VSE Corporation Announces Second Quarter 2024 Results
VSE announced Q2 2024 results with record revenue for the Aviation segment.
Total revenue rose 29.6% to $266 million. Despite the growth, the company reported a GAAP net loss of $(2.8) million and a GAAP EPS of $(0.16). Adjusted EBITDA increased 18.4% to $31.3 million, and adjusted net income rose 4.5% to $11.0 million.
The Aviation segment boosted revenue by 55% to $192.8 million, with operating income up 55%. Meanwhile, the Fleet segment faced a 9% revenue decline due to the USPS’s transition to a new system.
Strategic updates include scaling the European distribution center, launching an OEM manufacturing program, and integrating new acquisitions. VSE completed a follow-on equity offering in May 2024, raising $162 million to reduce debt and support future acquisitions.
As of June 30, 2024, the company had $194 million in liquidity and reaffirmed its full-year revenue and EBITDA guidance.
VSE ha annunciato i risultati del Q2 2024 con un fatturato record per il segmento Aviazione.
Il fatturato totale è aumentato del 29,6% raggiungendo 266 milioni di dollari. Nonostante la crescita, l'azienda ha riportato una perdita netta GAAP di $(2,8) milioni e un utile per azione GAAP di $(0,16). L'EBITDA rettificato è aumentato del 18,4% a 31,3 milioni di dollari e l'utile netto rettificato è salito del 4,5% a 11,0 milioni di dollari.
Il segmento Aviazione ha incrementato il fatturato del 55% a 192,8 milioni di dollari, con un reddito operativo in aumento del 55%. Nel frattempo, il segmento Flotta ha subito un declino del 9% nel fatturato a causa della transizione del USPS a un nuovo sistema.
Tra gli aggiornamenti strategici ci sono l'espansione del centro di distribuzione europeo, il lancio di un programma di produzione OEM e l'integrazione delle nuove acquisizioni. VSE ha completato un offerta di capitale azionario di follow-on nel maggio 2024, raccogliendo 162 milioni di dollari per ridurre il debito e sostenere future acquisizioni.
Al 30 giugno 2024, l'azienda aveva 194 milioni di dollari in liquidità e ha confermato le previsioni di fatturato e EBITDA per l'intero anno.
VSE anunció los resultados del Q2 2024 con ingresos récord en el segmento de Aviación.
Los ingresos totales aumentaron un 29.6% alcanzando 266 millones de dólares. A pesar del crecimiento, la compañía reportó una pérdida neta GAAP de $(2.8) millones y una utilidad por acción GAAP de $(0.16). El EBITDA ajustado creció un 18.4% hasta 31.3 millones de dólares, y el ingreso neto ajustado aumentó un 4.5% a 11.0 millones de dólares.
El segmento de Aviación incrementó los ingresos en un 55% alcanzando 192.8 millones de dólares, con un ingreso operativo también en aumento del 55%. Mientras tanto, el segmento de Flota enfrentó un declive del 9% en ingresos debido a la transición del USPS a un nuevo sistema.
Las actualizaciones estratégicas incluyen la escalabilidad del centro de distribución europeo, el lanzamiento de un programa de fabricación OEM y la integración de nuevas adquisiciones. VSE completó una oferta de acciones de seguimiento en mayo de 2024, recaudando 162 millones de dólares para reducir la deuda y apoyar futuras adquisiciones.
Al 30 de junio de 2024, la compañía contaba con 194 millones de dólares en liquidez y reafirmó su orientación de ingresos y EBITDA para todo el año.
VSE 는 2024년 2분기 결과를 발표하며 항공 부문에서 기록적인 수익을 달성했습니다.
총 수익은 29.6% 증가하여 2억 6,600만 달러에 달했습니다. 성장에도 불구하고 회사는 GAAP 순손실로 $(280만)을 보고했으며 GAAP 주당 순이익은 $(0.16)로 나타났습니다. 조정된 EBITDA는 18.4% 증가하여 3,130만 달러에 도달했으며, 조정된 순이익은 4.5% 증가하여 1,100만 달러로 상승했습니다.
항공 부문은 수익을 55% 증가시키며 1억 9,280만 달러에 도달했고, 운영 수익도 55% 상승했습니다. 한편, 함대 부문은 USPS의 새로운 시스템 전환으로 인해 9%의 수익 감소를 겪었습니다.
전략적 업데이트에는 유럽 유통 센터의 확장, OEM 제조 프로그램 출시, 새로운 인수 통합이 포함됩니다. VSE는 2024년 5월에 후속 자본 제공을 완료하여 1억 6,200만 달러를 모금하여 부채를 줄이고 향후 인수 지원에 사용했습니다.
2024년 6월 30일 기준으로 회사는 1억 9,400만 달러의 유동성을 보유하고 있으며 연간 수익 및 EBITDA 전망을 재확인했습니다.
VSE a annoncé les résultats du T2 2024 avec un chiffre d'affaires record pour le segment Aéronautique.
Les revenus totaux ont augmenté de 29,6% pour atteindre 266 millions de dollars. Malgré cette croissance, la société a rapporté une perte nette GAAP de $(2,8) millions et un BPA GAAP de $(0,16). L'EBITDA ajusté a augmenté de 18,4% pour atteindre 31,3 millions de dollars, et le revenu net ajusté a augmenté de 4,5% pour atteindre 11,0 millions de dollars.
Le segment Aéronautique a boosting le chiffre d'affaires de 55% pour atteindre 192,8 millions de dollars, le résultat opérationnel ayant augmenté de 55%. Pendant ce temps, le segment Flotte a connu une baisse de revenu de 9% en raison de la transition du USPS vers un nouveau système.
