Record Revenue and Record Profitability for
Aviation Segment
VSE Corporation (NASDAQ: VSEC, "VSE", or the "Company"), a
leading provider of aftermarket distribution and repair services,
announced today results for the second quarter 2024.
SECOND QUARTER 2024 RESULTS(1)
(As compared to the Second Quarter 2023)
- Total Revenues of $266.0 million increased 29.6%
- GAAP Net Loss of $(2.8) million decreased 127.5%
- GAAP EPS (Diluted) of $(0.16) decreased 120.5%
- Adjusted EBITDA(2) of $31.3 million increased 18.4%
- Adjusted Net Income(2) of $11.0 million increased
4.5%
- Adjusted EPS (Diluted)(2) of $0.64 decreased 22.0%
1 From continuing operations 2 Non-GAAP measure. See additional
information at the end of this release regarding non-GAAP financial
measures
MANAGEMENT COMMENTARY
"The VSE team delivered another milestone quarter marked by
record revenue and profitability for our Aviation segment coupled
with solid execution against our 2024 strategic transformation
priorities," said John Cuomo, President and CEO of VSE Corporation.
"Within our Aviation segment, we reported 55% revenue growth and a
70-basis point improvement in Adjusted EBITDA margins as compared
to the prior year, driven by a very balanced quarter of execution
supported by strong performance of existing distribution programs,
the scaling of new distribution awards, an expanded portfolio of
maintenance, repair and overhaul ("MRO") capabilities, and
contributions from recent acquisitions. Although our Fleet segment
results were temporarily impacted by the United States Postal
Service's ("USPS") transition to a new Fleet Management Information
System ("FMIS"), the decline in USPS revenue was partially offset
by 22% growth in our e-commerce fulfillment and commercial fleet
businesses."
"We enter the second half of the year with significant momentum
within our Aviation business and a continued focus on executing our
strategic and operating plans," Mr. Cuomo continued. "This includes
scaling our new European distribution center of excellence,
supporting our Pratt & Whitney Canada Europe, Middle East and
Africa ("EMEA") agreement, launching our new OEM licensed
manufacturing program, integrating the Desser Aerospace
acquisition, and executing on our growth and integration plans for
the Turbine Controls, LLC ("TCI") acquisition. Within our Fleet
business, we remain committed to supporting the USPS through this
period of transition, while continuing to scale our e-commerce
fulfillment and commercial fleet businesses. We remain confident in
the long-term market trends in both businesses and believe we are
strategically well positioned to capitalize on the opportunities
that lie ahead."
"In the second quarter, we made significant progress in
strengthening our balance sheet and reducing our net leverage,"
stated Tarang Sharma, Chief Accounting Officer and Interim Chief
Financial Officer of VSE Corporation. "Following the acquisition of
TCI in April 2024, we reduced debt and net leverage through a
successful equity offering in May 2024. Pro forma net leverage
ratio is currently 3.2 times, within our target range of 3.0 to 3.5
times. We are in position to further improve net leverage by
year-end, driven by stronger free cash flow generation in the
second half of the year, supported by the optimization of working
capital following our strategic inventory investments in the first
half of the year."
STRATEGIC UPDATE
AVIATION NEW PROGRAM EXECUTION AND ACQUISITION
UPDATE:
- The Aviation segment continues to scale the new European
Distribution Center of Excellence in Hamburg, Germany. The
facility, launched earlier this year, supports the Pratt &
Whitney Canada EMEA program which is performing in line with
expectations and is expected to be at a full year run-rate by the
fourth quarter of 2024. In late 2024, the facility is expected to
support additional distribution products, including tires, tubes
and batteries.
- The launch of the new OEM licensed manufacturing fuel control
program continues to outpace early expectations and contribute to
the segment's profitability. The Kansas facility expansion
supporting the fuel control program remains on track to be
operational by the end of this year.
- The integration of Desser Aerospace is in process with plans to
be completed over the next twelve-months.
- VSE Aviation's new e-commerce site supporting both VSE Aviation
and legacy Desser customers is on schedule to launch in the third
quarter of 2024.
