8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 16, 2015

VECTRUS, INC.

(Exact name of Registrant as specified in its charter)

Indiana	0001-36341	38-3924636
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

655 Space Center Drive

Colorado Springs, CO 80915

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (719) 591-3600

[Not Applicable]

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

1

TABLE OF CONTENTS

ITEM 2.02 Results of Operations and Financial Condition	3
ITEM 7.01 Regulation FD Disclosure	3
ITEM 9.01 Financial Statements and Exhibits	4
SIGNATURES	5
EXHIBIT INDEX	6
EX-99.1
EX-99.2

2

ITEM 2.02 Results of Operations and Financial Condition.

Attached hereto as Exhibit 99.1 and incorporated by reference herein is a press release issued by Vectrus, Inc. (the “Company”) on March 16, 2015, that includes financial information for the fourth quarter and full year ending December 31, 2014 and fiscal 2015 guidance. This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 7.01 Regulation FD Disclosure.

Mr. Kenneth Hunzeker, Chief Executive Officer and President, and Mr. Matthew Klein, Senior Vice President and Chief Financial Officer, will present the financial information for the Company for the fourth quarter and full year ending December 31, 2014 and fiscal 2015 guidance on March 17, 2015. A copy of the presentation is attached hereto and incorporated by reference herein as Exhibit 99.2. This information is furnished pursuant to Item 7.01 Regulation FD Disclosure and shall not be deemed filed for purposes of Section 18 of the Exchange Act or incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

3

ITEM 9.01 Financial Statements and Exhibits

(d) Exhibits.
No.	Description
99.1	Press Release dated March 16, 2015, issued by Vectrus, Inc.
99.2	Presentation slides issued by Vectrus, Inc. on March 16, 2015.

4

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 16, 2015	VECTRUS, INC.
	By:	/s/ Kathryn S. Lamping
	Its:	Assistant Secretary

5

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated March 16, 2015, issued by Vectrus, Inc.
99.2	Presentation slides issued by Vectrus, Inc. on March 16, 2015

6

EX-99.1

_{Exhibit 99.1} 

PRESS RELEASE

CONTACT:

Investors

Mike Smith

719-637-5773

michael.smith@vectrus.com

Media

George Rhynedance

719-637-4182

george.rhynedance@vectrus.com

Vectrus Announces Fourth Quarter and Full-Year Fiscal 2014 Results; Issues 2015 Guidance

• First full quarter after successful completion of spinoff

• Recent wins add $975 million to backlog

• Cash provided by operating activities $43.0 million; free cash flow¹ finished strong at $39.1 million

COLORADO SPRINGS, Colo., March 16, 2015 — Vectrus, Inc. (NYSE:VEC) announced fourth quarter and full year 2014 performance results which included revenue of $285.8 million

in the fourth quarter and $1,203.3 million in the full year, operating income of $8.1 million in the fourth quarter and $38.4 million in the full year, cash provided by operating activities $43.0 million and strong free cash flow² of $39.1 million.

"We are reporting financial results that met our internal expectations and position us well to provide critical functions and support to our customers in challenging areas around the world," said Ken Hunzeker, chief executive officer and president of Vectrus. "With an anticipated robust pipeline of identified new business opportunities and a healthy backlog, we are optimistic about our future and our first full year as an independent company."

Fourth Quarter 2014 Results

• Revenue $285.8 million

• Operating income $8.1 million; adjusted operating income²$8.6 million

• Operating margin 2.9 percent; adjusted operating margin²3.0 percent

• Diluted earnings per share $0.31; adjusted diluted earnings per share² $0.33

1

_{Exhibit 99.1} 

Fourth quarter 2014 revenue of $285.8 million declined $41.3 million or 12.6 percent compared to the fourth quarter of 2013. On an adjusted basis, fourth quarter 2014 revenue² of $285.8 million declined $30.6 million or 9.7 percent compared to the fourth quarter of 2013. We experienced an anticipated $43.0 million decline in revenue compared to the fourth quarter of 2013 for our Afghanistan programs. Programs based in Afghanistan contributed $50.7 million of revenue in the fourth quarter of 2014.

"The expected revenue reductions in Afghanistan were partially offset by a $12.4 million increase in revenue from our     core business" said Hunzeker. "Although the operating environment remains challenging, we are seeing signs of stabilization and expect future growth in our (non-Afghanistan) core business during 2015."

Operating income was $8.1 million or 2.9 percent operating margin in the fourth quarter of 2014, compared to $25.2 million or 7.7 percent in the fourth quarter of 2013. On an adjusted basis, operating income² was $8.6 million or 3.0 percent operating margin in the fourth quarter of 2014, compared to $25.8 million or 8.2 percent in 2013.

"Our adjusted operating margin² of 3.0 percent is down 520 bps compared to the prior year, mainly due to lower service requirements on Afghanistan contracts," said Matt Klein chief financial officer at Vectrus. "Our internal operational excellence initiatives and strong performance on recent wins are expected to lead to margin improvements in the future."

Fourth quarter 2014 diluted earnings per share were $0.31 compared to $1.54 in 2013 and adjusted diluted earnings per share² were $0.33 compared to $1.58 in 2013.

