By Wayne Heilman
Colorado Springs-based defense contractor Vectrus Inc. reported record 2018 revenue Tuesday as it awaits the Army’s decision on a contract that generates 40 percent of its revenue.
Revenue was up 14.8 percent from 2017 to $1.28 billion, helped by $350 million in new multiyear contract winsthat will generate revenue in some cases through 2027, the company said. Profits for the same period declined 40.7 percent to $35.3 million, or $3.10 a share, largely as a result of nearly $23 million in tax benefits from the tax cut enacted in late 2017.
Fourth-quarter revenue rose 11.4 percent to $329.6 million, while profits fell more than 75 percent to $10.1 million, or 89 cents a share, also resulting from big gains last year from the tax cut.
“We reported strong fourth quarter and full-year 2018 financial results,” Vectrus CEO Chuck Prow said Tuesday in a news release. “During 2018, we positioned Vectrus as a higher value, growth-oriented platform through several new wins, significantly expanding our client and geographic footprint.” The company expanded its work with the Air Force and Navy through new contracts.
Prow said Vectrus is “well positioned” for selection April 12 as one of up to six winning bidders on the Army’s $82 billion Logistics Civil Augmentation Program (LOGCAP) 5 contract as well as work under the contract for Central Command, which includes the Middle East. That’s because the company already provides logistics services under the Kuwait-Base, Operations and Security Support Service (K-BOSSS) contract and more contracts it has won in Kuwait, Jordan and United Arab Emirates.
The K-BOSSS contract generated more than 40 percent of Vectrus revenue last year, and the Army already has said it plans to extend the contract from March 29 through March 28, 2020. The government also has an option for a six-month extension through Sept. 28, 2020. Since the extension and option still are pending, the amounts have not been disclosed.
Prow said Vectrus remains “on track” to make its five-year goal of doubling revenue to $2.5 billion and nearly doubling its profit margin to 7 percent by combining its strengths in logistics and information technology.
The fourth-quarter and full-year revenue numbers both beat forecasts from the three analysts who follow the company’s stock, while the profit totals fell a bit short of those forecasts. The full-year revenue also beat the company’s most recent forecast, while the profit total was near the top of its forecast.
Vectrus told stockholders to expect revenue this year of $1.3 billion to $1.33 billion and profit of $35.3 million, or $3.07 a share, to $40.4 million, or $3.51 a share.