Record Revenue for Aviation and Fleet
Segments
Raising Full-Year Revenue Guidance and
Maintaining Positive Second-Half Free Cash Flow
VSE Corporation (NASDAQ: VSEC, "VSE", or the "Company"), a
leading provider of aftermarket distribution and maintenance,
repair and overhaul ("MRO") services for air, land and sea
transportation assets for commercial and government markets,
announced today results for the second quarter 2023.
SECOND QUARTER 2023 RESULTS1
(As compared to the Second Quarter 2022; excludes discontinued
operations of Federal & Defense segment)
- Total Revenues of $205.2 million increased 20.9%
- GAAP Net Income of $10.1 million increased 112.2%
- GAAP EPS (Diluted) of $0.78 increased 110.8%
- Adjusted EBITDA of $26.5 million increased 44.3%
- Adjusted Net Income of $10.6 million increased
58.7%
- Adjusted EPS (Diluted) of $0.82 increased 57.7%
1 From continuing operations
MANAGEMENT COMMENTARY
"Strong business performance and market conditions in the second
quarter of 2023 supported double-digit revenue growth and improved
profitability in both our Aviation and Fleet segments,” said John
Cuomo, President and CEO of VSE Corporation. “Our record results
reflect our strengthening customer and supplier relationships,
market share expansion, and robust end-market activity. We expect
to build off this momentum in the second half of 2023, driven by
the strong execution of recently awarded distribution programs, the
expansion of new capabilities within MRO, and the scaling of our
newly launched Memphis, Tennessee distribution and e-commerce
fulfillment facility.”
“Our differentiated market position, strong program execution,
and bespoke product and service offerings, supported by favorable
long-term industry trends, will position us to deliver exceptional
results in the second half of 2023 and beyond”, concluded Mr.
Cuomo.
Steve Griffin, CFO of VSE Corporation, commented, "Following our
oversubscribed secondary equity offering in July 2023, we have
significantly strengthened our balance sheet and reduced net
leverage, providing the Company with increased financial
flexibility. Our balance sheet and improved cash flow in the second
half of the year will serve as a catalyst for our strategic
initiatives and allow us to pursue both organic and inorganic
investment and growth opportunities."
RECENT ANNOUNCEMENTS / STRATEGIC UPDATE
Strong Program Execution and Market Share Gains Driving
Record Financial Performance
- Aviation segment second-quarter revenue increased 19%, driven
by increased MRO activity and strong execution on new and existing
distribution programs
- Fleet segment second-quarter revenue increased 24%, supported
by contributions from all revenue channels with sales growth from
e-commerce fulfillment accounts, commercial fleet customers, and
the United States Postal Service
Balance Sheet Optimization
Completed Follow-on Equity Offering
- In July 2023, VSE completed a follow-on equity offering of
2,475,000 shares of common stock at $48.50 per share ("Offering"),
resulting in net cash proceeds of approximately $112.7 million
- VSE used substantially all of the net proceeds of the Offering
to repay outstanding borrowings under the Company’s revolving
credit facility
- The net proceeds of the Offering significantly increases
balance sheet flexibility, allowing the Company to pursue both
organic and inorganic growth opportunities
Executed Variable-to-Fixed Interest Rate Swap
- 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
- Following the execution of the Swap, VSE has hedged an
aggregate of $250 million of its variable debt
Repositioning of the Business
Sale of Federal & Defense Segment
- In May 2023, VSE entered into a definitive agreement to sell
its Federal and Defense segment to Bernhard Capital Partners
Management LP for up to $100 million in total cash consideration,
including a $50 million earn-out, subject to certain re-compete(s)
being awarded
- The transaction is expected to close in late 2023 or early 2024
and is subject to customary closing conditions and approvals
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
- VSE acquired Desser Aerospace assets for a net purchase price
of $94 million (subject to customary adjustments for working
capital) following the sale of Desser Aerospace’s Proprietary
Solutions
- VSE funded the acquisition with borrowings under a term loan
facility and borrowings under the revolving credit facility
- The acquisition expands and diversifies the Company’s Aviation
segment product and MRO capability offerings and provides a
platform for growth into international markets
- The business will be fully integrated into the Aviation segment
systems, processes and organization
SECOND QUARTER SEGMENT RESULTS
Aviation segment revenue increased 19% year-over-year to
a record $124.7 million in the second quarter 2023. The
year-over-year revenue improvement was attributable to strong
program execution of new and existing distribution awards and
increased MRO activity. Aviation distribution and repair revenue
increased 13% and 37%, respectively, in the second quarter 2023,
versus the prior-year period. The Aviation segment reported
operating income of $15.8 million in the second quarter, compared
to $6.5 million in the same period of 2022. Segment Adjusted EBITDA
increased by 61% in the second quarter to $19.2 million, versus
$11.9 million in the prior-year period. Adjusted EBITDA margin was
15.4%, an increase of approximately 400 basis points versus the
prior-year period, driven primarily by strong MRO revenue growth,
favorable product mix and price.
