Record Revenue and Profitability for Aviation
Segment Raised Full-Year Revenue Guidance for Aviation Segment
Positive Cash from Operations and Free Cash Flow to Accelerate in
the Fourth Quarter
VSE Corporation (NASDAQ: VSEC, "VSE", or the "Company"), a
leading provider of aftermarket distribution and maintenance,
repair and overhaul ("MRO") services for air and land
transportation assets for commercial and government markets,
announced today results for the third quarter 2023.
THIRD QUARTER 2023 RESULTS1
(As compared to the Third Quarter 2022; excludes discontinued
operations of Federal & Defense segment)
- Total Revenues of $231.4 million increased 38.2%
- GAAP Net Income of $12.1 million increased 57.3%
- GAAP EPS (Diluted) of $0.80 increased 33.3%
- Adjusted EBITDA of $32.3 million increased 55.6%
- Adjusted Net Income of $13.8 million increased
74.6%
- Adjusted EPS (Diluted) of $0.92 increased 48.4%
1 From continuing operations
MANAGEMENT COMMENTARY
“Third quarter results reflected record financial performance in
our Aviation segment and continued progress and disciplined revenue
growth and customer diversification in our Fleet segment,” said
John Cuomo, President and CEO of VSE Corporation. “We delivered our
fourth consecutive quarter of record revenue and profit in our
Aviation segment, driven by strong program execution, continued
market share gains, expansion of our product lines and service
capabilities, and robust end-market activity. In our Fleet segment,
we continue to grow and scale our commercial business with
contributions from our newly opened Memphis distribution center of
excellence, all while continuing to grow and support legacy fleets
and customers.”
Steve Griffin, CFO of VSE Corporation, commented, “We made
strong progress against our financial and operating plans, which
drove improved overall margins and cash flow in the third quarter.
Our secondary equity offering in July, along with improved cash
generation in the third quarter, allowed us to pay down debt and
execute on two inorganic strategic growth initiatives, including a
transformational investment with Honeywell. Our pro forma net
leverage ratio was 3.7x at the end of the third quarter and is on
track to improve to below 3.5x by the end of the year, driven by an
acceleration in cash generation and strong operating and earnings
performance.”
STRATEGIC UPDATE
Acquisition of Honeywell Fuel Control Systems License
Agreement
- In October 2023, the Aviation segment announced that it had
entered into an asset purchase and perpetual license agreement with
Honeywell International Inc. ("Honeywell") to exclusively
manufacture and support certain of Honeywell’s fuel control systems
on four key engine platforms.
- The new agreement strengthens and expands VSE Aviation's
existing exclusive distributor relationship and MRO support for
these Honeywell fuel control systems.
Acquisition of Desser Aerospace
- On July 3, 2023, VSE completed the acquisition of Desser
Holding Company LLC (“Desser Aerospace”), a global aftermarket
solutions provider of specialty distribution and MRO services.
- The acquisition expands and diversifies the Company’s Aviation
segment product and MRO capabilities and provides a platform for
growth into international markets.
- Desser Aerospace is expected to be fully integrated into the
Aviation segment systems, processes, and organization by the end of
2024.
Federal & Defense Segment
- In September 2023, VSE announced a mutual agreement to
terminate the sale of the Federal and Defense segment to Bernhard
Capital Partners Management LP.
- The Company will continue to pursue the near-term divestiture
of the Federal and Defense business segment's assets, and the
segment will remain in discontinued operations.
BALANCE SHEET OPTIMIZATION
- In July 2023, VSE completed a follow-on equity offering of
2,846,250 shares of common stock at $48.50 per share ("Offering"),
resulting in net cash proceeds of approximately $130 million.
- In July 2023, VSE executed a 3-year fixed interest rate swap
(“Swap”) that hedges the variability in interest payments on $100
million of floating rate debt. As of the end of the third quarter
and following the execution of the Swap, VSE has hedged an
aggregate of $250 million of its variable debt.
THIRD QUARTER SEGMENT RESULTS
Aviation segment revenue increased 48% year-over-year to
a record $152.4 million in the third quarter 2023. The
year-over-year revenue improvement was attributable to strong
program execution of new and existing distribution awards,
increased MRO activity, the addition of Desser Aerospace, and
robust end-market activity. Aviation distribution and repair
revenue increased 46% and 54%, respectively, in the third quarter
2023, versus the prior-year period. The Aviation segment reported
operating income of $21.0 million in the third quarter, compared to
$10.0 million in the same period of 2022. Segment Adjusted EBITDA
increased by 87% in the third quarter to $25.3 million, versus
$13.6 million in the prior-year period. Adjusted EBITDA margin was
16.6%, an increase of approximately 340 basis points versus the
prior-year period, driven primarily by favorable price and product
mix, along with strong MRO revenue growth.