- On April 24, 2024, VSE completed the acquisition of TCI, a
leading provider of aftermarket MRO support services for complex
engine components, as well as engine and airframe accessories. The
initial performance of TCI has exceeded expectations, and VSE's
initial focus is on expanding capacity and increasing its scope
with existing OEM partners.
FLEET UPDATE:
- Fleet remains committed to supporting the USPS through their
transition to a new FMIS platform.
- The Memphis distribution center of excellence continues to
scale and support above-market growth and additional market share
opportunities.
- The Fleet segment strategic review is in process and the
Company expects to provide additional updates after the USPS system
transition is complete and the revenue recovery is realized, both
of which are anticipated to be in late 2024.
CORPORATE UPDATE:
Completed Follow-on Equity Offering
- In May 2024, VSE completed a follow-on equity offering of
2,429,577 shares of common stock at $71.00 per share, resulting in
net cash proceeds of approximately $162.0 million.
- The net proceeds from the offering were used to repay
outstanding borrowings under its revolving loan facility, including
borrowings that were used to fund its acquisition of TCI and to
support future strategic acquisitions.
Corporate Restructuring
- As previously disclosed, the Company expected to recognize
approximately $15 to $18 million in additional restructuring
charges related to the relocation of the Company's headquarters and
other corporate restructuring initiatives supporting the
finalization of the Federal and Defense segment divestiture. In
connection with these activities, the Company recorded a charge of
$17 million in the second quarter and expects no subsequent
material charges related to the aforementioned activities.
- VSE plans to relocate its corporate headquarters to one of its
Aviation segment's operating facilities later in 2024.
SECOND QUARTER SEGMENT RESULTS
Aviation segment revenue increased 55% year-over-year to
a record $192.8 million in the second quarter of 2024. The
year-over-year revenue improvement was attributable to strong
program execution of new and existing distribution awards, an
expanded portfolio of MRO capabilities, and contributions from
recent acquisitions. On an organic basis, revenue increased
approximately 14%, as compared to the prior-year period. Aviation
distribution and MRO revenue increased 32% and 112%, respectively,
in the second quarter of 2024, versus the prior-year period. The
Aviation segment reported operating income of $24.5 million in the
second quarter, compared to $15.8 million in the same period of
2023. Segment Adjusted EBITDA increased by 61% in the second
quarter to $31.0 million, versus $19.2 million in the prior-year
period. Adjusted EBITDA margin was 16.1%, an increase of
approximately 70 basis points versus the prior-year period, driven
primarily by favorable price and product mix, along with strong MRO
revenue growth slightly offset by lower margins from recent
acquisitions.
Fleet segment revenue decreased 9% year-over-year to
$73.1 million in the second quarter of 2024. Revenue from the USPS
declined approximately 37% on a year-over-year basis. This revenue
decline was primarily driven by USPS' transition to a new FMIS
platform, which is expected to be completed in the third quarter of
2024. Revenue from commercial customers increased 22% on a
year-over-year basis, driven by growth in e-commerce fulfillment
and commercial fleet sales. Commercial, or non-USPS, revenue
represented 64% of total Fleet segment revenue in the period. The
Fleet segment reported operating income of $2.2 million in the
second quarter, compared to $7.9 million in the same period of
2023. Segment Adjusted EBITDA decreased 65.7% year-over-year to
$3.3 million, and Adjusted EBITDA margin declined approximately 740
basis points to 4.5%, primarily driven by the decline in USPS
revenue.
FINANCIAL RESOURCES AND LIQUIDITY
As of June 30, 2024, the Company had $194 million in cash and
unused commitment availability under its $350 million revolving
credit facility maturing in 2026. As of June 30, 2024, VSE had a
total net debt outstanding of $445 million. Pro forma net leverage
was approximately 3.2 times Adjusted EBITDA as of the end of the
second quarter.
GUIDANCE
VSE is reaffirming its full-year 2024 revenue growth and
Adjusted EBITDA margin guidance for its Aviation segment. The
guidance is as follows:
- Aviation segment full-year 2024 revenue guidance range of 34%
to 38% growth, as compared to the prior year.
- Aviation segment full-year 2024 Adjusted EBITDA margin guidance
range of 15.5% to 16.5%.
VSE is reaffirming its full-year 2024 revenue growth and
Adjusted EBITDA margin guidance for its Fleet segment. The guidance
is as follows:
- Fleet segment full-year 2024 revenue guidance range is 0% to
5%, as compared to the prior year.
