"Second quarter results demonstrated solid top line performance, strong new business awards, and favorable cash flow generation despite the impact of COVID-19. Margin and EPS were adversely impacted by one-time closeouts and a contract adjustment to a European program," said Chuck Prow, president and CEO of Vectrus and 2020 Wash100 Award recipient.
Vectrus reported second quarter 2020 revenue of $336.1 million, which increased $4.5 million compared to second quarter 2019. The company’s operating income was $2.4 million. Excluding M&A related and LOGCAP V pre-operational costs, adjusted operating income was $4.7 million.
The company’s EBITDA was $4.4 million for the second quarter 2020, compared to $12.6 million in the second quarter 2019. Adjusted EBITDA was $6.7 million compared to $13.9 million in the second quarter 2019.
Vectrus’ second quarter 2020 diluted EPS was $0.09 compared to $0.66 in second quarter 2019. Adjusted diluted EPS for the second quarter 2020 was $0.24. The tax rate in the second quarter 2020 was a benefit of 2.5 percent as compared to a tax rate of 22.8 percent last year.
The net cash provided by operating activities for the quarter end was $33.3 million, compared to net cash provided by operating activities of $21.8 million in the second quarter of 2019. Cash flow was favorably impacted by approximately $13 million of CARES Act Federal estimated payments and employee payroll tax deferrals.
Net debt at July 3, 2020 was $4.8 million, down from $35.2 million at December 31, 2019. Total debt at July 3, 2020 was $67.5 million, down $3.0 million from $70.5 million at December 31, 2019 due to mandatory payments. Cash at quarter-end was $62.7 million, up from $35.3 million at December 31, 2019.
The COVID-19 pandemic is now estimated to defer 2020 revenue of approximately $65 million and EBITDA of $4 million into future periods. Vectrus will continue to work with its clients to maintain operations and plan a safe return to work in light of the COVID-19 pandemic.
“We are maintaining an agile, deliberate posture with respect to COVID-19 with focus on the safety of our clients and team while executing consistently on our programs. I would like to acknowledge the dedication and innovation our entire workforce has demonstrated to keep the missions we operate at a high level of readiness throughout the ongoing pandemic for our clients,” Prow concluded.
Vectrus is a leading provider of global service solutions with a history in the services market that dates back more than 70 years. The company provides facility and base operations; supply chain and logistics services; information technology mission support; and engineering and digital technology services primarily to U.S. government customers around the world.
Vectrus is differentiated by operational excellence, superior program performance, a history of long-term customer relationships and a strong commitment to its clients' mission success. Vectrus is headquartered in Colorado Springs, Colo., and includes about 7,200 employees spanning 148 locations in 26 countries and territories across four continents. In 2019, Vectrus generated sales of $1.4 billion.