Revenue Segments - The Aviation segment accounted for 73% of consolidated revenues in 2024, down from 63% in 2023 and 61% in 2022[22]. - The Fleet segment represented 27% of consolidated revenues in 2024, compared to 37% in 2023 and 39% in 2022[23]. - The Aviation segment achieved record revenue of $786 million for the year ended December 31, 2024, representing a 45% year-over-year increase[114]. - Distribution revenue increased by 27% and repair revenue surged by 86% during the year ended December 31, 2024, compared to the prior year[114]. - The Fleet segment's commercial customer revenue grew by 18% in 2024, with commercial revenues accounting for 61% of total Fleet segment revenue compared to 48% in 2023[116]. - The United States Postal Service (USPS) revenue in 2024 decreased by 30% due to a transition to a new Fleet Management Information System, but maintenance activity began to improve in Q4 2024[116]. - Total revenues for 2024 reached $1,080,132, an increase of 25.6% compared to $860,488 in 2023[171]. - Product revenues increased to $776,676 in 2024, up 12.1% from $693,035 in 2023[171]. - Service revenues surged to $303,456, a significant increase of 81.1% from $167,453 in 2023[171]. Financial Performance - Revenues increased by $219.6 million, or 26%, in 2024 compared to 2023, driven by a $242.2 million increase in the Aviation segment, partially offset by a $22.6 million decline in the Fleet segment[117]. - Operating income for 2024 was $81,419, a decrease of 7.1% from $87,996 in 2023[171]. - Net income from continuing operations was $36,498, down 15.5% from $43,152 in 2023[171]. - The company reported a net income of $15,324 for 2024, a decline of 60.9% compared to $39,134 in 2023[174]. - Basic earnings per share from continuing operations decreased to $2.04 in 2024 from $3.05 in 2023[171]. - The effective tax rate for continued operations decreased to 21.5% in 2024 from 24.2% in 2023, primarily due to a favorable excess stock tax deduction[121]. Costs and Expenses - Costs and operating expenses rose by $226.2 million, or 29%, in 2024 compared to 2023, reflecting increased business activity and revenue generation[118]. - The company incurred total costs and operating expenses of $998,713 in 2024, up 29.2% from $772,492 in 2023[171]. - Interest expense increased by approximately $3.9 million, or 12%, in 2024, attributed to higher average debt facility borrowings[121]. Debt and Assets - The company had $430 million of total debt outstanding as of December 31, 2024, which may increase vulnerability to adverse economic conditions[75]. - As of December 31, 2024, goodwill and intangible assets accounted for 28% and 11% of total assets, respectively[59]. - Goodwill increased significantly to $491.5 million in 2024, compared to $351.8 million in 2023, reflecting a growth of about 40%[169]. - The total assets of the company reached $1.73 billion in 2024, up from $1.35 billion in 2023, marking an increase of approximately 28%[169]. - The current portion of long-term debt increased to $30.0 million in 2024 from $22.5 million in 2023, a rise of 33%[169]. - The company's cash and cash equivalents increased to $29.0 million in 2024, compared to $7.8 million in 2023, representing a growth of over 270%[169]. - Total stockholders' equity rose to $988.2 million in 2024, up from $616.7 million in 2023, indicating an increase of approximately 60%[169]. Strategic Initiatives - The company is focused on growth through acquisitions, seeking complementary assets to enhance its product offerings and market presence[54]. - The company completed the acquisition of Turbine Controls, Inc. in April 2024 and Kellstrom Aerospace Group, Inc. in December 2024, enhancing its position in the aftermarket services[108]. - The company initiated a public offering in May 2024, raising net proceeds of $162.0 million, and another offering in October 2024, raising $163.8 million, to support acquisitions and repay debt[110][111]. - The company plans to continue focusing on market expansion and new product development in the upcoming year[183]. Employee and Operational Insights - As of December 31, 2024, the company employed approximately 1,400 employees, with a focus on specialized experience in various fields[29]. - The company emphasizes a commitment to employee safety through a Health, Environmental and Safety Program, providing ongoing training[30]. - The company aims to attract and retain top talent by offering competitive compensation and comprehensive benefits[34]. - The company operates 33 locations with a total floor space of 1,928 thousand square feet as of December 31, 2024[86]. Risks and Challenges - Global economic conditions and geopolitical factors may adversely affect revenues, particularly in foreign markets[48]. - Supply chain disruptions could impact the company's ability to source products and services, potentially leading to increased costs[49]. - The company faces intense competition in the aviation and vehicle parts industries, with larger competitors posing significant challenges[50]. - Prolonged inflation could increase costs beyond recoverable price increases, adversely affecting profit margins[57]. - The company faces risks related to cybersecurity threats, which could disrupt operations and impact financial results[73]. - Legal and regulatory risks in the aviation industry could expose the company to potential liabilities[66]. - Environmental regulations may impose substantial future costs, affecting financial results[69]. - Market volatility may affect access to cost-effective funding sources, impacting operational capabilities[76]. - The company may experience difficulties in divesting certain businesses, which could disrupt operations and lead to financial losses[61]. - Adverse equity market conditions could lead to impairment of goodwill or intangible assets, affecting financial position[60]. Cash Flow and Financing - Cash used in operating activities increased by $9.2 million in 2024 compared to 2023, primarily due to the working capital impact of the FDS Sale[130]. - Cash provided by financing activities increased by $50.8 million in 2024, mainly due to a $196.0 million increase in proceeds from public offerings of common stock[132]. - The company had $194 million of unused commitments under the credit agreement as of December 31, 2024, indicating a stable financial condition[129]. Accounting and Valuation - The company recognizes revenues for the sale of aircraft parts at a point in time when control is transferred to the customer, typically upon shipment[201]. - The company allocates the purchase price of acquired entities to the underlying tangible and identifiable intangible assets based on their estimated fair values[212]. - The assessment of slow-moving inventory write-downs in the Aviation segment requires significant management judgment, impacting the valuation of inventory[164]. - The company recognizes purchased intangible assets at fair value on the acquisition date, with significant estimates and assumptions involved in determining fair values[146]. - The company assesses the adequacy of allowances for credit losses quarterly based on historical collectability and current market conditions[204].