Fleet segment revenue increased 22% year-over-year to
$79.0 million in the third quarter 2023. Revenue from commercial
customers increased 47% on a year-over-year basis, driven by growth
in e-commerce fulfillment and commercial fleet sales. Commercial
revenue represented 47% of total Fleet segment revenue in the
period, an approximate 800 basis point increase year-over-year.
Revenue from the United States Postal Service (USPS) increased
approximately 6% on a year-over-year basis, driven by growth of the
installed base and increased support of legacy vehicle fleets. The
Fleet segment reported operating income of $8.5 million in the
third quarter, compared to $6.5 million in the same period of 2022.
Segment Adjusted EBITDA increased 5% year-over-year to $9.2
million, and Adjusted EBITDA margin declined approximately 190
basis points to 11.6%, primarily impacted by customer and product
mix and under-absorption of fixed costs at the newly launched
distribution and e-commerce fulfillment facility.
FINANCIAL RESOURCES AND LIQUIDITY
As of September 30, 2023, the Company had $89 million in cash
and unused commitment availability under its $350 million revolving
credit facility maturing in 2025. As of September 30, 2023, VSE had
total net debt outstanding of $440 million. Pro forma net leverage2
was approximately 3.7 times as of the end of the third quarter.
VSE anticipates the pro forma net leverage ratio to be below 3.5
times by the end of the fourth quarter 2023, following Adjusted
EBITDA contribution and accelerated free cash flow generation in
the fourth quarter.
In July 2023, the Company amended its credit facility with its
lending syndicate in connection with the Desser Aerospace
acquisition. The amendment provided for an incremental $90 million
Term Loan A and a revision of certain financial covenants of the
existing facility.
2 Pro forma net leverage trailing-twelve-month Adjusted EBITDA
includes contributions from prior acquisitions and the recent
purchase of the Honeywell fuel control license
GUIDANCE
VSE increased its full year 2023 revenue growth and its Adjusted
EBITDA margin guidance for its Aviation segment, reaffirmed its
revenue growth and Adjusted EBITDA margin guidance for its Fleet
segment, and expects positive free cash flow to accelerate in the
fourth quarter. The guidance is as follows:
- Aviation segment full year 2023 revenue growth of 30 to 35%, as
compared to the prior year
- Aviation segment Adjusted EBITDA margin expected to be toward
the higher end of the previously provided guidance range of 14 to
16%
- Fleet segment full year 2023 revenue growth of 20 to 25%, as
compared to the prior year
- Fleet segment Adjusted EBITDA margin guidance range of 11 to
13%
- The Company expects free cash flow to accelerate in the fourth
quarter 2023
THIRD QUARTER RESULTS
Three months ended September
30,
Nine months ended September
30,
(in thousands, except per share data)
2023
2022
% Change
2023
2022
% Change
Revenues
$
231,353
$
167,379
38.2
%
$
625,163
$
497,460
25.7
%
Operating income
$
25,264
$
15,109
67.2
%
$
62,677
$
37,663
66.4
%
Income from continuing operations
$
12,111
$
7,699
57.3
%
$
30,318
$
18,743
61.8
%
EPS (Diluted)
$
0.80
$
0.60
33.3
%
$
2.22
$
1.46
52.1
%
THIRD QUARTER SEGMENT RESULTS
The following is a summary of revenues and operating income
(loss) for the three and nine months ended September 30, 2023 and
September 30, 2022:
Three months ended September
30,
Nine months ended September
30,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Revenues:
Aviation
$
152,355
$
102,625
48.5
%
$
390,319
$
300,934
29.7
%
Fleet
78,998
64,754
22.0
%
234,844
196,526
19.5
%
Total revenues
$
231,353
$
167,379
38.2
%
$
625,163
$
497,460
25.7
%
Operating income (loss):
Aviation
$
20,951
$
10,017
109.2
%
$
52,397
$
24,089
117.5
%
Fleet
8,531
6,539
30.5
%
22,284
18,286
21.9
%
Corporate/unallocated expenses
(4,218
)
(1,447
)
191.5
%
(12,004
)
(4,712
)
154.8
%
Operating income
$
25,264
$
15,109
67.2
%
$
62,677
$
37,663
66.4
%