Full-Year 2014 Results

•Revenue $1,203.3 million; adjusted revenue²$1,172.0 million

•Operating income $38.4 million; adjusted operating income²$50.0 million

•Operating margin 3.2 percent; adjusted operating margin²4.3 percent

•Diluted earnings per share $2.13; adjusted earnings per share²$2.80

• Cash provided by operating activities $43.0 million; free cash flow² for the year-ended Dec. 31, 2014, was $39.1 million

• Adjusted book-to-bill³ ratio 1.1x; total backlog of $2.9 billion with funded backlog of $814.0 million

Full year revenue of $1,203.3 million declined $308.4 millionor20.4 percent compared to 2013. On an adjusted basis, 2014 revenue² of $1,172.0 million declined $302.7 million or 20.5 percent compared to the prior year. Programs based in Afghanistan declined $243.0 million for the full year, as a result of lower service level requirements and continued troop withdrawals. Programs based in Afghanistan contributed revenue of $270.1 million in 2014. Middle East programs declined $85.7 million for the full year but have recently seen revenue stability in the third and fourth quarter of 2014. The decrease in revenue in fiscal 2014 compared to fiscal 2013 was partially offset by increased activity in U.S. based programs plus a full year of revenue on the Navy FSET program, which began at the end of 2013. Our recent contract wins are expected to add approximately

2

_{Exhibit 99.1} 

$150.0 million of revenue in 2015, mitigating the previously disclosed and anticipated declines associated with Afghanistan.

Operating income was $38.4 million, or 3.2 percent operating margin for the full year 2014, compared to $131.3 million or 8.7 percent in 2013. On an adjusted basis, operating income² was $50.0 million or 4.3 percent operating margin for the full year 2014, compared to $129.1 million or 8.8 percent in 2013 due to lower service requirements on Afghanistan contracts and lower revenue on Middle East programs.

Full year 2014 diluted earnings per share were $2.13 compared to $8.06 in 2013 and adjusted diluted earnings per share² were $2.80 compared to $7.92 in 2013.

The year ended December 31, 2014, cash provided by operating activities was $43.0 million, which is $49.8 million lower when compared to 2013. Free cash flow² was $39.1 million for the full year 2014, which is $51.2 million lower when compared to the same period in 2013, primarily due to changes in business volume.

"Cash flow finished strong due to solid funding positions on contracts and a consistent focus on collections," said Klein.

For the year ending December 31, 2014, adjusted book-to-bill³ ratio was 1.1x. The Company ended the year with total backlog of $2.9 billion, which excludes the October 2014 award of the Thule Base Maintenance contract.

2015 Guidance

"For 2015 we expect revenue to be in the range of $1.1 to $1.2 billion," said Hunzeker. "Our pipeline is strong, with more than $1 billion of new business proposals submitted and pending potential award, and more than $3 billion in potential new business opportunities identified for 2015. We expect full year adjusted operating margin⁴ to range from 3.2 percent to 3.6 percent.”

2015 guidance details include:

Revenue	$1,100M		to	$1,200M
Adjusted operating margin4	3.2	%	to	3.6	%
Free cash flow5	$15M		to	$19M
Adjusted EPS6, diluted	$1.76		to	$2.23

The Company notes that forward-looking statements of future performance made in this release are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the Safe Harbor Statement below.

3

_{Exhibit 99.1} 

Investor Call

Management representatives will conduct an investor briefing and conference call at 8:00 a.m. Eastern time on Tuesday, March 17, 2015.

U.S.-based participants may dial in to the conference call at 888-359-3627, while international participants may dial 719-325-2420. Passcode for both is 1539968. For all other listeners, a live webcast of the briefing and conference call will be available on the Vectrus Investor Relations website at http://investors.vectrus.com.

A replay of the briefing will be posted on the Vectrus website shortly after completion of the call, and will remain available for one year. A telephonic replay will also be available through March 31, 2015 at 877-870-5176 (domestic) or 858-384-5517 (international) with passcode 1539968.

###

Footnotes:

¹ Free cash flow is calculated as Generally Accepted Accounting Principles in the United States of America (GAAP) net cash provided by operating activities less capital expenditures.

² See “Key Performance Indicators and Non-GAAP Financial Measures.”

³ Adjusted book-to-bill is the amount of adjusted funded orders divided by adjusted revenue for the period.

⁴ See “Key Performance Indicators and Non-GAAP Financial Measures.” Full year 2015 adjusted operating margin guidance excludes the pretax impact of separation costs incurred to become a stand-alone public company in the amount of $500K.

⁵Full-year 2015 free cash flow guidance is GAAP net cash provided by operating activities less estimated capital expenditures of $2M.

⁶ See “Key Performance Indicators and Non-GAAP Financial Measures.” Full-year 2015 adjusted diluted EPS guidance reflects the impact, net of tax, of separation costs incurred to become a stand-alone public company in the amount of $320K or $.03 per share. The total number of estimated weighted average diluted common shares outstanding is 10.8M at Dec. 31, 2015.

About Vectrus

Vectrus is a leading, global government services company with a history in the services market that dates back more than 50 years. The company provides infrastructure asset management, information technology and network communication services, and logistics and supply chain management services 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 their mission success. Vectrus is headquartered in Colorado Springs, Colo., and includes more than 5,000 employees spanning 85 locations in 15 countries. In 2014, Vectrus generated sales of $1.2 billion. For more information, visit our website at www.vectrus.com or connect with us on Facebook, Twitter, LinkedIn, and YouTube.

Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the "Act"): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, statements about the spin-off of Vectrus, Inc. (the "Company") from Exelis Inc. (The “Separation”), the terms and the effect of the separation, the nature and impact of such a separation, capitalization of the Company, future strategic plans and other statements that describe the Company's business strategy, outlook, objectives, plans, intentions or goals, and any discussion

4

_{Exhibit 99.1} 

of guidance or future operating or financial performance. Whenever used, words such as "may", "will", "likely", "anticipate", "estimate", "expect", "project", "intend", "plan", "believe", "target", "could," "potential," "continue," or similar terminology. These statements are based on the beliefs and assumptions of the management of the company 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. The company undertakes no obligation to update our forward looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company's historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to: risks and uncertainties relating to the spin-off, including whether the spin-off and related transactions will result in any tax liability, the operational and financial profile of the Company or any of its businesses after giving effect to the spin-off, and the ability of the Company to operate as an independent entity; economic, political and social conditions in the countries in which we conduct our businesses; changes in U.S. or international government defense budgets; protests of new awards; our ability to submit proposals for and/or win all potential opportunities in our pipeline; changes in technology, intellectual property matters, government regulations and compliance therewith, including changes to the Department of Defense procurement process; changes in technology; intellectual property matters; governmental investigations, reviews, audits and cost adjustments; contingencies related to actual or alleged environmental contamination, claims and concerns; delays in completion of the U.S. Government's budget; our success in expanding our geographic footprint or broadening our customer base; our ability to realize the full amounts reflected in our backlog; impairment of goodwill; misconduct of our employees, subcontractors, agents and business partners; our ability to control costs; our level of indebtedness; subcontractor performance; economic and capital markets conditions; ability to retain and recruit qualified personnel; security breaches and other disruptions to our information technology and operations; changes in our tax provisions or exposure to additional income tax liabilities; changes in generally accepted accounting principles; and other factors described in Item 1A – “Risk Factors,” and elsewhere in our Annual Report on Form 10-K and described in our future reports filed with the Securities and Exchange Commission (SEC).

5

_{Exhibit 99.1} 

VECTRUS, INC.

CONSOLIDATED AND COMBINED STATEMENTS OF INCOME

	Three Months Ended December 31,					Year Ended December 31,
(In thousands, except per share data)	2014			2013		2014			2013
Revenue	$	285,765		$	327,074	$	1,203,269		$	1,511,638
Cost of revenue	258,914			282,951		1,084,512			1,297,089
Selling, general and administrative expenses	18,702			18,972		80,340			83,227
Operating income	8,149			25,151		38,417			131,322
Interest (expense) income, net	(1,554		)	19		(1,526		)	111
Income from continuing operations before income taxes	6,595			25,170		36,891			131,433
Income tax expense	3,264			9,007		14,079			47,041
Net income	$	3,331		$	16,163	$	22,812		$	84,392
Earnings Per Share ¹
Basic	$0.32			$1.54		$2.18			$8.06
Diluted	$0.31			$1.54		$2.13			$8.06
Weighted average common shares outstanding - basic	10,480			10,474		10,476			10,474
Weighted average common shares outstanding - diluted	10,696			10,474		10,692			10,474
¹ For periods ended September 27, 2014 and prior, basic and diluted earnings per share are computed using the number of shares of Vectrus common stock outstanding on September 27, 2014, the date on which the Vectrus common stock was distributed to the shareholders of Exelis Inc.

6

_{Exhibit 99.1} 

VECTRUS, INC.

CONSOLIDATED AND COMBINED BALANCE SHEETS

	December 31,
(in thousands, except share information)	2014			2013
Assets
Current assets
Cash	$	42,823		$	10,446
Receivables	202,732			227,534
Costs incurred in excess of billings	7,112			6,199
Other current assets	10,883			10,883
Total current assets	263,550			255,062
Plant, property and equipment, net	8,920			9,239
Goodwill	216,930			222,460
Long-term debt issuance costs, net	3,516			—
Other non-current assets	6,575			2,403
Total non-current assets	235,941			234,102
Total Assets	$	499,491		$	489,164
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable	114,487			109,701
Billings in excess of costs	5,806			12,706
Compensation and other employee benefits	36,580			51,026
Deferred tax liability	25,414			24,667
Short-term debt	11,375			—
Other accrued liabilities	37,073			10,086
Total current liabilities	230,735			208,186
Long-term debt	126,000			—
Deferred tax liability	75,337			74,535
Other non-current liabilities	13,544			15,111
Total non-current liabilities	214,881			89,646
Total liabilities	445,616			297,832
Commitments and contingencies
Shareholders' Equity
Preferred stock; $0.01 par value; 10,000,000 shares authorized; No shares issued and outstanding	—			—
Common stock; $0.01 par value; 100,000,000 shares authorized; 10,484,974 shares issued and outstanding	105			—
Additional paid in capital	52,967			—
Retained earnings	3,331			—
Parent company equity	—			192,218
Accumulated other comprehensive loss	(2,528		)	(886		)
Total shareholders' equity	53,875			191,332
Total Liabilities and Shareholders' Equity	$	499,491		$	489,164

7

_{Exhibit 99.1} 

VECTRUS, INC.