Les mises à jour stratégiques comprennent l'extension du centre de distribution européen, le lancement d'un programme de fabrication OEM et l'intégration des nouvelles acquisitions. VSE a complété une offre d'actions de suivi en mai 2024, levant 162 millions de dollars pour réduire la dette et soutenir de futures acquisitions.
Au 30 juin 2024, l'entreprise disposait de 194 millions de dollars en liquidités et a réaffirmé ses prévisions de revenus et d'EBITDA pour l'année entière.
VSE hat die Q2 2024 Ergebnisse mit Rekordumsätzen im Luftfahrtsegment bekannt gegeben.
Der Gesamterlös stieg um 29,6% auf 266 Millionen Dollar. Trotz des Wachstums berichtete das Unternehmen von einem GAAP Nettoverlust in Höhe von $(2.8) Millionen und einem GAAP EPS von $(0.16). Das bereinigte EBITDA erhöhte sich um 18,4% auf 31,3 Millionen Dollar, und das bereinigte Nettoeinkommen stieg um 4,5% auf 11,0 Millionen Dollar.
Das Luftfahrtsegment steigerte den Umsatz um 55% auf 192,8 Millionen Dollar, während das Betriebsergebnis um 55% anstieg. In der Zwischenzeit hatte das Flottensegment einen 9% Rückgang der Umsätze aufgrund des Übergangs des USPS zu einem neuen System.
Strategische Updates umfassen die Skalierung des europäischen Vertriebszentrums, den Start eines OEM-Fertigungsprogramms und die Integration neuer Akquisitionen. VSE schloss im Mai 2024 eine Nachfolgefondsbereitstellung ab und sammelte 162 Millionen Dollar, um Schulden zu reduzieren und zukünftige Akquisitionen zu unterstützen.
Zum 30. Juni 2024 verfügte das Unternehmen über 194 Millionen Dollar an Liquidität und bestätigte die Umsatz- und EBITDA-Prognose für das Gesamtjahr.
- Total revenue increased by 29.6% YoY to $266 million.
- Aviation segment revenue surged by 55% to $192.8 million.
- Operating income for the Aviation segment grew by 55%.
- Adjusted EBITDA increased by 18.4% to $31.3 million.
- VSE completed a follow-on equity offering raising $162 million.
- Company had $194 million in liquidity as of June 30, 2024.
- GAAP net loss of $(2.8) million.
- GAAP EPS decreased by 120.5% to $(0.16).
- Fleet segment revenue declined by 9% due to USPS transition.
- Fleet segment operating income decreased by 71.8%.
Insights
VSE 's Q2 2024 results present a mixed picture. While the company achieved record revenue and profitability in its Aviation segment, with a
The Aviation segment's strong performance, with a
The company's financial position appears stable, with
Looking ahead, VSE has reaffirmed its full-year 2024 guidance for both Aviation and Fleet segments, suggesting confidence in its strategic direction despite current challenges. The company's focus on scaling new programs, integrating acquisitions and optimizing working capital indicates a proactive approach to growth and efficiency.
Investors should closely monitor the Fleet segment's recovery as the USPS completes its system transition, as well as the execution of growth initiatives in the Aviation segment. The company's ability to manage its debt levels and generate free cash flow in the second half of the year will be important factors in its financial health.
VSE 's Q2 results reflect broader trends in the aerospace and defense aftermarket sectors. The strong performance of the Aviation segment, with a
The company's strategic moves, such as the new European Distribution Center and the acquisition of TCI, position it well to capitalize on the growing demand for aftermarket services. The expansion into OEM licensed manufacturing for fuel control systems represents a high-value diversification that could enhance margins.
However, the challenges in the Fleet segment, particularly with the USPS contract, highlight the risks associated with reliance on government contracts. The
The aerospace aftermarket is expected to continue its strong growth trajectory, driven by increasing air travel and an aging global aircraft fleet. VSE's focus on distribution and MRO services aligns well with these trends. The company's ability to integrate recent acquisitions and scale new programs will be critical in maintaining its competitive edge in a consolidating market.
Investors should watch for the impact of potential economic headwinds on commercial aviation and how VSE navigates supply chain challenges that have affected the broader industry. The company's performance relative to peers in terms of margin expansion and market share gains will be key indicators of its long-term success in this dynamic market.
Record Revenue and Record Profitability for Aviation Segment
SECOND QUARTER 2024 RESULTS(1)
(As compared to the Second Quarter 2023)
-
Total Revenues of
$266.0 million 29.6%
-
GAAP Net Loss of
$(2.8) million 127.5%
-
GAAP EPS (Diluted) of
$(0.16) 120.5%
-
Adjusted EBITDA(2) of
$31.3 million 18.4%
-
Adjusted Net Income(2) of
$11.0 million 4.5%
-
Adjusted EPS (Diluted)(2) of
$0.64 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
"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,
"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 $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 $18 million $17 million - 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
Fleet segment revenue decreased
FINANCIAL RESOURCES AND LIQUIDITY
As of June 30, 2024, the Company had
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% to38% growth, as compared to the prior year. -
Aviation segment full-year 2024 Adjusted EBITDA margin guidance range of
15.5% to16.5% .
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% to5% , as compared to the prior year. -
Fleet segment full-year 2024 Adjusted EBITDA margin guidance is
6% to8% .
SECOND QUARTER RESULTS
|
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|
|
|
|
|
|
|
|
|
|
|||||||
|
|
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
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 |
|
|
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 |
|
|
72,571 |
|
|
58,076 |
Intangible assets (net of accumulated amortization of |
|
|
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 |
|
|
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
Source: VSE Corporation
FAQ
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