Financial Data and Key Metrics Changes - VSE Corporation generated $299 million in revenue for Q4 2024, a 27% increase year-over-year, driven by a 48% increase in aviation revenue, partially offset by a 12% decline in fleet revenue [23] - For the full year 2024, consolidated revenue reached approximately $1.1 billion, up 26% compared to 2023, with adjusted EBITDA increasing 20% to $136 million [25][24] - Adjusted net income for 2024 increased 20% to $56 million, while adjusted diluted earnings per share declined 5% to $3.13 due to an increase in share count [25][26] Business Line Data and Key Metrics Changes - The Aviation segment reported record revenue of $786 million for 2024, a 45% increase year-over-year, with adjusted EBITDA rising 47% to $129 million [30][20] - The Fleet segment experienced a revenue decline of 12% to $72 million in Q4 2024, with a full year revenue of $294 million, driven by an 18% growth in commercial sales but offset by a 30% decline in USPS revenue [36][38] Market Data and Key Metrics Changes - The aviation aftermarket is expected to grow between 6.5% and 8% in 2025, with VSE anticipating commercial aftermarket growth for parts and services to range between 8% and 10% [11][32] - The business aviation sector is projected to see a steady or increasing flight hours for over 90% of operators in 2025 compared to 2024 [11] Company Strategy and Development Direction - VSE is committed to becoming a pure-play aviation aftermarket company, having divested its Federal & Defense Services segment and the Fleet segment [7][19] - The company plans to focus on organic growth, expanding market presence, and strengthening partnerships with customers and suppliers [44][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory for 2025 and 2026, citing a balanced growth across geographic sectors and market segments [64][117] - The company expects to capture synergies from recent acquisitions to support margin expansion and improve core Aviation segment margins through operational efficiencies [46][68] Other Important Information - VSE's acquisition of Kellstrom Aerospace and Turbine Controls is expected to enhance its capabilities in the commercial aviation aftermarket [13][14] - The company opened a new distribution Center of Excellence in Hamburg, Germany, to support its operations [16] Q&A Session Summary Question: What is the expected pace of growth between distribution and MRO? - Management indicated that growth is expected to be evenly split between distribution and MRO, with no heavy back-end loading anticipated [50][52] Question: What drove TCI's outperformance? - TCI's growth was attributed to capacity creation and strong collaboration with OEM partners, with expectations for continued growth [56][58] Question: How will cash flow be managed in 2025? - Management noted that 2024's inventory provisioning and the impact from the FDS transaction will not repeat in 2025, providing a tailwind for cash flow [73][76] Question: What are the expectations for margin improvement post-acquisition? - Management expects a 100 basis point improvement in pro forma margins year-on-year, with further clarity to be provided after the fleet transaction closes [88][90] Question: How does VSE view potential acquisitions in the market? - Management expressed confidence in their existing M&A pipeline and indicated they are open to larger deals if they fit strategically [95][102]