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
(In thousands)	2014			2013
Operating activities
Net income	22,812			84,392
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization expense	2,149			2,631
Loss on disposal of property plant & equipment	103			40
Stock-based compensation	2,324			—
Amortization of debt issuance costs	185			—
Changes in assets and liabilities:
Change in receivables	21,608			101,549
Change in other assets	(1,329		)	(3,770		)
Change in accounts payable	6,169			(51,049		)
Change in billings in excess of costs	(5,266		)	(289		)
Change in deferred taxes	11,282			(15,888		)
Compensation and other employee benefits	(13,245		)	(20,053		)
Change in other liabilities	(3,813		)	(4,771		)
Net cash provided by operating activities	42,979			92,792
Investing activities
Purchases of capital expenditures	(3,847		)	(2,429		)
Proceeds from the disposition of assets	497			—
Net cash used in investing activities	(3,350		)	(2,429		)
Financing activities
Repayments of long-term debt	(2,625		)	—
Cash distribution to subsidiary of Exelis	(136,281		)	—
Proceeds from issuance of long-term debt	140,000			—
Payment of debt issuance costs	(3,701		)	—
Payment of employee withholding taxes on share-based compensation	(229		)	—
Working capital adjustment payment from Exelis	2,600			—
Transfer to Parent, net	(6,371		)	(94,924		)
Net cash used in financing activities	(6,607		)	(94,924		)
Exchange rate effect on cash	(645		)	607
Net change in cash	32,377			(3,954		)
Cash-beginning of year	10,446			14,400
Cash-end of year	42,823			10,446
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	1,201		$	—
Income taxes paid	$	2,667		$	—
Non-cash investing activities:
Purchase of capital expenditures on account	$	92		$	277

8

_{Exhibit 99.1} 

Key Performance Indicators and Non-GAAP Financial Measures

The primary financial performance measures Vectrus uses to manage its business and monitor results of operations are revenue trends and operating income trends. In addition, we consider adjusted revenue, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, and free cash flow, to be useful to management and investors in evaluating our operating performance for the periods presented, and to provide a tool for evaluating our ongoing operations. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives.

Adjusted revenue, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, and free cash flow, however, are not measures of financial performance under generally accepted accounting principles in the United States of America (GAAP) and should not be considered a substitute for revenue, operating income, net income, diluted earnings per share, or net cash provided by operating activities as determined in accordance with GAAP. Reconciliations of adjusted revenue, adjusted operating income, adjusted net income, adjusted diluted earnings per share, and free cash flow are provided below.

“Adjusted revenue” is defined as revenue adjusted to exclude the TARS program revenue which has been retained by Exelis.

“Adjusted operating income” is defined as net income, adjusted to exclude income taxes, interest expense, TARS program operating income, and separation costs incurred to become a public company.

“Adjusted operating margin” is defined as net income, adjusted to exclude income taxes, interest expense, TARS program operating income, and separation costs incurred to become a public company, divided by adjusted revenue.

"Adjusted net income" is defined as net income, adjusted to exclude TARS program operating income and separation costs incurred to become a public company, net of taxes.

"Adjusted diluted earnings per share" is defined as net income, adjusted to exclude TARS program operating income and separation costs incurred to become a public company, net of taxes divided by the weighted average diluted common shares outstanding.

“Free cash flow” is defined as GAAP net cash provided by operating activities less capital expenditures.

	Three Months Ended December 31,					Year Ended December 31,
(In thousands)
Adjusted Revenue (Non-GAAP Measure)	2014		2013			2014			2013
Revenue	$	285,765	$	327,074		$	1,203,269		$	1,511,638
TARS revenue ¹	—		(10,724		)	(31,315		)	(37,018		)
Adjusted revenue	$	285,765	$	316,350		$	1,171,954		$	1,474,620
¹ TARS program historical revenue, which has been retained by Exelis

9

_{Exhibit 99.1} 

(In thousands)	Three Months Ended December 31,						Year Ended December 31,
Adjusted Operating Income (Non-GAAP Measure)	2014			2013			2014			2013
Net income	$	3,331		$	16,163		$	22,812		$	84,392
Income taxes	3,264			9,007			14,079			47,041
Interest income (expense)	(1,554		)	19			(1,526		)	111
Operating income	8,149			25,151			38,417			131,322
Operating margin	2.9		%	7.7		%	3.2		%	8.7		%
TARS operating income ¹ (pretax)	(116		)	(30		)	(1,623		)	(2,909		)
Separation costs ² (pretax)	566			705			13,237			705
Adjusted operating income	$	8,599		$	25,826		$	50,031		$	129,118
Adjusted operating margin	3.0		%	8.2		%	4.3		%	8.8		%
¹ TARS program historical operating income, which has been retained by Exelis.
² Costs incurred to become a stand-alone public company