- Fleet segment full-year 2024 Adjusted EBITDA margin guidance is
6% to 8%.
SECOND QUARTER RESULTS
Three months ended June 30,
Six months ended June 30,
(in thousands, except per share data)
2024
2023
% Change
2024
2023
% Change
Revenues
$
265,959
$
205,223
29.6
%
$
507,498
$
393,810
28.9
%
Operating income
$
6,132
$
20,637
(70.3
)%
$
30,306
$
37,415
(19.0
)%
Net (loss) income from continuing
operations
$
(2,777
)
$
10,089
(127.5
)%
$
9,323
$
18,209
(48.8
)%
EPS (Diluted)
$
(0.16
)
$
0.78
(120.5
)%
$
0.56
$
1.42
(60.6
)%
SECOND QUARTER SEGMENT RESULTS
The following is a summary of revenues and operating income for
the three and six months ended June 30, 2024 and June 30, 2023:
Three months ended June 30,
Six months ended June 30,
(in thousands)
2024
2023
% Change
2024
2023
% Change
Revenues:
Aviation
$
192,828
$
124,729
54.6
%
$
355,211
$
237,964
49.3
%
Fleet
73,131
80,494
(9.1
)%
152,287
155,846
(2.3
)%
Total revenues
$
265,959
$
205,223
29.6
%
$
507,498
$
393,810
28.9
%
Operating income:
Aviation
$
24,468
$
15,783
55.0
%
$
46,778
$
31,447
48.8
%
Fleet
2,211
7,854
(71.8
)%
8,828
13,753
(35.8
)%
Corporate/unallocated expenses
(20,547
)
(3,000
)
584.9
%
(25,300
)
(7,785
)
225.0
%
Operating income
$
6,132
$
20,637
(70.3
)%
$
30,306
$
37,415
(19.0
)%
The Company reported $3.9 million and $11.7 million of total
capital expenditures for three and six months ended June 30, 2024,
respectively.
NON-GAAP MEASURES
In addition to the financial measures prepared in accordance
with generally accepted accounting principles ("GAAP"), this
earnings release also contains Non-GAAP financial measures. These
measures provide useful information to investors, and a
reconciliation of these measures to the most directly comparable
GAAP measures and other information relating to these Non-GAAP
measures is included in the supplemental schedules attached.
NON-GAAP FINANCIAL INFORMATION
Adjusted Net Income from Continuing Operations and Adjusted
EPS
Three months ended June 30,
Six months ended June 30,
(in thousands)
2024
2023
% Change
2024
2023
% Change
Net (loss) income from continuing
operations
$
(2,777
)
$
10,089
(127.5
)%
$
9,323
$
18,209
(48.8
)%
Adjustments to income from continuing
operations:
Acquisition, integration and restructuring
costs
1,689
625
170.2
%
4,037
2,100
92.2
%
Lease abandonment costs
12,857
—
—
%
12,857
—
—
%
Divestiture-related restructuring
costs
3,861
—
—
%
3,861
—
—
%
15,630
10,714
45.9
%
30,078
20,309
48.1
%
Tax impact of adjusted items
(4,596
)
(156
)
2,846.2
%
(5,178
)
(524
)
888.2
%
Adjusted net income from continuing
operations
$
11,034
$
10,558
4.5
%
$
24,900
$
19,785
25.9
%
Weighted average dilutive shares
17,202
12,917
33.2
%
16,571
12,922
28.2
%
Adjusted EPS (Diluted)
$
0.64
$
0.82
(22.0
)%
$
1.50
$
1.53
(2.0
)%
EBITDA and Adjusted EBITDA
Three months ended June 30,
Six months ended June 30,
(in thousands)
2024
2023
% Change
2024
2023
% Change
Net (loss) income from continuing
operations
$