Fleet segment revenue increased 24% year-over-year to
$80.5 million in the second quarter 2023. Revenue from commercial
customers increased 46% on a year-over-year basis, driven by growth
in commercial fleet and e-commerce fulfillment. Commercial revenue
represented 47% of total Fleet segment revenue in the period, a
7-point increase year-over-year. Revenue from the United States
Postal Service (USPS) increased approximately 15% on a
year-over-year basis, driven by an expansion of the installed base
and increased support of legacy vehicle fleets. The Fleet segment
reported operating income of $7.9 million in the second quarter,
compared to $5.4 million in the same period of 2022. Segment
Adjusted EBITDA increased 23% year-over-year to $9.6 million, and
Adjusted EBITDA margin declined approximately 10 basis points to
11.9%, primarily impacted by customer mix and under-absorption of
fixed costs at the newly launched distribution and e-commerce
fulfillment facility.
FINANCIAL RESOURCES AND LIQUIDITY
As of June 30, 2023, the Company had $71 million in cash and
unused commitment availability under its $350 million revolving
credit facility maturing in 2025. As of June 30, 2023, VSE had
total net debt outstanding of $371 million and $99.8 million of
trailing-twelve months Adjusted EBITDA. Net leverage was 3.7 times
as of the end of the second quarter.
The Company expects the net leverage ratio to be below 3.5 times
by the end of the third quarter 2023, following Adjusted EBITDA
contribution and free cash flow generation in the third quarter,
proceeds from the recently announced common stock offering, and
partially offset by the acquisition of Desser Aerospace.
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.
GUIDANCE
VSE is increasing its full year 2023 revenue guidance. The
Company is maintaining its Adjusted EBITDA margin guidance for its
Aviation and Fleet segments and its positive free cash flow
guidance for the second half of 2023. The new guidance is as
follows:
- Aviation segment full year 2023 revenue guidance is increasing
from 10 to 15% to 25 to 30% growth, as compared to the prior year,
to reflect contributions from the recent Desser Aerospace
acquisition and improved performance within distribution and MRO
sales channels
- Aviation segment expects Adjusted EBITDA margin to be at the
higher end of its previously provided guidance range of 13 to
15%
- Fleet segment full year 2023 revenue guidance is increasing
from 12 to 20% to 20 to 25% growth, as compared to the prior year,
to reflect strong growth in USPS sales and commercial customer
market share gains
- Fleet segment is maintaining its Adjusted EBITDA margin
guidance range of 11 to 13%
- The Company maintains its outlook for positive free cash flow
in the second half of 2023
SECOND QUARTER RESULTS
Three months ended June 30,
Six months ended June 30,
(in thousands, except per share data)
2023
2022
% Change
2023
2022
% Change
Revenues
$
205,223
$
169,761
20.9
%
$
393,810
$
330,081
19.3
%
Operating income
$
20,637
$
10,535
95.9
%
$
37,415
$
22,552
65.9
%
Income from continuing operations
$
10,089
$
4,755
112.2
%
$
18,209
$
11,044
64.9
%
EPS (Diluted)
$
0.78
$
0.37
110.8
%
$
1.42
$
0.87
63.2
%
SECOND QUARTER SEGMENT RESULTS
The following is a summary of revenues and operating income
(loss) for the three and six months ended June 30, 2023 and June