The Company reported $4.7 million and $10.8 million of total
capital expenditures for three and nine months ended September 30,
2023, 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
Reconciliation of Adjusted Income from Continuing Operations
and Adjusted EPS to Income from Continuing Operations
Three months ended September
30,
Nine months ended September
30,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Income from continuing operations
$
12,111
$
7,699
57.3
%
$
30,318
$
18,743
61.8
%
Adjustments to income from continuing
operations:
Non-recurring professional fees
300
—
—
%
300
—
—
%
Debt issuance costs
266
—
—
%
266
—
—
%
Acquisition, integration and restructuring
costs
1,700
283
500.7
%
3,800
762
398.7
%
Russia/Ukraine conflict
—
—
—
%
—
2,335
(100.0
)%
14,377
7,982
80.1
%
34,684
21,840
58.8
%
Tax impact of adjusted items
(566
)
(71
)
697.2
%
(1,090
)
(773
)
41.0
%
Adjusted income from continuing
operations
$
13,811
$
7,911
74.6
%
$
33,594
$
21,067
59.5
%
Weighted average dilutive shares
15,050
12,834
17.3
%
13,639
12,816
6.4
%
Adjusted EPS (Diluted)
$
0.92
$
0.62
48.4
%
$
2.46
$
1.64
50.0
%
Reconciliation of Consolidated EBITDA and Adjusted EBITDA to
Income from Continuing Operations
Three months ended September
30,
Nine months ended September
30,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Income from continuing operations
$
12,111
$
7,699
57.3
%
$
30,318
$
18,743
61.8
%
Interest expense
8,459
4,821
75.5
%
21,805
12,305
77.2
%
Income taxes
4,694
2,589
81.3
%
10,554
6,615
59.5
%
Amortization of intangible assets
3,203
3,813
(16.0
)%
10,743
11,923
(9.9
)%
Depreciation and other amortization
1,836
1,551
18.4
%
4,869
3,978
22.4
%
EBITDA
30,303
20,473
48.0
%
78,289
53,564
46.2
%
Non-recurring professional fees
300
—
—
%
300
—
—
%
Acquisition, integration and restructuring
costs
1,700
283
500.7
%
3,800
762
398.7
%
Russia/Ukraine conflict
—
—
—
%
—
2,335
(100.0
)%
Adjusted EBITDA
$
32,303
$
20,756
55.6
%
$
82,389
$
56,661
45.4
%
Adjusted EBITDA
Summary
(in thousands)
Three months ended September
30,
Nine months ended September
30,
2023
2022
% Change
2023
2022
% Change
Aviation
$
25,320
$
13,570
86.6
%
$
63,453
$
36,369
74.5
%
Fleet
9,193
8,719
5.4
%
26,894
25,251
6.5
%
Adjusted Corporate expenses (1)
(2,210
)
(1,533
)
44.2
%
(7,958
)
(4,959
)
60.5
%
Adjusted EBITDA
$
32,303
$
20,756
55.6
%
$
82,389
$
56,661
45.4
%
(1) Includes certain adjustments not
directly attributable to any of our segments.
Reconciliation of Segment EBITDA and Adjusted EBITDA to
Operating Income
Three months ended September
30,
Nine months ended September
30,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Aviation
Operating income
$
20,951
$
10,017
109.2
%
$
52,397
$
24,089
117.5
%
Depreciation and amortization
4,329
3,413
26.8
%
11,016
9,558
15.3
%
EBITDA
25,280
13,430
88.2
%
63,413
33,647
88.5
%
Acquisition, integration and restructuring
costs
40
140
(71.4
)%
40
387
(89.7
)%
Russia/Ukraine conflict
—
—
—
%
—
2,335
(100.0
)%
Adjusted EBITDA
$
25,320
$
13,570
86.6
%
$
63,453
$
36,369
74.5
%
Fleet
Operating income
$
8,531
$
6,539
30.5
%
$
22,284
$
18,286
21.9
%
Depreciation and amortization
662
2,037
(67.5
)%
4,452
6,611
(32.7
)%
EBITDA
$
9,193
$
8,576
7.2
%
26,736
24,897
7.4
%
Acquisition, integration and restructuring
costs
—
143
(100.0
)%
158
354
(55.4
)%
Adjusted EBITDA
$
9,193
$
8,719
5.4
%
$
26,894
$
25,251
6.5
%
Reconciliation of Operating Cash to Free Cash Flow
Three months ended September
30,
Nine months ended September
30,
(in thousands)
2023
2022
2023
2022
Net cash used in operating activities
$
15,320
$
15,932
$
(49,771
)
$
(4,206
)
Capital expenditures
(4,658
)
(4,670
)
(10,795
)
(7,416
)
Free cash flow
$
10,662
$
11,262
$
(60,566
)
$
(11,622
)
Reconciliation of Debt to Net Debt
Three months ended
(in thousands)
March 31, 2023
June 30, 2023
September 30, 2023
Principal amount of debt
$
353,998
$
377,000
$
463,500
Debt issuance costs
(2,143
)
(1,890
)
(2,730
)
Cash and cash equivalents
(532
)
(4,163
)
(20,667
)
Net Debt
$
351,323
$
370,947
$
440,103
