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 ...

Revenue Projections - Estimated consolidated revenue for Q3 2024 is projected to be between $268 million and $275 million, and for the nine months ended September 30, 2024, between $776 million and $783 million[5]. - Aviation segment revenue for Q3 2024 is expected to increase by 32-34% compared to the prior year period, while Fleet segment revenue is anticipated to decrease by 10-15%[5]. - Estimated operating income for Q3 2024 is projected to be between $22 million and $24 million, and for the nine months ended September 30, 2024, between $52 million and $54 million[5]. - Estimated Adjusted EBITDA for Q3 2024 is expected to be between $31 million and $34 million, and for the nine months ended September 30, 2024, between $95 million and $98 million[5]. - Adjusted EBITDA Margin for the Aviation segment in Q3 2024 is expected to be between 15.0% and 16.5%, while for the Fleet segment, it is expected to be between 4.5% and 6.0%[5]. - The company anticipates full-year growth in the Aviation segment to exceed previous guidance, while the Fleet segment is expected to decline year-over-year[5]. Debt and Cash Flow - Estimated Total Debt as of September 30, 2024, is approximately $453 million, with estimated Net Debt of approximately $442 million[5]. - The company expects to report positive free cash flow in Q3 2024, with an increase in free cash flow anticipated in Q4 2024[5]. Acquisitions - The company has signed a definitive agreement to acquire Kellstrom Aerospace Group, Inc.[15]. Risks - The company faces various risks including supply chain disruptions, competition, and integration challenges related to acquisitions[9].

VSE Corporation (VSEC) , a leader in aftermarket distribution and repair services, has announced its agreement to acquire Kellstrom Aerospace, a key player in the commercial aerospace engine aftermarket. The acquisition, valued at approximately $200 million, includes $185 million in cash and $15 million in VSE stock. The deal, expected to close in the fourth quarter of 2024, aligns with VSE's strategic plan to enhance its aviation segment by expanding its global reach and increasing exposure to the fast-gro ...

Monty Rakusen/DigitalVision via Getty Images Synopsis VSE Corporation (NASDAQ:VSEC) specialises in providing aftermarket distribution and maintenance, repair, and overhaul services for air and land transportation assets. For 2Q24, VSEC reported strong top-line growth of 29.6% year-over-year, driven mainly by strength in the aviation segment. Additionally, passenger air travel demand was robust and is expected to continue growing. Demand for aftermarket parts and maintenance services was strong, and the outl ...

Financial Data and Key Metrics Changes - VSE Corporation reported a revenue growth of 30% in Q2 2024, reaching $266 million, driven by a 55% increase in Aviation revenue, partially offset by a 9% decline in Fleet revenue [13][14] - Adjusted EBITDA increased by 18% to $31 million, with Aviation contributing an increase of $12 million, while Fleet saw a decline of $6 million [13][15] - Adjusted net income rose by 5% to $11 million, but adjusted diluted earnings per share decreased by 22% to $0.64 [13] Business Line Data and Key Metrics Changes - Aviation segment revenue reached a record $193 million, up 55% year-over-year, with Distribution and MRO businesses increasing by 32% and 112% respectively [14][15] - Fleet segment revenue declined by 9% to $73 million, primarily due to a 37% drop in USPS revenue, although commercial revenue increased by 22% [16][17] Market Data and Key Metrics Changes - Global airline passenger traffic is forecasted to be approximately 4% above 2019 levels, with continued annual increases expected over the next decade [5] - The business and general aviation market has stabilized post-pandemic, with business jet activity recovering to historically high levels [6] Company Strategy and Development Direction - The company is focusing on scaling its European distribution center in Hamburg and expanding its Pratt & Whitney Canada aftermarket program [6][8] - VSE is also enhancing its acquisition integration capabilities, particularly with the Desser acquisition, and is developing a new e-commerce site to support both VSE Aviation and legacy Desser customers [8][20] - The company is exploring strategic alternatives for its Fleet segment while managing temporary disruptions caused by USPS's transition to a new ERP system [9][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Aviation segment's performance despite potential risks from integration and market conditions, maintaining a full-year revenue growth guidance of 34% to 38% [15][19] - The company anticipates solid free cash flow generation in the second half of the year, improving net leverage and reducing debt [21][28] Other Important Information - The company completed a successful follow-on equity offering of 2.4 million shares at $71 per share, using proceeds to repay outstanding borrowings [10] - A $17 million restructuring charge was recorded in Q2 related to corporate restructuring initiatives [10] Q&A Session Summary Question: Aviation segment margin progression in the second half of the year - Management indicated that the guidance reflects a mix of acquisitions and operational activities, with TCI's lower margins impacting overall expectations [23][24] Question: Changes in airline customers' purchasing behavior - Management has not observed any changes in demand from airline customers despite potential softness in the market [25] Question: Free cash flow expectations for the second half of the year - Management expects to generate strong free cash flow in the second half, with more significant contributions anticipated in Q4 [26][28] Question: TCI revenue contribution expectations - TCI is expected to exceed initial revenue projections, with performance tracking above the high end of earlier estimates [30][31] Question: Market share gains in the Aviation segment - Management noted that market share gains are primarily coming from OEM partnerships rather than competitive battles [34] Question: USPS transition and revenue recovery - Management confirmed that USPS sites have not yet returned to pre-transition revenue levels, with a gradual recovery expected [38] Question: Integration of Desser and e-commerce site development - The integration of Desser is complex, involving multiple systems and processes, with a new e-commerce site set to launch in Q3 [41][47]

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 June 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 of In ...