(In thousands, except for share and per share data)	Three Months Ended December 31,						Year Ended December 31,
Adjusted Diluted Earnings Per Share	2014			2013			2014			2013
Net income	$	3,331		$	16,163		$	22,812		$	84,392
TARS operating income ¹ (pretax)	(116		)	(30		)	(1,623		)	(2,909		)
Separation costs ² (pretax)	566			705			13,237			705
Tax impact of adjustments	(223		)	(242		)	(4,437		)	789
Adjusted net income	$	3,558		$	16,596		$	29,989		$	82,977
GAAP EPS - diluted	$0.31			$1.54			$2.13			$8.06
Adjusted EPS - diluted	$0.33			$1.58			$2.80			$7.92
Weighted average common shares outstanding - diluted	10,696,260			10,474,268			10,691,703			10,474,268

(In thousands)	Year Ended December 31,
Free Cash Flow (Non-GAAP Measure)	2014			2013
Net cash provided by operating activities	$	42,979		$	92,792
Subtract:
Capital expenditures	(3,847		)	(2,429		)
Free cash flow	$	39,132		$	90,363

10

_{Exhibit 99.1} 

SUPPLEMENTAL INFORMATION

	Year Ended December 31,
(In thousands)	2014				2013
Military branch	Revenue		% of Total		Revenue		% of Total
Army	$	1,054,408	88	%	$	1,391,402	92	%
Navy	26,163		2	%	3,333		—	%
Air Force	87,799		7	%	78,669		5	%
Marines	3,648		—	%	426		—	%
Other U.S Government¹	31,251		3	%	37,808		3	%
Total Revenue	$	1,203,269			$	1,511,638
¹ TARS program, which was retained by Exelis

	Year Ended December 31,
(in thousands)	2014			2013
Contract type	Revenue	% of Total		Revenue	% of Total
Firm-Fixed-Price	293,598	24	%	421,853	28	%
Cost-Plus and Cost Reimbursable ¹	909,671	76	%	1,089,785	72	%
Total Revenue	1,203,269			1,511,638
¹ Includes time and material contracts

	Year Ended December 31,
(In thousands)	2014			2013
Contract Relationship	Revenue	% of Total		Revenue	% of Total
Prime Contractor	1,036,717	86	%	1,289,851	85	%
Sub Contractor	166,552	14	%	221,787	15	%
Total Revenue	1,203,269			1,511,638

Source: Vectrus, Inc.

11

EX-99.2

VECTRUS FOURTH QUARTER AND FULL YEAR 2014 EARNINGS PRESENTATION KEN HUNZEKER CHIEF EXECUTIVE OFFICER AND PRESIDENT MATT KLEIN SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER MARCH 17, 2014

SAFE HARBOR STATEMENT Page 2 SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (THE “ACT”): CERTAIN MATERIAL PRESENTED HEREIN INCLUDES FORWARD-LOOKING STATEMENTS INTENDED TO QUALIFY FOR THE SAFE HARBOR FROM LIABILITY ESTABLISHED BY THE ACT. THESE FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS ABOUT THE SPIN-OFF OF VECTRUS, INC. (THE “COMPANY”) FROM EXELIS INC. (“THE SEPARATION”), THE TERMS AND THE EFFECT OF THE SEPARATION, THE NATURE AND IMPACT OF SUCH A SEPARATION, CAPITALIZATION OF THE COMPANY, FUTURE STRATEGIC PLANS AND OTHER STATEMENTS THAT DESCRIBE THE COMPANY'S BUSINESS STRATEGY, OUTLOOK, OBJECTIVES, PLANS, INTENTIONS OR GOALS, AND ANY DISCUSSION OF GUIDANCE OR FUTURE OPERATING OR FINANCIAL PERFORMANCE. WHENEVER USED, WORDS SUCH AS “MAY,” “WILL,” “LIKELY,” "ANTICIPATE,“ "ESTIMATE,“ "EXPECT,“ "PROJECT,“ "INTEND,“ "PLAN,“ "BELIEVE,“ "TARGET,“ “COULD,” “POTENTIAL,” “CONTINUE,” OR SIMILAR TERMINOLOGY. THESE STATEMENTS ARE BASED ON THE BELIEFS AND ASSUMPTIONS OF THE MANAGEMENT OF THE COMPANY 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. SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE COMPANY’S HISTORICAL EXPERIENCE AND OUR PRESENT EXPECTATIONS OR PROJECTIONS. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO: RISKS AND UNCERTAINTIES RELATING TO THE SPIN-OFF, INCLUDING WHETHER THE SPIN- OFF AND THE RELATED TRANSACTIONS WILL RESULT IN ANY TAX LIABILITY, THE OPERATIONAL AND FINANCIAL PROFILE OF THE COMPANY OR ANY OF ITS BUSINESSES AFTER GIVING EFFECT TO THE SPIN-OFF, AND THE ABILITY OF THE COMPANY TO OPERATE AS AN INDEPENDENT ENTITY; ECONOMIC, POLITICAL AND SOCIAL CONDITIONS IN THE COUNTRIES IN WHICH WE CONDUCT OUR BUSINESSES; CHANGES IN U.S. OR INTERNATIONAL GOVERNMENT DEFENSE BUDGETS; GOVERNMENT REGULATIONS AND COMPLIANCE THEREWITH, INCLUDING CHANGES TO THE DEPARTMENT OF DEFENSE PROCUREMENT PROCESS; PROTESTS OF NEW AWARDS; OUR ABILITY TO SUBMIT AND/OR WIN ALL POTENTIAL OPPORTUNITIES IN OUR PIPELINE, CHANGES IN TECHNOLOGY; INTELLECTUAL PROPERTY MATTERS; GOVERNMENTAL INVESTIGATIONS, REVIEWS, AUDITS AND COST ADJUSTMENTS; CONTINGENCIES RELATED TO ACTUAL OR ALLEGED ENVIRONMENTAL CONTAMINATION, CLAIMS AND CONCERNS; DELAYS IN COMPLETION OF THE U.S. GOVERNMENT’S BUDGET; OUR SUCCESS IN EXPANDING OUR GEOGRAPHIC FOOTPRINT OR BROADENING OUR CUSTOMER BASE; OUR ABILITY TO REALIZE THE FULL AMOUNTS REFLECTED IN OUR BACKLOG; IMPAIRMENT OF GOODWILL; MISCONDUCT OF OUR EMPLOYEES, SUBCONTRACTORS, AGENTS AND BUSINESS PARTNERS; OUR ABILITY TO CONTROL COSTS; OUR LEVEL OF INDEBTEDNESS; SUBCONTRACTOR PERFORMANCE; ECONOMIC AND CAPITAL MARKETS CONDITIONS; ABILITY TO RETAIN AND RECRUIT QUALIFIED PERSONNEL; SECURITY BREACHES AND OTHER DISRUPTIONS TO OUR INFORMATION TECHNOLOGY AND OPERATIONS; CHANGES IN OUR TAX PROVISIONS OR EXPOSURE TO ADDITIONAL INCOME TAX LIABILITIES; CHANGES IN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; AND OTHER FACTORS SET FORTH IN ITEM 1A, “RISKS FACTORS,” AND ELSEWHERE IN OUR FORM 10-K AND DESCRIBED IN OUR FUTURE REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC). THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED BY LAW.

