By Wayne Heilman [email protected]
Vectrus Inc. reported record revenue in both the fourth quarter and all of 2019 and told stockholders to expect even better results this year as it is about to begin work on its biggest contract ever.
The Colorado Springs-based defense contractor said Tuesday it expects to begin generating revenue this year from $1.38 billion in contracts awarded in April to provide logistics and other services to regional military commands. The awards have been protested by losing bidders, but the Army last month reaffirmed the contract awards and the Court of Federal Claims has rejected three of the four protests; it’s expected to rule on the last protest by early April.
Vectrus CEO Chuck Prow told stock analysts on a conference call that the Army has told Vectrus to begin operations to transition work from the previous contract holders. He also said Vectrus could win additional work under the overall logistics contract; the Army has awarded just $3.5 billion of the $82 billion it expects to hand out to the four winning bidders during the next 10 years.
Vectrus generated a record $365.3 million in revenue in the fourth quarter, up 10.8% from the same period a year earlier, while earnings rose 5% to $10.6 million, or 91 cents a share. Revenue for all of 2019 increased 8.1% from 2018 to $1.38 billion. But profits fell 1.6% to $34.7 million, or $3.03 a share, mostly as a result of costs from an acquisition and startup costs for the logistics contract.
“2019 was a year of continued strategic and financial momentum. Revenue growth and margin expansion remained strong through the fourth quarter as we phased in new business and increased our share with existing and new clients,” Prow said. “We expect 2020 to be another strong year for Vectrus,” he added, pointing to $2.5 billion in pending bids submitted for government contracts yet to be awarded.
Vectrus told stockholders it expects revenue this year between $1.48 billion and $1.53 billion and earnings between $3.48 and $3.61 a share. That would be revenue growth of 7% to 10% and earnings growth of 8% to 19%.