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By Barbara Boland, GovConWire, May 10, 2017-Vectrus, Inc. (NYSE:VEC) saw its stock rise 3 percent after it announced better than expected first quarter 2017 results of $290.1 million revenue, and operating income of $11.6 million and diluted earnings per share of $0.60.
Net cash provided by operating activities was $9.9 million in the first quarter or 4% operating margin, compared to $11.8 million or 3.8 percent operating margin in the first quarter of 2016, the company said in a statement.
“We are off to a fast start in 2017, with a much improved operational and financial outlook,” said Chuck Prow, president and chief executive officer of Vectrus. “During the quarter, we were awarded a one year extension and additional option periods on the Kuwait Base Operations and Security Support Services (K-BOSSS) contract, which could extend our performance on the contract through March 2019.”
Vectrus’ $290.1 million revenue was a decrease of $20.6 million, or 6.6 percent, over the same period last year. The company attributed the decrease to less activity “from our Afghanistan programs of $20.2 million and our European programs of $3.2 million, offset by increases of $2.4 million from our U.S. programs and $0.4 million from our Middle East programs.”
The company’s focus on cash collection helped it increase net cash provided by operating activities to $9.9 million, over $8.2 million in 2016. Vectrus also reduced its total debt balance from $85 million at the end of 2016 to $81.5 million.
Vectrus updated its investor guidance to reflect its positive first quarter performance.
“We have updated 2017 guidance to reflect our outlook for the remainder of the year and expect annual revenue to be in the range of $990 million to $1,090 million, up from the previously guided range of $910 million to $1,010 million. Net income is now expected to be in the range of $18.7 million to $22.3 million, up from $17.0 million to $20.5 million. As a result, the range for diluted EPS changes to $1.68 to $2.00 per share, up from $1.53 to $1.83 per share. Net cash provided by operating activities is now expected to be in the range of $22 million to $28 million, up from $20 million to $26 million. Our operating margin guidance of 3.40 percent to 3.60 percent remains unchanged,” said Matt Klein, chief financial officer of Vectrus.