Q4 AND FULL YEAR 2014 HIGHLIGHTS Page 3 • Significant wins add $975 million to backlog • Free cash flow(1) finished strong at $39 million; cash provided by operating activities $43 million o Revenue $1,203 million, adjusted revenue(2) $1,172 million o Operating margin 3.2%; adjusted operating margin(2) 4.3% o Diluted earnings per share (EPS)(3) $2.13; adjusted diluted EPS(2)(3) $2.80 per share • Core business stabilizing over the last two quarters (1) Free cash flow is defined as Generally Accepted Accounting Principles in the United States of America (GAAP) net cash provided by operating activities less capital expenditures. See Appendix for reconciliation. (2) Excludes historical results relating to Tethered Aerostat Radar System (TARS) program which was retained by Exelis Inc. in connection with the spin-off and the impact of separation costs incurred to become a stand-alone public company. See Appendix for reconciliation. (3) Reflects weighted average diluted common shares outstanding of 10,691,703 for the year ended December 31, 2014. See Appendix for reconciliation.

CEO OVERVIEW Page 4 • DoD budgetary environment  Budgetary situation remains fluid; however, during the fiscal 2013 sequestration, we did not layoff or furlough any employees • Procurement environment  Seeing movement in awards but protests are prevalent and lengthen the new business cycle • Worldwide support to our customers  At present there are high tensions in the Middle East and Eastern Europe and we stand ready to support our government customers

THE VECTRUS ENVIRONMENT Page 5 • Re-competes a focus in 2015 • Successful phase-ins are a 2015 priority o Three large contracts will phase-in o 2015 revenue from new program wins is estimated to be approx. $150 million o Annualized revenue run rate from new programs subsequent to 2015 is expected to exceed $200 million • Solid foundation and anticipate robust new business pipeline o Strong backlog and contract funding position o Approx. $1 billion of proposals submitted and pending potential awards,(1) 100% for new business o $3 billion in potential new business opportunities identified for 2015 • Operating margins expected to be under pressure in 2015 • Operational Excellence • Core business expected to grow and replace declining Afghanistan revenue (1) IDIQ prime contracts carry no value in pipeline

$600 $800 $1,000 $1,200 $1,400 $1,600 2013 2014 2015E Re ve nu e Afghanistan Core Vectrus +10% -41% REVENUE MIX EVOLVES WITH STRATEGY ($M) Page 6 ($M) Afghanistan Contracts Revenue Mix Aligns to Strategy Army 85% Air Force 13% Navy 2% U.S. 17% Middle East 57% AFG 14% Europe 11% Other 1% 2015E Customer Mix 2015E Geography Mix $480 $625 $513 $270 $160 10% 12% 18% 9% 7% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% $0 $100 $200 $300 $400 $500 $600 $700 2011 2012 2013 2014 2015E Op era ting Ma rgi n Re venu e

2014 FINANCIAL RESULTS Page 7 $ millions, except Operating Margin Q4 2014 Q4 2013 vs. 2013 Funded Orders 177.7$ 155.7$ 22.0$ Revenue 285.8$ 327.1$ (41.3)$ Operating Income 8.1$ 25.2$ (17.1)$ Operating Margin 2.9% 7.7% (480) bps Diluted Earnings Per Share 0.31$ 1.54$ (1.23)$ Fourth Quarter 2014 $ millions, except Operating Margin 2014 2013 vs. 2013 Funded Orders 1,370.6 1,732.4 (36 .8) Revenue 1,203.3 1,511.6 (308.4) Income 38.4$ 131.3$ (92.9)$ Operating Mar in 3.2% 8.7% (550) bps Diluted Earnings Per Share 2.13$ 8.06$ (5.93)$ Net cash provided by operating activities 43.0$ 92.8$ (49.8)$ Full Year 2014