Net Leverage Ratio
Three months ended
($ in thousands)
March 31, 2023
June 30, 2023
September 30, 2023
Net Debt
$
351,323
$
370,947
$
440,103
TTM Adjusted EBITDA (1)
$
96,160
$
99,735
$
105,329
Net Leverage Ratio
3.7 x
3.7 x
4.2 x
TTM Adjusted EBITDA Proforma (2)
$
97,372
$
100,531
$
120,080
Pro forma Net Leverage Ratio
3.6 x
3.7 x
3.7 x
(1) TTM Adjusted EBITDA is defined as
Adjusted EBITDA for the most recent twelve (12) month period and
includes contributions from FDS.
(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, net debt 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 including any
earn-out adjustments, loss on sale of a business entity and certain
assets, gain on sale of property, 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. Net debt is defined as total debt less cash and cash
equivalents. Free cash flow represents operating cash flow less
capital expenditures.
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, November 2, 2023 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=1634643&tp_key=a94e85f508
To listen to a replay of the teleconference through November 16,
2023:
Domestic Replay:
(844) 512-2921
International Replay:
(412) 317-6671
Replay PIN Number:
10182410
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 services and products, visit
www.vsecorp.com.
AVIATION
Distribution & MRO Services
VSE’s Aviation segment provides aftermarket MRO and
distribution services to commercial, business and general aviation,
cargo, military/defense and rotorcraft customers globally. Core
services include parts distribution, component and engine accessory
MRO services, rotable exchange and supply chain services.
FLEET
Distribution & Fleet Services
VSE's Fleet segment provides parts, inventory management,
e-commerce fulfillment, logistics, supply chain support and other
services to the commercial aftermarket medium- and heavy-duty truck
market, the United States Postal Service (USPS), and the United
States Department of Defense. Core services include parts
distribution, sourcing, IT solutions, customized fleet logistics,
warehousing, kitting, just-in-time supply chain management,
alternative product sourcing, engineering and technical
support.
Please refer to the Form 10-Q that will be filed with the
Securities and Exchange Commission (SEC) on or about November 2,
2023 for more details on our third quarter 2023 results. Also,
refer to VSE’s Annual Report on Form 10-K for the year ended
December 31, 2022 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, 2022. 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)
September 30,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
20,667
$
305
Receivables (net of allowance of $3.5
million and $2.0 million, respectively)
129,113
90,599
Unbilled receivables
6,257
7,409
Inventories
494,368
380,438
Other current assets
21,937
15,202
Current assets held-for-sale
98,021
54,925
Total current assets
770,363
548,878
Property and equipment (net of accumulated
depreciation of $35.4 million and $30.7 million, respectively)
53,269
40,501
Intangible assets (net of accumulated
amortization of $132.0 million and $121.3 million,
respectively)
118,865
86,558
Goodwill
345,726
217,262
Operating lease right-of-use asset
25,166
21,558
Other assets
29,591
29,019
Non-current assets held-for-sale
$
—
$
56,013
Total assets
$
1,342,980
$
999,789
Liabilities and Stockholders' equity
Current liabilities:
Current portion of long-term debt
$
19,000
$
10,000
Accounts payable
137,788
128,504
Accrued expenses and other current
liabilities
33,387
31,889
Dividends payable
1,575
1,282
Current liabilities held-for-sale
60,398
52,929
Total current liabilities
252,148
224,604
Long-term debt, less current portion
441,770
276,300
Deferred compensation
7,470
7,398
Long-term lease obligations under
operating leases
21,961
19,154
Deferred tax liabilities
9,671
4,986
Other long-term liabilities
440
—
Non-current liabilities held-for-sale
—
17,821
Total liabilities
733,460
550,263
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.05 per share,
