V2X, Inc. (VVX) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Vectrus, Inc. 2020 Annual Meeting of Shareholders. I would like to introduce you to Lou Giuliano, Executive Chairman of the Board of Directors of Vectrus.

Good morning, ladies and gentlemen. It is now approximately 8:00 a.m. Eastern Time and time to call the meeting to order. I'm Lou Giuliano, Non-executive Chairman of the Board of Directors of Vectrus. As Chairman of this meeting, I'm delighted to welcome you to the 2020 Annual Meeting of the Shareholders of Vectrus. Due to the public health impact of the COVID-19 pandemic and to support the health and well-being of our employees and shareholders, we've replaced our normal in-person meeting this year with a virtual meeting. Before we begin, I'd like to comment on the seismic shift that has taken place at Vectrus during the last year. Vectrus has made great strides in executing their strategy to transform the company into a higher-value, differentiated growth-oriented platform. In 2019, the company won a position on the $82 billion LOGCAP V contract, which is the largest award in the company's history. This 10-year contract positions the company for future revenue growth and geographic expansion into every time zone around the globe. The company also continue to diversify its client portfolio through market share expansion with the Navy and the Air Force and added new clients, including the Department of State. The significant progress made by the company in 2019 represents an important step, a big step in Vectrus' ability to achieve its goal of $2.5 billion in revenue and 7% EBITDA margin. I'd like to take this opportunity to thank our employees worldwide for their efforts and their dedication to our mission. Without their skill, hard work and perseverance. We could not have accomplished all that we have. Thank you to all. Now I'd like to speak about the mechanics of our meeting. Shareholders of record as of March 12 may submit a question by typing the question in an Ask a Question box located on the bottom-left side of the webcast screen. Shareholders who have not already voted or wish to change their vote may do so by clicking on the Vote Here button on the bottom-right side of the webcast screen. No action is required for shareholders who have previously voted by proxy and do not wish to change their vote. Today's agenda and the procedures we will follow for the meeting can be found at the bottom-right side of the webcast screen under Meeting Materials. The first order of business today is to complete the formal portion of the meeting. [Audio Gap] scheduled after that. Before we proceed, I would like to introduce the other directors who are attending the meeting today through this webcast. First, Brad Boston, the Chair of our Compensation and Personnel Committee; Mary Howell, Chair of our Strategy Committee; Bill Murdy; Mel Parker; Eric Pillmore, Chair of our Nominating and Governance Committee; Steve Waechter, Chair of our Audit Committee; Phil Widman; and Chuck Prow, our President, Chief Executive Officer, who will be speaking to you next.

Thank you, Lou, and thank you all for attending the 2020 Annual Meeting of Shareholders today during these difficult times while the world and our nation are responding to a global pandemic. With us today is Kevin Boyle, our Senior Vice President, Chief Legal Officer and General Counsel; Susan Lynch, our Senior Vice President and Chief Financial Officer; and Mike Smith, our Vice President, Investor Relations and Corporate Development. Finally, Kathryn Lamping, our Corporate Secretary, is also attending this meeting and will serve as a Secretary as well as our Inspector of Election for this meeting. Representatives from Deloitte & Touche, the company's independent registered public accounting firm, including Mike Morton, lead client services and audit partner, are also attending this meeting.

Our agenda for today is divided in 2 parts. The first part, we will address the formal business of the meeting, including 4 items for shareholder consideration. The second part will involve remarks from Mr. Prow, our President and CEO, followed by that Q&A session. Will Kevin now present the required formal documents and the affirmation provided by the Secretary of the meeting, confirming that we have a quorum for the meeting?

Thank you, Lou. I present copies of the company's notice of meeting, the 2020 proxy statement, the 2019 annual report to shareholders and the form of proxy together with the affidavit of mailing. These documents and a certified list of shareholders as of the record date of March 12, 2020, will be filed with the records of this meeting. We have a preliminary report of the voting results from our Inspector of Election, which provides that of the 11,586,964 shares of the company's common stock outstanding and entitled to vote as of the record date, a total of approximately 9,400,000 shares are represented in person or by proxy. These shares represent approximately 81% of the shares outstanding and entitled to vote at this meeting, which represents a quorum.

Therefore, I declare that a quorum is present. And this meeting is called to order. [ Voting ] Would Kevin please present the proposals?