30, 2022:
Three months ended June 30,
Six months ended June 30,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Revenues:
Aviation
$
124,729
$
105,019
18.8
%
$
237,964
$
198,309
20.0
%
Fleet
$
80,494
64,742
24.3
%
155,846
131,772
18.3
%
Total revenues
$
205,223
$
169,761
20.9
%
$
393,810
$
330,081
19.3
%
Operating income (loss):
Aviation
$
15,783
$
6,450
144.7
%
$
31,447
$
14,072
123.5
%
Fleet
$
7,854
5,366
46.4
%
13,753
11,747
17.1
%
Corporate/unallocated expenses
(3,000
)
(1,281
)
134.2
%
(7,785
)
(3,267
)
138.3
%
Operating income
$
20,637
$
10,535
95.9
%
$
37,415
$
22,552
65.9
%
The Company reported $3.3 million and $6.1 million of total
capital expenditures for three and six months ended June 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 June 30,
Six months ended June 30,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Income from continuing operations
$
10,089
$
4,755
112.2
%
$
18,209
$
11,044
64.9
%
Adjustments to income from continuing
operations:
Acquisition, integration and restructuring
costs
625
192
225.5
%
2,100
479
338.4
%
Russia/Ukraine conflict
—
2,335
(100.0
)%
—
2,335
(100.0
)%
10,714
7,282
47.1
%
20,309
13,858
46.6
%
Tax impact of adjusted items
(156
)
(631
)
(75.3
)%
(524
)
(703
)
(25.5
)%
Adjusted income from continuing
operations
$
10,558
$
6,651
58.7
%
$
19,785
$
13,155
50.4
%
Weighted average dilutive shares
12,917
12,811
0.8
%
12,922
12,807
0.9
%
Adjusted EPS (Diluted)
$
0.82
$
0.52
57.7
%
$
1.53
$
1.03
48.5
%
Reconciliation of Consolidated EBITDA and Adjusted EBITDA to
Income from Continuing Operations
Three months ended June 30,
Six months ended June 30,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Income from continuing operations
$
10,089
$
4,755
112.2
%
$
18,209
$
11,044
64.9
%
Interest expense
7,366
3,872
90.2
%
13,346
7,482
78.4
%
Income taxes
3,182
1,908
66.8
%
5,860
4,026
45.6
%
Amortization of intangible assets
3,601
4,016
(10.3
)%
7,540
8,110
(7.0
)%
Depreciation and other amortization
1,587
1,252
26.8
%
3,034
2,427
25.0
%
EBITDA
25,825
15,803
63.4
%
47,989
33,089
45.0
%
Acquisition, integration and restructuring
costs
625
192
225.5
%
2,100
479
338.4
%
Russia/Ukraine conflict
—
2,335
(100.0
)%
—
2,335
(100.0
)%
Adjusted EBITDA
$
26,450
$
18,330
44.3
%
$
50,089
$
35,903
39.5
%
Adjusted EBITDA
Summary
(in thousands)
Three months ended June 30,
Six months ended June 30,
2023
2022
% Change
2023
2022
% Change
Aviation
$
19,215
$
11,935
61.0
%
$
38,133
$
22,798
67.3
%
Fleet
9,557
7,741
23.5
%
17,701
16,532
7.1
%
Adjusted Corporate expenses (1)
(2,322
)
(1,346
)
72.5
%
(5,745
)
(3,427
)
67.6
%
Adjusted EBITDA
$
26,450
$
18,330
44.3
%
$
50,089
$
35,903
39.5
%
(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 June 30,
Six months ended June 30,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Aviation
Operating income
$
15,783
$
6,450
144.7
%
$
31,447
$
14,072
123.5
%
Depreciation and amortization
3,432
3,110
10.4
%
6,686
6,145
8.8
%
EBITDA
19,215
9,560
101.0
%
38,133
20,217
88.6
%
Acquisition, integration and restructuring
costs
—
40
(100.0
)%
—
246
(100.0
)%
Russia/Ukraine conflict
—
2,335
(100.0
)%
—
2,335
(100.0
)%
Adjusted EBITDA
$
19,215
$
11,935
61.0
%
$
38,133
$
22,798
67.3
%
Fleet
Operating income
$
7,854
$
5,366
46.4
%
$
13,753
$
11,747
17.1
%
Depreciation and amortization
1,703
2,246
(24.2
)%
3,790
4,575
(17.2
