V2X : 2021 Annual Report

V2X, INC.

2021 ANNUAL REPORT

LETTER TO OUR SHAREHOLDERS

On July 5, 2022, Vectrus, Inc. ("Vectrus") completed its merger with the Vertex Aerospace Services Holding Corporation, creating one company, V2X, Inc. ("V2X"), a leading global provider of mission-essential solutions. The financial and strategic benefits of this merger are compelling. V2X has a strong financial profile with the ability to generate substantial cash with low capital expenditure requirements. By providing full life-cycle solutions across a converged environment, we believe V2X is well-positioned to gain higher margins resulting from the new scale and diversified ability to compete for larger integrated business opportunities. This past year, both companies were awarded several significant contracts that are in the early stages of their lifecycles, which provide long-term revenue visibility. Additionally, both companies share a strong mission-oriented foundation that will position V2X to better help clients achieve their objectives, and in the process, create a robust organization

with elevated career development and advancement opportunities for our approximately 14,000 employees.

This highly strategic combination builds on our accomplishments over the last several years and provides an opportunity to significantly accelerate our ability to deliver converged solutions that enhance mission outcomes while creating value for our shareholders and other stakeholders. We are eager to update you on our progress.

Regarding Vectrus' standalone 2021 results, I am pleased to report that we ended our journey on a high note, posting revenue growth of approximately 28% for the year. Our team showcased its agility by meeting the unique needs of our customers through the support of several important missions, including Pacific Defender, a major contingency task order in INDOPACOM, and the Afghanistan refugee mission to assist the Non-Combatant Evacuation Operation. Our team also supported the Department of Defense with the establishment of a water supply system for military housing at Red Hill, Hawaii. Additionally, we demonstrated our ability to support operations of increased size and scope through the phase-in of all the CENTCOM task orders into the LOGCAP V Contract. These task orders provide substantial revenue visibility for the next several years.

In 2021, Vectrus was also awarded the five-year, $44 million AFCAP V Saudi Foreign Military Sales Task Order, our first win in the Kingdom of Saudi Arabia, to provide base operation support to the Air Force. We ended the year with the award of the Fort Benning Logistics Support task order, a five-year, $250 million award under the Enhanced Army Global Logistics Enterprise ("EAGLE") IDIQ Contract. Fort Benning, one of the Department of Defense's power projection platforms, supports the Army's ability to strategically deploy its high priority active and reserve component units. This award builds on our existing EAGLE task order in support of the Logistics Readiness Center at Fort Bragg, another power projection platform, that recently supported troop deployment to the European Area of Operation.

Our strong 2021 results are a testament to our teams' 24/7 dedication to our clients. I would like to thank all Vectrus employees, past and present, for their many contributions and more importantly, for their unwavering dedication to our clients' missions across the globe. We are enormously proud of all that Vectrus has accomplished, and we believe we can look forward to an even brighter future as V2X.

Charles L. Prow

President and Chief Executive Officer

Safe Harbor Statement

Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the Company's merger; growth, including growth in revenue, cash flow and margins; business strategy; business opportunities; bids; awards, outlook, objectives, plans, intentions or goals; and any discussion of future operating or financial performance. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements, our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, the risk factors set forth in our 2021 Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our other filings with the Securities and Exchange Commission. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

INTEGRITY - RESPECT - RESPONSIBILITY - PROFESSIONALISM

Aligned around a shared purpose, our people work alongside our clients, here and abroad, to tackle their most complex challenges with integrity, respect, responsibility and professionalism. Mission connected. Mission committed.

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

Commission File Number: 001-36341

Vectrus, Inc.

(Exact name of registrant as specified in its charter)

Indiana				38-3924636
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
organization)
2424 Garden of the Gods Road, Colorado Springs, Colorado 80919
(Address of Principal Executive Offices)	(Zip Code)
Registrant's telephone number, including area code:
	[phone]
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class	Trading		Name of Exchange on Which Registered
symbol(s)
Common Stock, Par Value $.01 Per Share	VEC			New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☑	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant computed by reference to the closing price at which the common equity was last sold as of July 2, 2021, the last business day of the registrant's most recently completed second quarter, was $543,635,649.

As of February 25, 2022, there were 11,738,546 shares of common stock ($0.01 par value per share) outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Part III will be incorporated by reference in accordance with Instruction G(3) to Form 10-K no later than 120 days after the end of the registrant's fiscal year.

	VECTRUS, INC.
	INDEX TO ANNUAL REPORT ON FORM 10-K
	TABLE OF CONTENTS
		Page No.
	PART I
Item 1.	Business	4
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	29
Item 2.	Properties	29
Item 3.	Legal Proceedings	29
Item 4.	Mine Safety Disclosures	30
	PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer	31
	Purchases of Equity Securities
Item 6.	Selected Financial Data	32
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 8.	Financial Statements and Supplementary Data	43
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	43
Item 9A.	Controls and Procedures	43
Item 9B.	Other Information	46
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	46
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	46
Item 11.	Executive Compensation	46
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related	46
	Stockholder Matters
Item 13.	Certain Relationships and Related Transactions and Director Independence	46
Item 14.	Principal Accounting Fees and Services	46
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	47
Item 16.	Form 10-K Summary	50
Signatures		51