Financial Performance - Total revenues for Q4 2024 reached $299.0 million, a 27% increase compared to Q4 2023[3] - Full-year 2024 total revenues were $1,080.1 million, up 26% from 2023[3] - GAAP net income for Q4 2024 was $15.5 million, a 21% increase from Q4 2023[3] - Adjusted EBITDA for Q4 2024 was $39.5 million, reflecting a 26% increase year-over-year[3] - Net income from continuing operations for Q4 2024 was $15,525,000, a 21.0% increase from $12,834,000 in Q4 2023[17] - Adjusted EBITDA for Q4 2024 reached $39,513,000, up 25.7% from $31,444,000 in Q4 2023; for the full year, it increased by 19.7% to $136,294,000 from $113,833,000[19] - Free cash flow for Q4 2024 was $52,110,000, significantly higher than $20,071,000 in Q4 2023[20] Segment Performance - Aviation segment revenue increased 48% year-over-year to a record $227.4 million in Q4 2024[7] - The Fleet segment revenue decreased 12% year-over-year to $71.6 million in Q4 2024[8] - The Aviation segment's adjusted EBITDA for Q4 2024 was $37,274,000, a 55.8% increase compared to $23,921,000 in Q4 2023[19] - The Fleet segment's adjusted EBITDA decreased by 30.6% to $6,814,000 in Q4 2024 from $9,821,000 in Q4 2023[19] - Operating income for the Aviation segment increased by 55.4% to $29,173,000 in Q4 2024, compared to $18,771,000 in Q4 2023[18] Cash Flow and Debt - The company generated $55 million in operating cash flow and $52 million in free cash flow in Q4 2024[4] - Net debt as of December 31, 2024, was $401,143,000, a decrease from $421,576,000 in 2023[22] - The net leverage ratio improved to 2.9x in 2024 from 3.7x in 2023[22] - Interest expense decreased by 25.2% to $6,943,000 in Q4 2024 from $9,278,000 in Q4 2023[17] - Capital expenditures for Q4 2024 were $3,265,000, down from $7,871,000 in Q4 2023[20] Strategic Actions - VSE completed the acquisition of Kellstrom Aerospace in December 2024 and Turbine Controls in April 2024[9] - The company announced the sale of its Fleet business segment for up to $230 million, expected to close in Q2 2025[5] - The company expects 35% to 40% revenue growth in the Aviation segment for full-year 2025[12] Risks and Challenges - The company faces risks related to supply chain delays and disruptions, which may materially affect actual results[34] - There are challenges in integrating recently acquired businesses and successfully divesting others, impacting overall performance[34] - The company is exposed to intense competition within the industry, which could affect market share and profitability[34] - Global economic and political conditions, along with prolonged inflation, pose significant risks to future business operations[34] - Workforce management challenges and the ability to attract and retain skilled employees are critical for operational success[34] - Compliance with government regulations, including environmental and pollution risks, remains a priority for the company[34] - Technology security and cyber-attack risks are ongoing concerns that could impact business continuity[34] - The company has outstanding indebtedness, which presents financial risks in volatile market conditions[34] - Market volatility in debt and equity capital markets could affect the company's financial stability and investment strategies[34] - The company does not undertake any obligation to update or revise forward-looking statements, reflecting management's analysis as of the date of the report[34]

Shares of VSE (VSEC) have gained 0.5% over the past four weeks to close the last trading session at $100.90, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $126.20 indicates a potential upside of 25.1%.The mean estimate comprises five short-term price targets with a standard deviation of $14.86. While the lowest estimate of $100 indicates a 0.9% decline from the current price l ...

Core Viewpoint - VSE (VSEC) shares have increased by 3.6% over the past four weeks, closing at $100.26, with a mean price target of $126.20 indicating a potential upside of 25.9% according to Wall Street analysts [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $14.86, where the lowest estimate is $100 (0.3% decline) and the highest is $135 (34.7% increase) [2] - A low standard deviation suggests a strong agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [7] Earnings Estimates and Analyst Optimism - Analysts show strong agreement in revising VSEC's earnings estimates higher, which correlates with potential stock price increases [9] - The Zacks Consensus Estimate for the current year has risen by 0.8% over the past month, with two estimates increasing and no negative revisions [10] Zacks Rank and Investment Potential - VSEC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating a strong potential upside [11] Caution on Price Targets - While price targets are often sought after, they can mislead investors, and decisions should not be made solely based on them [5][8]

VSE Corporation (VSEC) , a leader in aftermarket distribution and repair services, has completed the acquisition of Kellstrom Aerospace Group, Inc. The transaction strengthens VSEC's position in the commercial aerospace engine aftermarket.This acquisition was valued at around $185 million in cash and 172,414 common shares of VSEC. The purchase was funded through proceeds from a public offering and borrowings under VSEC's existing credit facility.VSE Strengthens Aviation With Kellstrom AcquisitionThis acquis ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from _____ to _____ Commission File Number: 000-03676 VSE CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 54-0649263 (State or Other Jurisdiction ...

VSE Corporation (NASDAQ:VSEC) Q3 2024 Earnings Conference Call November 6, 2024 8:30 AM ET Company Participants Michael Perlman - Vice President, Investor Relations & Treasury John Cuomo - President & Chief Executive Officer Adam Cohn - Chief Financial Officer Conference Call Participants Sheila Kahyaoglu - Jefferies Ken Herbert - RBC Capital Markets Michael Ciarmoli - Truist Jeff Van Sinderen - B. Riley Securities Noah Levitz - William Blair Josh Sullivan - Benchmark Operator Good day and welcome to the VS ...

Third Quarter 2024 Results Conference Call November 6, 2024 vsecorp.com Introduction Forward-Looking Statements These statements speak only as of the date of this presentation and the Company undertakes no ongoing obligation, other than that imposed by law, to update these statements. These statements appear in a number of places in this presentation, and relate to, among other things, the Company's intent, belief or current expectations with respect to: its future financial condition, results of operations ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each classTrading Symbol(s)Name of each exchange on which registered Common Stock, par value $.05 per share VSEC The NASDAQ Global Select Market FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 15, 2024 VSE CORPORATION (Exact name of registrant as specified in its charter) Delaware 000-03676 54-0649263 (State or Other Jurisdi ...