ADJUSTED Q4 2014 FINANCIAL RESULTS(1) Page 8 (1) Excludes historical results relating to TARS program which was retained by Exelis Inc. in connection with the spin-off and the impact of separation costs incurred to become a stand-alone public company. See Appendix for reconciliation. -9.7% REVENUE Core business programs (Non-AFG) stabilize Afghanistan contracts volume down -66.6% OPERATING INCOME Core business programs (Non-AFG) stabilize Afghanistan contracts volume and profit mix down $ millions, except Operating Margin Q4 2014 Q4 2013 vs. 2013 Funded Orders 177.7$ 157.0$ 20.7$ Revenue 285.8$ 316.4$ (30.6)$ Operating Income 8.6$ 25.8$ (17.2)$ Operating Margin 3.0% 8.2% (520) bps Diluted Earnings Per Share 0.33$ 1.58$ (1.25)$ Fourth Quarter 2014

ADJUSTED FY 2014 FINANCIAL RESULTS(1) Page 9 (1) Excludes historical results relating to TARS program which was retained by Exelis Inc. in connection with the spin-off and the impact of separation costs incurred to become a stand- alone public company. See Appendix for reconciliation. (2) Free cash flow is defined as GAAP net cash provided by operating activities less capital expenditures. See Appendix for reconciliation. -20.5% REVENUE Afghanistan contracts down $243M for the full year 2014 to $270 million Lower activity in the Middle East down $86M million in 2013 partially offset by an increase in domestic construction projects and new Navy contract -61.3% OPERATING INCOME Afghanistan contracts down due to volume and profit mix Lower activity in the Middle East Free Cash Flow (2) Strong 2014 cash flows $ millions, except Operating Margin 2014 2013 vs. 2013 Funded Orders 1,345.6$ 1,708.6$ (363.0)$ Revenue 1,172.0$ 1,474.6$ (302.7)$ Operating Income 50.0$ 129.1$ (79.1)$ Operating Margin 4.3% 8.8% (450) bps Diluted Earnings Per Share 2.80$ 7.92$ (5.12)$ Year-to-Date Free Cash Flow (2) 39.1$ 90.4$ (51.2)$ Full Year 2014

BACKLOG(1) • Total Backlog(1) as of year ending December 31, 2014 of $2.9B (excludes Thule Base Maintenance contract award(2) until all protests are resolved) • December 31, 2014 backlog adjusted to include the Thule Base Maintenance contract award(2) of $3.3B Page 10 (2) (1) Total backlog represents firm orders and potential options on multi-year contracts, excluding potential orders under Indefinite Delivery Indefinite Quantity (IDIQ) contracts. (2) On October 31, the Thule contract was awarded to a Danish company owned by Vectrus. The backlog associated with this $411M award is $3.3B. ($B) $0.7 $0.5 $0.5 $0.9 $0.8 $0.8 $2.2 $2.2 $1.9 $1.3 $2.1 $2.1 $0.4 $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 Year Ending December 31, 2013 Q1 2014 Q2 2014 Q3 2014 Year Ending December 31, 2014 Backlog with Thule Base Maintenance contract (2) Thule Unfunded Funded $2.9 $3.3 $2.9 $2.4 $2.7 $2.2

2015 ASSUMPTIONS Page 11 • Top line expected to stabilize o 2015 anticipated revenue composition:  65% Existing Business  21% Re-competes (decisions expected in Q4 2015)  14% Afghanistan contracts (includes expected declines) • New wins expected to generate approx. $150 million of partial year revenue • Margin pressures in 2015; expected to rebound in 2016 • New business pipeline strong with proposals submitted for over $1 billion of potential awards • 2015 mandatory principal payments of $11.4 million and anticipate additional voluntary payments • Equity based founders grants drive non-cash expense totaling $2.4 million • Interest expense approx. $6 million and 2015 effective tax rate approx. 36%

2015 GUIDANCE SUMMARY PAGE 12 (1) Excludes TARS program historical results and separation costs. See Appendix for reconciliation. (2) Guidance excludes the pretax impact of 2015 separation costs, in the amount of $500K. (3) Guidance excludes the impact of 2015 separation costs, net of taxes, in the amount $320K or $.03 per share. EPS is calculated using the estimated weighted average diluted common shares outstanding for the year ended December 31, 2015 of 10.8 million. (4) Free Cash Flow is calculated as GAAP net cash provided by operating activities less capital expenditures. Estimated 2015 capital expenditures of $2M. • 2015 adjusted operating margin guidance less equity based founders grants expense approx. 3.5% to 3.8% • 2015 adjusted diluted EPS guidance less equity based founders grants expense approx. $1.91 to $2.38 $ mi l l ions , except per share amounts 2014 (1) 2015 Mid $Var % Var Revenue 1,100$ to 1,200$ 1,172$ 1,150$ (22)$ -1.9% Adjusted Operating Margin (2) 3.2% to 3.6% 4.3% 3.4% (90) BPS Adjusted Diluted EPS (3) 1.76$ to 2.23$ 2.80$ 1.99$ (0.81)$ -28.9% Fr e Cash Flow (4) 15$ to 19$ 39.1$ 17.0$ (22.1)$ -56.5% 2015 Guidance