Revenue Performance - Total revenues for Q2 2024 reached $266.0 million, a 29.6% increase compared to Q2 2023[1] - Aviation segment revenue grew 55% year-over-year to a record $192.8 million, driven by strong execution and contributions from recent acquisitions[4] - Product revenues increased to $188,579,000, up 13.6% from $165,997,000 year-over-year[25] - Service revenues surged to $77,380,000, compared to $39,226,000 in the same quarter last year, marking a 97.2% increase[25] - Total revenues for Q2 2024 reached $265,959,000, a 29.5% increase from $205,223,000 in Q2 2023[25] Profitability Metrics - Adjusted EBITDA for the Aviation segment increased by 61% to $31.0 million, with an adjusted EBITDA margin of 16.1%, up 70 basis points from the prior year[4] - Adjusted EBITDA for Q2 2024 was $31,312, an 18.4% increase compared to $26,450 in Q2 2023[14] - Operating income decreased to $6,132,000, down 70.3% from $20,637,000 year-over-year[25] - Adjusted net income from continuing operations for Q2 2024 was $11,034, a 4.5% increase from $10,558 in Q2 2023[11] - Adjusted EPS (Diluted) decreased to $0.64 in Q2 2024 from $0.82 in Q2 2023, representing a decline of 22.0%[11] Cash Flow and Debt Management - Free cash flow for Q2 2024 was $(21,473), compared to $(19,714) in Q2 2023, indicating a worsening cash flow situation[16] - Net debt increased to $444,515 as of June 30, 2024, up from $421,576 at the end of 2023[17] - The net leverage ratio improved slightly to 3.5x as of June 30, 2024, down from 3.7x at the end of 2023[18] - Interest expense for Q2 2024 was $9,826, a 33.4% increase from $7,366 in Q2 2023[13] - Net cash used in operating activities for the first half of 2024 was $96,588,000, compared to $65,091,000 in the same period last year[26] Asset and Liability Changes - Cash and cash equivalents of $18,993,000 as of June 30, 2024, compared to $7,768,000 on December 31, 2023, indicating a significant increase[24] - Receivables increased to $168,238,000 from $127,958,000, reflecting a growth of approximately 31.5%[24] - Contract assets rose to $28,575,000 from $8,049,000, marking an increase of over 255%[24] - Inventories increased to $532,371,000 from $500,864,000, showing a growth of about 6.3%[24] - Total current assets amounted to $796,375,000, up from $774,030,000, representing an increase of approximately 2.0%[24] - Current liabilities decreased to $225,646,000 from $286,886,000, a reduction of about 21.4%[24] - Long-term debt, less current portion, increased to $433,508,000 from $406,844,000, reflecting a rise of approximately 6.5%[24] - Total assets grew to $1,494,298,000 from $1,350,338,000, indicating an increase of about 10.6%[24] - Stockholders' equity increased to $781,316,000 from $616,725,000, representing a growth of approximately 26.7%[24] Strategic Initiatives - The company completed a follow-on equity offering in May 2024, raising approximately $162.0 million to reduce debt and support future acquisitions[4] - VSE is reaffirming full-year 2024 revenue growth guidance for the Aviation segment at 34% to 38% and Adjusted EBITDA margin guidance at 15.5% to 16.5%[7] - The Kansas facility expansion for the new OEM licensed manufacturing fuel control program is on track to be operational by the end of 2024[2] - The integration of Desser Aerospace is in process and expected to be completed within the next twelve months[2] - The company plans to relocate its corporate headquarters to one of its Aviation segment's operating facilities later in 2024[4] Cost and Expense Analysis - Total costs and operating expenses rose to $259,827,000, up 40.7% from $184,586,000 in Q2 2023[25] - Net loss from continuing operations for Q2 2024 was $(2,777), a significant decline of 127.5% from $10,089 in Q2 2023[13] - The company reported a significant increase in acquisition, integration, and restructuring costs, which rose by 170.2% to $1,689 in Q2 2024 from $625 in Q2 2023[13] - Capital expenditures for Q2 2024 were $(3,945), compared to $(3,297) in Q2 2023, reflecting increased investment[16] Regulatory and Reporting - The Company plans to file its Form 10-Q with the SEC on or about August 1, 2024, for further details on its financial results[22]

VSE Corporation (NASDAQ:VSEC) Q1 2024 Results Conference Call May 9, 2024 8:30 AM ET Company Participants Michael Perlman - Vice President, Investor Relations and Treasury John Cuomo - President & Chief Executive Officer Steve Griffin - Chief Financial Officer Tarang Sharma - Vice President, Controller and Head of Corporate Development Conference Call Participants Ken Herbert - RBC Capital Markets Jeff Van Sinderen - B. Riley Louie DiPalma - William Blair Josh Sullivan - The Benchmark Company Michael Ciarmo ...