)%
EBITDA
$
9,557
$
7,612
25.6
%
17,543
16,322
7.5
%
Acquisition, integration and restructuring
costs
—
129
(100.0
)%
158
210
(24.8
)%
Adjusted EBITDA
$
9,557
$
7,741
23.5
%
$
17,701
$
16,532
7.1
%
Reconciliation of Operating Cash to Free Cash Flow
Three months ended June 30,
Six months ended June 30,
(in thousands)
2023
2022
2023
2022
Net cash used in operating activities
$
(16,374
)
$
(1,964
)
$
(65,048
)
$
(20,138
)
Capital expenditures
(3,297
)
(1,477
)
(6,137
)
(2,746
)
Free cash flow
$
(19,671
)
$
(3,441
)
$
(71,185
)
$
(22,884
)
Reconciliation of Debt to Net Debt
June 30,
December 31,
(in thousands)
2023
2022
Principal amount of debt
$
377,000
$
288,610
Debt issuance costs
(1,890
)
(2,310
)
Cash and cash equivalents
(4,163
)
(305
)
Net debt
$
370,947
$
285,995
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, July 27, 2023 at 8:30
A.M. EDT 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:
(877) 407-0789
International Live:
(201) 689-8562
Audio Webcast:
https://viavid.webcasts.com/starthere.jsp?ei=1622335&tp_key=2df7e1e91d
To listen to a replay of the teleconference through August 10,
2023:
Domestic Replay:
(844) 512-2921
International Replay:
(412) 317-6671
Replay PIN Number:
13739606
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 July 27, 2023
for more details on our second 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)
June 30,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
4,163
$
305
Receivables (net of allowance of $2.5
million and $2.0 million, respectively)
114,154
90,599
Unbilled receivables
6,229
7,409
Inventories
427,822
380,438
Other current assets
14,797
15,202
Current assets held-for-sale
107,059
54,925
Total current assets
674,224
548,878
Property and equipment (net of accumulated
depreciation of $33.6 million and $30.7 million, respectively)
43,992
40,501
Intangible assets (net of accumulated
amortization of $128.8 million and $121.3 million,
respectively)
82,818
86,558
Goodwill
222,023
217,262
Operating lease right-of-use asset
20,194
21,558
Other assets
30,220
29,019
Non-current assets held-for-sale
$
—
$
56,013
Total assets
$
1,073,471
$
999,789
Liabilities and Stockholders' equity
Current liabilities:
Current portion of long-term debt
$
10,000
$
10,000
Accounts payable
104,566
128,504
Accrued expenses and other current
liabilities
30,295
31,889
Dividends payable
1,290
1,282
Current liabilities held-for-sale
64,070
52,929
Total current liabilities
210,221
224,604
Long-term debt, less current portion
365,110
276,300
Deferred compensation
7,651
7,398
Long-term lease obligations under
operating leases
17,609
19,154
Deferred tax liabilities
3,743
4,986
Non-current liabilities held-for-sale
—
17,821
Total liabilities
604,334
550,263
Commitments and contingencies
Stockholders' equity:
Common stock, par value $0.05 per share,
authorized 23,000,000 shares; issued and outstanding 12,897,544 and
12,816,613, respectively
645
641
Additional paid-in capital
96,471
92,620
Retained earnings
366,690
351,297
Accumulated other comprehensive loss
5,331
4,968
Total stockholders' equity
469,137
449,526
Total liabilities and stockholders'
equity
$
1,073,471
$
999,789
VSE Corporation and
Subsidiaries
Unaudited Consolidated Statements of
Income
(in thousands except share and per share
amounts)
For the three months ended June
30,
For the six months ended June
30,