(2,777
)
$
10,089
(127.5
)%
$
9,323
$
18,209
(48.8
)%
Interest expense
9,826
7,366
33.4
%
19,013
13,346
42.5
%
Income taxes
(917
)
3,182
(128.8
)%
1,970
5,860
(66.4
)%
Amortization of intangible assets
4,360
3,601
21.1
%
7,741
7,540
2.7
%
Depreciation and other amortization
2,413
1,587
52.0
%
4,827
3,034
59.1
%
EBITDA
12,905
25,825
(50.0
)%
42,874
47,989
(10.7
)%
Acquisition, integration and restructuring
costs
1,689
625
170.2
%
4,037
2,100
92.2
%
Lease abandonment costs
12,857
—
—
%
12,857
—
—
%
Divestiture-related restructuring
costs
3,861
—
—
%
3,861
—
—
%
Adjusted EBITDA
$
31,312
$
26,450
18.4
%
$
63,629
$
50,089
27.0
%
Adjusted EBITDA
Summary
(in thousands)
Three months ended June 30,
Six months ended June 30,
2024
2023
% Change
2024
2023
% Change
Aviation
$
30,976
$
19,215
61.2
%
$
58,655
$
38,133
53.8
%
Fleet
3,274
9,557
(65.7
)%
10,810
17,701
(38.9
)%
Adjusted Corporate expenses (1)
(2,938
)
(2,322
)
26.5
%
(5,836
)
(5,745
)
1.6
%
Adjusted EBITDA
$
31,312
$
26,450
18.4
%
$
63,629
$
50,089
27.0
%
(1) Includes certain adjustments not
directly attributable to any of our segments.
Segment EBITDA and Adjusted EBITDA
Three months ended June 30,
Six months ended June 30,
(in thousands)
2024
2023
% Change
2024
2023
% Change
Aviation
Operating income
$
24,468
$
15,783
55.0
%
$
46,778
$
31,447
48.8
%
Depreciation and amortization
6,034
3,432
75.8
%
10,968
6,686
64.0
%
EBITDA
30,502
19,215
58.7
%
57,746
38,133
51.4
%
Acquisition, integration and restructuring
costs
474
—
—
%
909
—
—
%
Adjusted EBITDA
$
30,976
$
19,215
61.2
%
$
58,655
$
38,133
53.8
%
Fleet
Operating income
$
2,211
$
7,854
(71.8
)%
$
8,828
$
13,753
(35.8
)%
Depreciation and amortization
723
1,703
(57.5
)%
1,478
3,790
(61.0
)%
EBITDA
2,934
9,557
(69.3
)%
10,306
17,543
(41.3
)%
Acquisition, integration and restructuring
costs
340
—
—
%
504
158
219.0
%
Adjusted EBITDA
$
3,274
$
9,557
(65.7
)%
$
10,810
$
17,701
(38.9
)%
Free Cash Flow
Three months ended June 30,
Six months ended June 30,
(in thousands)
2024
2023
2024
2023
Net cash used in operating activities
$
(17,528
)
$
(16,417
)
$
(96,588
)
$
(65,091
)
Capital expenditures
(3,945
)
(3,297
)
(11,674
)
(6,137
)
Free cash flow
$
(21,473
)
$
(19,714
)
$
(108,262
)
$
(71,228
)
Net Debt
(in thousands)
June 30, 2024
December 31, 2023
Principal amount of debt
$
466,500
$
433,000
Debt issuance costs
(2,992
)
(3,656
)
Cash and cash equivalents
(18,993
)
(7,768
)
Net Debt
$
444,515
$
421,576
Net Leverage Ratio
($ in thousands)
June 30, 2024
December 31, 2023
Net Debt
$
444,515
$
421,576
TTM Adjusted EBITDA (1)
$
127,376
$
113,833
Net Leverage Ratio
3.5 x
3.7 x
TTM Adjusted EBITDA Proforma (2)
$
138,944
$
124,304
Pro forma Net Leverage Ratio
3.2 x
3.4 x
(1) TTM Adjusted EBITDA is defined as
Adjusted EBITDA for the most recent twelve (12) month period.
(2) TTM Pro Forma Adjusted EBITDA includes
pre-acquisition portion of EBITDA for the trailing twelve months
that is not included in historical results.