Financial Performance - Total revenues for Q1 2024 were $241.5 million, a 28.1% increase from $188.6 million in Q1 2023[14] - Net income from continuing operations for Q1 2024 was $12.1 million, compared to $8.1 million in Q1 2023, reflecting a 49.1% increase[14] - The company reported a net loss of $6.6 million for Q1 2024, down from a net income of $9.1 million in Q1 2023[14] - Operating income for Q1 2024 was $24.2 million, up 44.1% from $16.8 million in Q1 2023[14] - Revenues for the three months ended March 31, 2024, increased by 28% to $241.5 million, driven by a $49.1 million increase in the Aviation segment and a $3.8 million increase in the Fleet segment[92] - The Aviation segment reported revenues of $162.4 million for the three months ended March 31, 2024, representing a 43% year-over-year increase, with repair revenue up 58% and distribution revenue up 38%[87] - The Fleet segment's revenues increased by 5% to $79.2 million, with commercial customer revenue growing by 37%, partially offset by a 19% decline in revenue from other government customers[100] - Operating income for the consolidated results increased by 44% to $24.2 million for the three months ended March 31, 2024, compared to $16.8 million in the prior year[92] Assets and Liabilities - Cash and cash equivalents increased to $10.6 million as of March 31, 2024, from $7.8 million at the end of 2023[13] - Total current assets decreased to $743.1 million as of March 31, 2024, from $774.0 million at the end of 2023[13] - The company’s long-term debt increased to $451.6 million as of March 31, 2024, compared to $406.8 million at the end of 2023[13] - The company’s total assets decreased to $1.34 billion as of March 31, 2024, from $1.35 billion at the end of 2023[13] - Long-term debt as of March 31, 2024, totaled $481.622 million, an increase from $429.344 million at the end of 2023, representing a 12.2% rise[57] Acquisitions and Impairments - The company completed the acquisition of Desser Aerospace for a preliminary cash consideration of $133.7 million, with a subsequent sale of part of its business for $31.8 million[33] - The acquisition of Precision Fuel Components, LLC was made for $11.7 million, with related acquisition expenses of $0.2 million incurred during the first quarter of 2023[29][30] - The company completed the acquisition of Turbine Controls, Inc. for approximately $120.0 million, consisting of $110.0 million in cash and $10.0 million in shares of common stock[78] - The acquisition of Honeywell Fuel Control Systems was completed for a purchase price of $105.0 million, funded by borrowings under the revolving credit facility[40] - The company experienced a significant impairment and loss on the sale of a business segment amounting to $16.9 million in Q1 2024[21] - The company recorded a pre-tax loss of $12.7 million on the sale of the Federal and Defense segment's operational assets, with transaction fees amounting to $2.5 million for the three months ended March 31, 2024[46] Cash Flow and Dividends - Cash used in operating activities increased by $30.4 million to $79.1 million for the three months ended March 31, 2024, primarily due to greater cash use for inventory purchases[106] - Cash provided by investing activities increased by $48.0 million for the three months ended March 31, 2024, compared to the same period of the prior year, primarily due to $41.1 million from the sale of the Federal and Defense segment[107] - Cash provided by financing activities decreased by $15.0 million for the three months ended March 31, 2024, mainly due to lower proceeds from net borrowings[108] - Cash dividends paid totaled $1.6 million or $0.10 per share during the three months ending March 31, 2024[109] - The company declared dividends of $0.10 per share for both Q1 2024 and Q1 2023[14] Shareholder Value and Strategic Alternatives - The company is exploring strategic alternatives for its Fleet segment to enhance shareholder value, which may include a potential sale[84] - The company has not purchased any of its equity securities during the period covered by this report[126] Tax and Accounting - The effective tax rate for continuing operations decreased to 19.3% for the three months ended March 31, 2024, compared to 24.8% for the same period in 2023, primarily due to excess stock compensation deductions[96] - There have been no significant changes in critical accounting estimates during the three months ended March 31, 2024[115] - The company continues to evaluate the need for additional internal controls over financial reporting following the acquisition[120] Market Risks - There have been no material changes to market risks from those discussed in the most recently filed Annual Report on Form 10-K[114] - The company has employed interest rate hedges to mitigate risks associated with future interest rate movements[113]

VSE Corporation Announces First Quarter 2024 Results Record Revenue and Profitability for Aviation Segment ALEXANDRIA, VIRGINIA, May 8, 2024 - VSE Corporation (NASDAQ: VSEC, "VSE", or the "Company"), a leading provider of aftermarket distribution and repair services, announced today results for the first quarter 2024. (As compared to the First Quarter 2023) From continuing operations 1 Non-GAAP measure. See additional information at the end of this release regarding non-GAAP financial measures 2 MANAGEMENT ...