V2X(US:VVX)2021-03-03 02:50Financial Data and Key Metrics Changes - For Q4 2020, the company reported revenue of $355 million, with adjusted diluted EPS of $1.18, impacted by $26 million due to COVID-related restrictions [11][12] - Full-year revenue was approximately $1.4 billion, up 1% year-over-year, despite a $63 million headwind from COVID, with adjusted EBITDA margin at 4% [12][49] - The company generated $26 million in cash from operations in Q4, with a net income conversion rate of 140% [10][53] Business Line Data and Key Metrics Changes - The backlog increased to $5.1 billion, up 84% year-over-year, driven by the $882 million recompete win of the OMDAC-SWACA contract [13][52] - Navy revenue increased by 22% year-over-year, with notable contract wins including a $210 million contract for base operations support in Bahrain [27] Market Data and Key Metrics Changes - The new business pipeline exceeded $11 billion, a significant increase from $7.5 billion in 2016, indicating growth in federal, non-federal, and international client bases [29] - The company’s funded backlog was approximately $850 million, compared to $707 million last year, reflecting strong demand [52] Company Strategy and Development Direction - The company aims to be a leader in the converged infrastructure market, focusing on transforming operations to a more instrumented and predictive approach [15][21] - Recent acquisitions, including Zenetex and HHB, are expected to enhance capabilities and expand the client base, particularly in the intelligence community [36][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong top and bottom line results in 2021, with revenue growth expected between 20% and 23% [14][56] - The company anticipates challenges from COVID-19 but remains optimistic about transitioning to full operations on LOGCAP V [56][62] Other Important Information - The company expanded its credit facility to $270 million, indicating a strong financial position [55] - Adjusted diluted EPS guidance for 2021 is projected between $3.48 and $4.08, representing a 23% growth rate at the midpoint [61] Q&A Session Summary Question: Revenue guidance and growth rate expectations - Management indicated that the revenue guidance is conservative due to uncertainties related to COVID and the transition to CENTCOM operations, with potential headwinds of $120 million to $160 million [67][70] Question: DoD budget impacts - Management noted no surprises in the budget, with continued focus on the INDOPACOM region by the new administration [77] Question: Smart warehouse and 5G market potential - Management highlighted the importance of converged infrastructure and the expected increase in demand for technology integration in operations [78][79] Question: LOGCAP revenue opportunities - Management expects year-over-year increases in revenue from CENTCOM and INDOPACOM, with more clarity on LOGCAP revenue projections expected later in the year [82][84] Question: Margin expectations for 2021 - Management discussed the impact of program transitions on margins, indicating a wider range for guidance due to various factors including COVID [86] Question: Long-term growth targets - Management expressed confidence in achieving long-term growth targets, emphasizing the importance of continued investment in both organic and inorganic strategies [88][92]