2023
2022
2023
2022
Revenues:
Products
$
165,997
$
142,003
$
320,443
$
278,172
Services
39,226
27,758
73,367
51,909
Total revenues
205,223
169,761
393,810
330,081
Costs and operating expenses:
Products
147,139
129,617
282,388
250,714
Services
32,327
25,120
62,903
47,525
Selling, general and administrative
expenses
1,519
473
3,564
1,180
Amortization of intangible assets
3,601
4,016
7,540
8,110
Total costs and operating expenses
184,586
159,226
356,395
307,529
Operating income
20,637
10,535
37,415
22,552
Interest expense, net
7,366
3,872
13,346
7,482
Income from continuing operations before
income taxes
13,271
6,663
24,069
15,070
Provision for income taxes
3,182
1,908
5,860
4,026
Income from continuing operations
$
10,089
$
4,755
$
18,209
$
11,044
(Loss) income from discontinued
operations, net of tax
$
(1,234
)
$
2,793
$
(237
)
$
2,748
Net income
$
8,855
$
7,548
$
17,972
$
13,792
Earnings (loss) per share:
Basic
Continuing operations
$
0.78
$
0.37
$
1.42
$
0.87
Discontinued operations
(0.10
)
0.22
(0.02
)
0.21
$
0.68
$
0.59
$
1.40
$
1.08
Diluted
Continuing operations
$
0.78
$
0.37
$
1.42
$
0.87
Discontinued operations
(0.10
)
0.22
(0.02
)
0.21
$
0.68
$
0.59
$
1.40
$
1.08
Weighted average shares outstanding:
Basic
12,886,100
12,778,355
12,865,394
12,760,026
Diluted
12,916,998
12,811,078
12,921,826
12,807,249
Dividends declared per share
$
0.10
$
0.10
$
0.20
$
0.20
VSE Corporation and
Subsidiaries
Unaudited Consolidated Statements of
Cash Flows
(in thousands)
For the six months ended June
30,
2023
2022
(a)
(a)
Cash flows from operating activities:
Net income
$
17,972
$
13,792
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
12,011
12,430
Amortization of debt issuance cost
420
420
Deferred taxes
(1,533
)
(790
)
Stock-based compensation
3,894
2,675
Provision for inventory
742
1,094
Changes in operating assets and
liabilities, net of impact of acquisitions:
Receivables, net
(21,082
)
(25,607
)
Unbilled Receivables, net
(110
)
(9,428
)
Inventories, net
(45,580
)
(16,145
)
Other current assets and other assets
(1,274
)
6,036
Operating lease assets and liabilities,
net
(67
)
(69
)
Accounts payable and deferred
compensation
(27,429
)
(4,848
)
Accrued expenses and other current and
noncurrent liabilities
(3,055
)
302
Net cash used in operating activities
(65,091
)
(20,138
)
Cash flows from investing activities:
Purchases of property and equipment
(6,137
)
(2,746
)
Proceeds from the payment on notes
receivable
1,557
3,073
Cash paid for acquisitions, net of cash
acquired
(11,711
)
—
Net cash (used in) provided by investing
activities
(16,291
)
327
Cash flows from financing activities:
Borrowings on loan agreement
322,813
236,194
Repayments on loan agreement
(234,423
)
(212,572
)
Proceeds from issuance of common stock
456
486
Earn-out obligation payments
—
(1,000
)
Payment of taxes for equity
transactions
(1,031
)
(892
)
Dividends paid
(2,571
)
(2,552
)
Net cash provided by financing
activities
85,244
19,664
Net increase (decrease) in cash and cash
equivalents
3,862
(147
)
Cash and cash equivalents, beginning of
period
478
518
Cash and cash equivalents, end of
period
$
4,340
$
371
(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/20230726028139/en/
Michael Perlman VP, Investor Relations & Communications T:
(954) 547-0480 investors@vsecorp.com
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