VECTRUS INVESTMENT HIGHLIGHTS Page 13 Strong Core Business Enduring Customer Relationships Significant Market Opportunity Large Pipeline of Potential Opportunities and Sound Growth Strategy Solid Financial Position

VECTRUS FOURTH QUARTER AND FULL YEAR 2014 EARNINGS PRESENTATION MARCH 17, 2015

APPENDIX

RECONCILIATION OF NON-GAAP MEASURES (CONT.) Page 16 The primary financial performance measures Vectrus uses to manage its business and monitor results of operations are revenue trends and operating income trends. In addition, we consider adjusted revenue, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, and free cash flow to be useful to management and investors in evaluating our operating performance for the periods presented, and to provide a tool for evaluating our ongoing operations. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives. Adjusted revenue, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, and free cash flow, however, are not measures of financial performance under generally accepted accounting principles in the United States of America (GAAP) and should not be considered a substitute for revenue, operating income, net income, diluted earnings per share or net cash provided by operating activities as determined in accordance with GAAP. Reconciliations of adjusted revenue, adjusted operating income and free cash flow are provided below. “Adjusted revenue” is defined as revenue adjusted to exclude historical results relating to the TARS program which was retained by Exelis Inc. in connection with the spin-off. “Adjusted operating income” is defined as net income, adjusted to exclude income taxes, interest expense, TARS program operating income, and separation costs incurred to become a public company. “Adjusted operating margin” is defined as net income, adjusted to exclude income taxes, interest expense, TARS program operat ing income, and separation costs incurred to become a public company, divided by adjusted revenue. “Adjusted Net Income” is defined as net income, adjusted to exclude TARS program operating income and separation costs incurred to become a public company, net of taxes. “Adjusted Diluted Earnings Per Share” is defined as net income, adjusted to exclude TARS program operating income and separation costs incurred to become a public company, net of taxes, divided by the weighted average diluted common shares outstanding. “Free cash flow” is defined as GAAP net cash provided by operating activities less capital expenditures. (I thousands) Adjust d R venue (Non-GAAP Measure) 2014 2013 2014 2013 Revenue 285,765$ 327,074$ 1,203,269$ 1,511,638$ TARS revenue ¹ -$ (10,724)$ (31,315)$ (37,018)$ Adjusted revenue 285,765$ 316,350$ 1,171,954$ 1,474,620$ Three Months Ended December 31, Year Ended December 31, ¹ TARS program historical revenue, which has been retained by Exelis

RECONCILIATION OF NON-GAAP MEASURES (CONT.) Page 17 (In thousands) Adjusted Operating Income (Non-GAAP Measure) 2014 2013 2014 2013 Net income 3,331$ 16,163$ 22,812$ 84,392$ Income taxes 3,264 9,007 14,079 47,041 Interest income (expense) (1,554) 19 (1,526) 111 Income from operations 8,149 25,151 38,417 131,322 Operating margin 2.9% 7.7% 3.2% 8.7% TARS operating income ¹ (pretax) (116) (30) (1,623) (2,909) Separation costs ² (pretax) 566 705 13,237 705 Adjusted operating income 8,599$ 25,826$ 50,031$ 129,118$ Adjusted operating margin 3.0 % 8.2 % 4.3 % 8.8 % Three Months Ended December 31, Year Ended December 31, (In thousands), xcept EPS Adjusted Diluted Earnings Per Share (Non-GAAP Measure) 2014 2013 2014 201 Net income 3,331$ 16,163$ 22,812$ 84,392$ TARS operating income ¹ (pretax) (116) (30) (1,623) (2,909) Separation costs ² (pretax) 566 705 13,237 705 Tax impact of adjust ents (223) (242) (4,437) 789 Adjusted net income 3, 58$ 16,596$ 29,989$ 82,977$ EPS, diluted $0.31 $1.54 $2.13 $ .06 djusted EPS, diluted $ .33 $1.58 $2.80 $7.92 Weighted average common shares outstanding - diluted 10,696 10,474 10,692 10,474 ¹ TARS program historical operating income, which has been retained by Exelis. ² Costs incurred to become a stand-alone public company Three Months Ended December 31, Year Ended December 31,

RECONCILIATION OF NON-GAAP MEASURES (CONT.) Page 18 (In thousands) Free Cash Flow (Non-GAAP Measure) 2014 2013 Net cash provided by operating activities 42,979$ 92,792$ Subtract: Capital expenditures (3,847) (2,429) Free cash flow 39,132$ 90,363$ Year Ended December 31, (1) TARS program historical revenue, which has been retained by Exelis (In thousands) Adju ted Funded Orders (Non-GAAP Measure) 2014 2013 2014 2013 $ millions Orders 177.7$ 155.7$ 1,370.6$ 1,732.4$ TARS Orders(1) -$ 1.3$ (25.0)$ (23.8)$ Adjusted Orders 177.7$ 157.0$ 1,345.6$ 1,708.6$ Three Months Ended December 31, Year Ended December 31,