By Wayne Heilman
Vectrus announced a third quarter revenue surge Tuesday as the Colorado Springs-based defense contractor scored new contracts and garnered work orders on existing contracts.
The company’s sales for the July-to-September period jumped 16.8% from a year earlier as it added $180 million in new work, including additional contracts with the Air Force and Navy. Vectrus said much of its revenue growth came from work in the Middle East and Europe and from its July acquisition of electronic security contractor Advantor for $44 million.
“As expected, revenue growth is accelerating in the second half of the year, with our continued phase-in of new contracts diversifying our revenue base, increasing our market share with the Navy and Air Force and driving organic (new work) growth of 13% year-over-year,” Vectrus CEO Chuck Prow said Tuesday in a news release.
Despite the revenue gains, profits for the quarter fell 4.9% to $9.38 million, or 80 cents a share, as a result of costs related to the Advantor acquisition and legal costs from a challenge to the company’s biggest contract win in its six-year history. Vectrus also said it faced a higher-than-expected federal tax rate.
Dyncorp International, a losing bidder in an $82 billion contract to provide logistics and other services to regional military commands, is protesting awards to Vectrus and three other companies with the Court of Federal Claims. Vectrus said in a conference call with stock analysts that it expects a decision on the protest by Dec. 4.
Earnings for the first three quarters of the year were off 4.3% from the same period last year to $24.1 million, or $2.08 a share, while revenue rose 7.1% to $1.02 billion. Vectrus didn’t change its revenue or earnings forecast for the year for revenue of $1.37 billion to $1.39 billion and profits of $2.82 to $3.05 a share.
The company said it has a contract backlog of $3 billion, has submitted another $2.2 billion in bids this year and is planning to submit another $7.1 billion in bids.
Vectrus shares have surged 56.1% to a record $46.42 since winning $1.38 billion in work in the Middle East and Asia under a contract from the Army’s Logistics Civil Augmentation Program.