial leadership as the most influential leaders in the GovCon sector.
These leaders demonstrate skills in leadership, innovation, reliability, achievement, and vision. Visitors to Wash100.com can sign in and vote for the executives they believe will have the greatest impact on government contracting in the coming year.
The media team at Executive Mosaic writes individualized articles for each recipient of the Wash100 award, providing a write up on the executive centered around their career history and highlights.
Release date
Wednesday, February 17, 2021
Feb 16, 2021
Vectrus Systems has secured a prime contract for the US Department of Defense (DoD) Naval Base Coronado (NBC) 5G Smart Warehouse.
Under the contract, Vectrus will be responsible for delivering support services, such as inventory management, network security, robotic material movement, as well as environmental sensing capabilities.
The support being offered at NBS is part of the DoD’s $600m project for 5G testing at five US military test bases.
Naval Base Coronado military installation serves as home to over 27,000 military and civilian personnel.
Vectrus Operational Technology and Enterprise Package senior vice-president Corinne Minton said: “We are excited to support the navy’s ground-breaking smart warehouse prototype in a competitive arena focused on technological solutions that are now being applied within traditional facility and base operations and IT services.
“This is an opportunity to lend our technological expertise in support of the clients’ migration towards the converged infrastructure market and move away from traditional ways of operating their facilities, supply chains, and networks.”
The company noted that each installation will partner with military services and academic experts to further the 5G capabilities of the DoD.
NBC 5G Smart Warehouse project is aimed at developing a 5G-enabled Smart Warehouse ‘focused on transhipment between shore facilities and naval units’.
Release date
Tuesday, February 16, 2021