The non-GAAP Financial Information set forth in this document is
not calculated in accordance with GAAP under SEC Regulation G. We
consider Adjusted Net Income, Adjusted EPS (Diluted), EBITDA,
Adjusted EBITDA, Adjusted EBITDA Pro Forma, net debt, pro forma
leverage ratio and free cash flow as non-GAAP financial measures
and important indicators of performance and useful metrics for
management and investors to evaluate our business' ongoing
operating performance on a consistent basis across reporting
periods. These non-GAAP financial measures, however, should not be
considered in isolation or as a substitute for performance measures
prepared in accordance with GAAP. Adjusted Net Income represents
Net Income adjusted for acquisition-related costs, other discrete
items, and related tax impact. Adjusted EPS (Diluted) is computed
by dividing net income, adjusted for the discrete items as
identified above and the related tax impacts, by the diluted
weighted average number of common shares outstanding. EBITDA
represents net income before interest expense, income taxes,
amortization of intangible assets and depreciation and other
amortization. Adjusted EBITDA represents EBITDA (as defined above)
adjusted for discrete items as identified above. Adjusted EBITDA
Pro Forma represents Adjusted EBITDA plus the pre-acquisition
portion of EBITDA for the trailing twelve months. Net debt is
defined as principal amount of debt less debt issuance costs and
less cash and cash equivalents. Free cash flow represents operating
cash flow less capital expenditures. Pro Forma Net leverage ratio
is calculated as net debt divided by trailing twelve month Adjusted
EBITDA Pro Forma.
The Company has presented forward-looking statements regarding
Adjusted EBITDA margin. This non-GAAP financial measure is derived
by excluding certain amounts, expenses or income, from the
corresponding financial measure determined in accordance with GAAP.
The determination of the amounts that are excluded from this
non-GAAP financial measure is a matter of management judgment and
depends upon, among other factors, the nature of the underlying
expense or income amounts recognized in a given period in reliance
on the exception provided by item 10(e)(1)(i)(B) of Regulation S-K.
We are unable to present a quantitative reconciliation of
forward-looking Adjusted EBITDA margin to its most directly
comparable forward-looking GAAP financial measure because such
information is not available, and management cannot reliably
predict all of the necessary components of such GAAP measure
without unreasonable effort or expense. In addition, we believe
such reconciliation would imply a degree of precision that would be
confusing or misleading to investors. The unavailable information
could have a significant impact on the company's future financial
results. This non-GAAP financial measure is a preliminary estimate
and is subject to risks and uncertainties, including, among others,
changes in connection with quarter-end and year-end adjustments.
Any variation between the company's actual results and preliminary
financial data set forth above may be material.
CONFERENCE CALL
A conference call will be held Thursday, August 1, 2024 at 8:30
A.M. ET to review the Company’s financial results, discuss recent
events and conduct a question-and-answer session.
A webcast of the conference call and accompanying presentation
materials will be available in the Investor Relations section of
VSE’s website at https://ir.vsecorp.com. To listen to the live
broadcast, go to the site at least 15 minutes prior to the
scheduled start time in order to register, download and install any
necessary audio software.
To participate in the live teleconference:
Domestic Live:
(844) 826-3035
International Live:
(412) 317-5195
Audio Webcast:
https://viavid.webcasts.com/starthere.jsp?ei=1676442&tp_key=0fcc995209
To listen to a replay of the teleconference through August 15,
2024:
Domestic Replay:
(844) 512-2921
International Replay:
(412) 317-6671
Replay PIN Number:
10189934
ABOUT VSE CORPORATION
VSE is a leading provider of aftermarket distribution and repair
services. Operating through its two key segments, VSE significantly
enhances the productivity and longevity of its customers'
high-value, business-critical assets. The Aviation segment is a
leading provider of aftermarket parts distribution and maintenance,
repair, and overhaul ("MRO") services for components and engine
accessories to commercial, business, and general aviation
operators. The Fleet segment specializes in part distribution,
engineering solutions, and supply chain management services catered
to the medium and heavy-duty fleet market. For more detailed
information, please visit VSE's website at www.vsecorp.com.
Please refer to the Form 10-Q that will be filed with the
Securities and Exchange Commission ("SEC") on or about August 1,
2024 for more details on our second quarter 2024 results. Also,
refer to VSE’s Annual Report on Form 10-K for the year ended
December 31, 2023 for further information and analysis of VSE’s
financial condition and results of operations. VSE encourages
investors and others to review the detailed reporting and
disclosures contained in VSE’s public filings for additional
discussion about the status of customer programs and contract
awards, risks, revenue sources and funding, dependence on material
customers, and management’s discussion of short- and long-term
business challenges and opportunities.