The first item of business for consideration by the shareholders is the election of 3 Class III directors. I nominate the 3 director nominees named in the proxy statement: Mr. William Murdy, Mr. Melvin Parker and Mr. Stephen Waechter as Class III directors each to serve as a member of the Board of Directors for a term of 3 years or until his retirement or resignation. No other persons have been nominated in accordance with the company's bylaws. Mr. Chairman, I move for approval of this action.

Mr. Chairman, I second the nominations.

The second item of business is to ratify the appointment of Deloitte & Touche as the company's independent registered public accounting firm for 2020. Mr. Chairman, I move for approval of this action.

Mr. Chairman, I second the motion.

The third item of business is to approve an amendment and restatement of the Vectrus, Inc. 2014 Omnibus Incentive Plan. Mr. Chairman, I move for approval of this action.

I second the motion.

The fourth and final item of business is to approve on an advisory basis the compensation of our named executive officers as described in the 2020 proxy statement. Mr. Chairman, I move for approval of this action pursuant to the following resolution: resolved, that the compensation paid to the company's named executive officers as disclosed in the 2020 proxy statement pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, compensation tables and any related narrative discussion is hereby approved.

Mr. Chairman, I second the motion.

Ladies and gentlemen, this concludes the presentation of the proposals for the meeting. The polls are now closed. Will Kevin please report on the preliminary results of the voting?

The Inspector of Election has certified the following preliminary voting results. More than 87% of the shares represented at this meeting have been voted for the election of each of the Class III Director nominees named in the 2020 proxy statement. More than 99% of the shares represented at this meeting have been voted for the ratification of the appointment of Deloitte & Touche as the company's independent registered public accounting firm for 2020. More than 92% of the shares represented at this meeting have been voted for the approval of an amendment and restatement of Vectrus, Inc.'s 2014 Omnibus Incentive Plan. And more than 98% of the shares represented at this meeting have been voted for the approval on an advisory basis of the compensation of the company's named executive officers as described in the 2020 proxy statement. The Inspector of Election will execute a certificate on the voting results and the certificate will be filed in the minute book of the company along with the minutes of the meeting. We will report the final voting results on a Form 8-K to be filed with the SEC within 4 days of today's meeting.

Thank you. There being no further business to come before the meeting, the Annual Meeting of Shareholders is now adjourned. Mr. Prow, our President and CEO, will now provide a few remarks.

Thank you, Lou. I'd also like to thank everyone who attended our first virtual Annual Meeting of Shareholders today. As Lou mentioned, we are making great strides in executing the strategy. 2019 was a year of continued strategic and financial momentum for Vectrus. As we progress towards our goal to make Vectrus the premier converged infrastructure company in our market, our momentum continues to be reflected in our results. For example, due to our continued focus on growth-related programs and capability enhancement, in 2019, we won approximately $1.2 billion of new business, including a seat on the $82 billion LOGCAP V IDIQ; and protected our base business by winning significant recompetes, which will drive revenue growth in 2020 and beyond. We also expanded our strategic position in the converged market through the acquisition of Advantor. Advantor is well respected and leading integrated electronic security systems offer practical solutions that earn demand in the market and advance Vectrus' position as an innovator in this market. The Vectrus team that we have assembled in the past several years has been instrumental to our success. In 2019, we continued to enhance our leadership with strategic hires while continuing to invest in the development of our people. Our management team continues to focus on process and cost improvement throughout the organization to drive high-quality service delivery for our clients and enhanced returns for all of our stakeholders. Vectrus' transformation into a larger-scale, higher-value differentiated platform is continuing, and we could not be more excited about the future. Our growth momentum and performance improvements are a function of the Vectrus culture of dedication to mission and to client service. It is this culture that is foundational to our success. I would like to thank the people of Vectrus, often operating in remote and austere environments, for their dedication to our business and to the missions we support. Thank you again for attending the meeting today. We look forward to your questions.

Mike, please let us know if we have any questions from shareholders today.

Mr. Chairman, we have no questions to be addressed.

With no questions, that would conclude our Q&A session. So I thank you all again for joining us today. This concludes our meeting session and our Q&A session. Have a great day.

Ladies and gentlemen, this does conclude today's meeting, and we do thank you all for joining. You may now disconnect your lines and we hope that you enjoy the rest of your day.