authorized 23,000,000 shares; issued and outstanding 15,747,289 and
12,816,613, respectively
787
641
Additional paid-in capital
227,083
92,620
Retained earnings
374,672
351,297
Accumulated other comprehensive loss
6,978
4,968
Total stockholders' equity
609,520
449,526
Total liabilities and stockholders'
equity
$
1,342,980
$
999,789
VSE Corporation and
Subsidiaries
Unaudited Consolidated Statements of
Income
(in thousands except share and per share
amounts)
For the three months ended
September 30,
For the nine months ended
September 30,
2023
2022
2023
2022
Revenues:
Products
$
184,691
$
136,333
$
505,135
$
414,505
Services
46,662
31,046
120,028
82,955
Total revenues
231,353
167,379
625,163
497,460
Costs and operating expenses:
Products
160,326
121,620
442,714
372,334
Services
40,004
26,243
102,908
73,768
Selling, general and administrative
expenses
2,556
594
6,121
1,772
Amortization of intangible assets
3,203
3,813
10,743
11,923
Total costs and operating expenses
206,089
152,270
562,486
459,797
Operating income
25,264
15,109
62,677
37,663
Interest expense, net
8,459
4,821
21,805
12,305
Income from continuing operations before
income taxes
16,805
10,288
40,872
25,358
Provision for income taxes
4,694
2,589
10,554
6,615
Income from continuing operations
$
12,111
$
7,699
$
30,318
$
18,743
(Loss) income from discontinued
operations, net of tax
$
(2,554
)
$
1,720
$
(2,789
)
$
4,468
Net income
$
9,557
$
9,419
$
27,529
$
23,211
Earnings (loss) per share:
Basic
Continuing operations
$
0.81
$
0.61
$
2.23
$
1.47
Discontinued operations
(0.17
)
0.13
(0.20
)
0.35
$
0.64
$
0.74
$
2.03
$
1.82
Diluted
Continuing operations
$
0.80
$
0.60
$
2.22
$
1.46
Discontinued operations
(0.17
)
0.13
(0.20
)
0.35
$
0.63
$
0.73
$
2.02
$
1.81
Weighted average shares outstanding:
Basic
15,001,908
12,797,727
13,585,391
12,772,731
Diluted
15,050,062
12,834,084
13,639,064
12,816,319
Dividends declared per share
$
0.10
$
0.10
$
0.30
$
0.30
VSE Corporation and
Subsidiaries
Unaudited Consolidated Statements of
Cash Flows
(in thousands)
For the nine months ended
September 30,
2023
2022
(a)
(a)
Cash flows from operating activities:
Net income
$
27,529
$
23,211
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization
17,461
18,648
Amortization of debt issuance cost
1,028
629
Deferred taxes
(1,179
)
(779
)
Stock-based compensation
5,811
3,597
Provision for inventory
742
1,094
Changes in operating assets and
liabilities, net of impact of acquisitions:
Receivables, net
(25,304
)
(14,506
)
Unbilled Receivables, net
5,409
(12,202
)
Inventories, net
(60,867
)
(28,309
)
Other current assets and other assets
2,122
2,812
Operating lease assets and liabilities,
net
(262
)
(844
)
Accounts payable and deferred
compensation
(16,717
)
(171
)
Accrued expenses and other current and
noncurrent liabilities
(5,544
)
2,614
Net cash used in operating activities
(49,771
)
(4,206
)
Cash flows from investing activities:
Purchases of property and equipment
(10,795
)
(7,416
)
Proceeds from the payment on notes
receivable
1,557
4,235
Cash paid for acquisitions, net of cash
acquired
(218,674
)
—
Net cash used in investing activities
(227,912
)
(3,181
)
Cash flows from financing activities:
Borrowings on bank credit facilities
610,188
358,051
Repayments on bank credit facilities
(435,298
)
(345,554
)
Proceeds from issuance of common stock
129,566
486
Earn-out obligation payments
—
(1,250
)
Payment of debt financing costs
(1,448
)
—
Payment of taxes for equity
transactions
(1,113
)
(942
)
Dividends paid
(3,861
)
(3,832
)
Net cash provided by financing
activities
298,034
6,959
Net increase (decrease) in cash and cash
equivalents
20,351
(428
)
Cash and cash equivalents, beginning of
period
478
518
Cash and cash equivalents, end of
period
$
20,829
$
90
(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/20231101692859/en/
Michael Perlman VP, Investor Relations & Communications T:
(954) 547-0480 M: (561) 281-0247 investors@vsecorp.com
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