FORWARD LOOKING STATEMENTS
This document contains certain forward-looking statements. These
forward-looking statements, which are included in accordance with
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, may involve known and unknown risks,
uncertainties and other factors that may cause VSE’s actual results
and performance in future periods to be materially different from
any future results or performance suggested by the forward-looking
statements in this document. Although we believe the expectations
reflected in such forward-looking statements are based upon
reasonable assumptions, we can give no assurance that actual
results will not differ materially from these expectations.
“Forward-looking” statements, as such term is defined by the SEC in
its rules, regulations and releases, represent our expectations or
beliefs, including, but not limited to, statements concerning our
operations, economic performance, financial condition, growth and
acquisition strategies, investments and future operational plans.
Without limiting the generality of the foregoing, words such as
“may,” “will,” “expect,” “believe,” “anticipate,” “intend,”
“forecast,” “seek,” “plan,” “predict,” “project,” “could,”
“estimate,” “might,” “continue,” “seeking” or the negative or other
variations thereof or comparable terminology are intended to
identify forward-looking statements. These statements, by their
nature, involve substantial risks and uncertainties, certain of
which are beyond our control, and actual results may differ
materially depending on a variety of important factors, including,
but not limited to, factors identified in our reports filed or
expected to be filed with the SEC including our Annual Report on
Form 10-K for the year ended December 31, 2023 and subsequent
filings made with the SEC. All forward-looking statements made
herein are qualified by these cautionary statements and risk
factors and there can be no assurance that the actual results,
events or developments referenced herein will occur or be realized.
Readers are cautioned not to place undue reliance on these forward
looking-statements, which reflect management's analysis only as of
the date hereof. We undertake no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results.
VSE Corporation and
Subsidiaries
Unaudited Consolidated Balance
Sheets
(in thousands except share and
per share amounts)
June 30,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
18,993
$
7,768
Receivables (net of allowance of $5.0
million and $3.4 million, respectively)
168,238
127,958
Contract assets
28,575
8,049
Inventories
532,371
500,864
Other current assets
48,198
36,389
Current assets held-for-sale
—
93,002
Total current assets
796,375
774,030
Property and equipment (net of accumulated
depreciation of $42.6 million and $37.4 million, respectively)
72,571
58,076
Intangible assets (net of accumulated
amortization of $74.0 million and $135.6 million, respectively)
165,389
114,130
Goodwill
390,135
351,781
Operating lease right-of-use asset
34,419
28,684
Other assets
35,409
23,637
Total assets
$
1,494,298
$
1,350,338
Liabilities and Stockholders' equity
Current liabilities:
Current portion of long-term debt
$
30,000
$
22,500
Accounts payable
144,645
173,036
Accrued expenses and other current
liabilities
49,159
36,383
Dividends payable
1,842
1,576
Current liabilities held-for-sale
—
53,391
Total current liabilities
225,646
286,886
Long-term debt, less current portion
433,508
406,844
Deferred compensation
7,561
7,939
Long-term operating lease obligations
36,515
24,959
Deferred tax liabilities
4,317
6,985
Other long-term liabilities
5,435
—
Total liabilities
712,982
733,613
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.05 per share,
authorized 23,000,000 shares; issued and outstanding 18,420,008 and
15,756,918, respectively
921
788
Additional paid-in capital
403,666
229,103
Retained earnings
371,872
384,702
Accumulated other comprehensive loss
4,857
2,132
Total stockholders' equity
781,316
616,725
Total liabilities and stockholders'
equity
$
1,494,298
$
1,350,338
VSE Corporation and
Subsidiaries
