VSE Aviation Announces $350 Million in Distribution Agreements

Rhea-AI Summary

VSE Corporation (NASDAQ: VSEC) announced four major distribution agreements via its VSE Aviation segment worth approximately $350 million. These contracts, ranging from 2 to 15 years, are set to begin in early 2023. Significant agreements include a 15-year partnership with Pratt & Whitney Canada for the Asia Pacific region and a 5-year exclusive distribution deal for fuselage mounted antenna systems in Europe, the Middle East, Africa, and India. These agreements strengthen VSE's position in the aviation market and enhance its long-term revenue potential.

Positive

• Secured four distribution agreements valued at approximately $350 million.
• Strengthened long-term partnerships with leading global OEMs.
• Expanded geographical presence with a 15-year deal in Asia Pacific.
• Increased market reach with exclusive distribution agreements in EMEAI.
• Opens new revenue opportunities for both new and existing business jet customers.

Negative

• None.

ALEXANDRIA, Va.--(BUSINESS WIRE)-- VSE Corporation (NASDAQ: VSEC, "VSE", or the "Company"), a leading provider of aftermarket distribution and maintenance, repair and overhaul ("MRO") services for land, sea and air transportation assets for government and commercial markets, today announced that its VSE Aviation segment has entered into four distribution agreements with various global business and general aviation (“B&GA”) original equipment manufacturers (“OEM”) for a combined value of approximately $350 million. Each of the agreements are anticipated to commence in early 2023, with contract terms ranging between two and 15 years in duration.

“VSE continues to develop strong, long-term partnerships with leading global aircraft engine and airframe manufacturers who value our ‘tip-to-tail’ distribution and product line management solutions,” stated John Cuomo, President and CEO of VSE Corporation. “Our program performance and unique OEM-focused value proposition are being recognized in the market with new business extensions and expansions on existing programs. These awards will serve to advance our domestic and international distribution relationships with both new and existing end-users, while further establishing VSE as a trusted partner of choice in the aviation market.”

“These multi-year agreements are a testament to the extensive technical capabilities and customer-centric, on-demand service VSE provides, along with our deep relationships with global OEM brands who value our integrated solutions and robust program execution capabilities,” stated Ben Thomas, President of VSE Aviation. “We remain focused on providing aftermarket solutions for a growing base of business and general aviation operators, while continuing to build recurring, long-term revenue streams that support the ratable growth of our business.”

The exclusive distribution agreements include the following:

• A new 15-year distribution agreement with Pratt & Whitney Canada in the Asia Pacific region, representing a geographic expansion of the previously-awarded distribution agreement covering North America (announced in 2021). Under the terms of the new agreement, VSE Aviation will provide new engine line maintenance spare parts and engine accessory exchange support to engine operators, customers and maintenance providers located throughout the Asia Pacific regions. VSE Aviation expects to service more than 4,000 aircraft based in 57 different countries in the Asia Pacific region with on-demand, flight-critical components on a 24/7 basis to support scheduled line maintenance and AOG (“aircraft on-ground”) events.
• A new, 5-year distribution agreement with a global OEM to be the exclusive distributor in Europe, Middle East, Africa and India (“EMEAI”) for fuselage mounted antenna (“FMA”) systems. Under the terms of the agreement, VSE Aviation will be the exclusive distributor in EMEAI for satellite communication systems for business jets, designed to provide seamless, broadband-class data connectivity worldwide. VSE Aviation is currently the exclusive North American distributor of tail-mounted antenna systems, and by adding the FMA systems, VSE Aviation can now fully support B&GA operators in the US and EMEAI.
• The expansion of an existing distribution agreement with a global OEM, under which VSE Aviation will be the exclusive distributor of an inertial reference system, a navigation device supporting a wide range of aircraft platforms for Bombardier, Hawker, Dassault, Cessna and Gulfstream jets. The expanded agreement will provide revenue opportunities as both new and existing business jet customers leverage the full breadth of the Company’s combined distribution and repair capabilities.
• A new, 2-year agreement as a sales channel partner to distribute more than 200,000 spare parts supporting Embraer business jets, including the Phenom, Praetor, Legacy, and Lineage airframes. The new distribution program provides VSE Aviation’s B&GA customers with immediate access to spare parts inventory. VSE Aviation was selected as a sales channel partner due its core competency of supporting B&GA airframe OEMs with both in-production and late-in-life component solutions.

ABOUT VSE CORPORATION
VSE is a leading provider of aftermarket distribution and repair services for land, sea and air transportation assets for government and commercial markets. Core services include MRO services, parts distribution, supply chain management and logistics, engineering support, and consulting and training services for global commercial, federal, military and defense customers. VSE also provides information technology and energy consulting services. For additional information regarding VSE's products and services, visit www.vsecorp.com.

FORWARD-LOOKING STATEMENTS
This press release 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 to vary materially from those indicated or anticipated by such statements. Many factors could cause actual results and performance to be materially different from any future results or performance, including, among others, the risk factors described in our reports filed or expected to be filed with the SEC. Any forward-looking statement or statement of belief speaks only as of the date of this press release. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221019005331/en/

INVESTOR RELATIONS:

Noel Ryan | 720.778.2415 | investors@vsecorp.com

Source: VSE Corporation

FAQ

What are the key details of VSE Corporation's new distribution agreements?

VSE Corporation announced four distribution agreements valued at $350 million, with contract terms ranging from 2 to 15 years, starting in early 2023.

How long are the distribution agreements VSE Corporation has entered?

The contracts have terms ranging from 2 years to 15 years.

What is the significance of the partnership with Pratt & Whitney Canada for VSE?

The partnership includes a 15-year distribution agreement for the Asia Pacific region, expanding VSE's existing presence in North America.

What markets will VSE Aviation be targeting with its new agreements?

VSE Aviation is targeting the Asia Pacific, Europe, Middle East, Africa, and India markets, enhancing its international distribution.

What is the estimated value of VSE Corporation's distribution agreements?

The estimated value of the new distribution agreements is approximately $350 million.