Unaudited Consolidated
Statements of (Loss) Income
(in thousands except share and
per share amounts)
Three months ended June 30,
Six months ended June 30,
2024
2023
2024
2023
Revenues:
Products
$
188,579
$
165,997
$
375,758
$
320,443
Services
77,380
39,226
131,740
73,367
Total revenues
265,959
205,223
507,498
393,810
Costs and operating expenses:
Products
166,055
147,139
329,038
282,388
Services
72,438
32,327
120,440
62,903
Selling, general and administrative
expenses
4,117
1,519
7,116
3,564
Lease abandonment costs
12,857
—
12,857
—
Amortization of intangible assets
4,360
3,601
7,741
7,540
Total costs and operating expenses
259,827
184,586
477,192
356,395
Operating income
6,132
20,637
30,306
37,415
Interest expense, net
9,826
7,366
19,013
13,346
(Loss) income from continuing operations
before income taxes
(3,694
)
13,271
11,293
24,069
(Benefit) provision for income taxes
(917
)
3,182
1,970
5,860
Net (loss) income from continuing
operations
(2,777
)
10,089
9,323
18,209
Loss from discontinued operations, net of
tax
—
(1,234
)
(18,711
)
(237
)
Net (loss) income
$
(2,777
)
$
8,855
$
(9,388
)
$
17,972
(Loss) earnings per share:
Basic
Continuing operations
$
(0.16
)
$
0.78
$
0.57
$
1.42
Discontinued operations
—
(0.10
)
(1.14
)
(0.02
)
$
(0.16
)
$
0.68
$
(0.57
)
$
1.40
Diluted
Continuing operations
$
(0.16
)
$
0.78
$
0.56
$
1.42
Discontinued operations
—
(0.10
)
(1.13
)
(0.02
)
$
(0.16
)
$
0.68
$
(0.57
)
$
1.40
Weighted average shares outstanding:
Basic
17,152,661
12,886,100
16,468,288
12,865,394
Diluted
17,202,115
12,916,998
16,571,033
12,921,826
Dividends declared per share
$
0.10
$
0.10
$
0.20
$
0.20
VSE Corporation and
Subsidiaries
Unaudited Consolidated
Statements of Cash Flows
(in thousands)
Six months ended June 30,
2024
2023
(a)
(a)
Cash flows from operating activities:
Net (loss) income
$
(9,388
)
$
17,972
Adjustments to reconcile net (loss) income
to net cash used in operating activities:
Depreciation and amortization
12,868
12,011
Amortization of debt issuance cost
665
420
Deferred taxes
(6,925
)
(1,533
)
Stock-based compensation
4,812
3,894
Provision for inventory
—
742
Impairment and loss on sale of business
segment
16,867
—
Loss on sale of property and equipment
421
—
Lease abandonment costs
12,857
—
Changes in operating assets and
liabilities, net of impact of acquisitions:
Receivables
(38,292
)
(21,082
)
Contract assets
6,240
(110
)
Inventories
(25,408
)
(45,580
)
Other current assets and other assets
(14,584
)
(1,274
)
Operating lease assets and liabilities,
net
(362
)
(67
)
Accounts payable and deferred
compensation
(47,047
)
(27,429
)
Accrued expenses and other liabilities
(9,312
)
(3,055
)
Net cash used in operating activities
(96,588
)
(65,091
)
Cash flows from investing activities:
Purchases of property and equipment
(11,674
)
(6,137
)
Proceeds from the sale of business
segment
42,118
—
Proceeds from the payment on notes
receivable
—
1,557
Cash paid for acquisitions, net of cash
acquired
(112,264
)
(11,711
)
Net cash used in investing activities
(81,820
)
(16,291
)
Cash flows from financing activities:
Borrowings on bank credit facilities
419,881
322,813
Repayments on bank credit facilities
(386,381
)
(234,423
)
Proceeds from issuance of common stock
161,692
456
Payment of taxes for equity
transactions
(2,545
)
(1,031
)
Dividends paid
(3,176
)
(2,571
)
Net cash provided by financing
activities
189,471
85,244
Net increase in cash and cash
equivalents
11,063
3,862
Cash and cash equivalents, beginning of
period
7,930
478
Cash and cash equivalents, end of
period
$
18,993
$
4,340
(a) The cash flows related to discontinued
operations and held-for-sale assets and liabilities have not been
segregated, and remain included in the major classes of assets and
liabilities. Accordingly, the Consolidated Statements of Cash Flows
include the results of continuing and discontinued operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731648157/en/
INVESTOR CONTACT Michael Perlman VP, Investor Relations
& Treasury T: (954) 547-0480 M: (561) 281-0247
investors@vsecorp.com
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