VSE (VSEC) - 2023 Q4 - Annual Results

Financial Performance - Total revenues for Q4 2023 reached $235.3 million, a 37% increase compared to Q4 2022[3] - GAAP net income for Q4 2023 was $12.8 million, reflecting a 62% increase year-over-year[3] - Adjusted EBITDA for the full year 2023 was $113.8 million, a 45% increase compared to 2022[4] - Net income from continuing operations for Q4 2023 was $12,834,000, a 62.1% increase from $7,916,000 in Q4 2022[16] - Adjusted EBITDA for Q4 2023 reached $31,444,000, reflecting a 45.7% increase compared to $21,582,000 in Q4 2022[16] - Free cash flow for Q4 2023 was $20,071,000, compared to $8,461,000 in Q4 2022[18] Segment Performance - The Aviation segment generated record revenue of $153.7 million in Q4 2023, up 43% from the previous year[6] - The Fleet segment reported revenue of $81.6 million in Q4 2023, a 26% increase year-over-year, with commercial revenue growing 72%[7] - Operating income in the Aviation segment for Q4 2023 was $18,771,000, a 52.3% increase from $12,327,000 in Q4 2022[17] - Adjusted EBITDA for the Aviation segment in Q4 2023 was $23,921,000, a 51.9% increase from $15,751,000 in Q4 2022[17] - The Fleet segment's operating income for Q4 2023 was $8,973,000, a 59.5% increase from $5,625,000 in Q4 2022[17] Cash Flow and Debt - The company generated $43 million of operating cash flow and $30 million of free cash flow in the second half of 2023[2] - As of December 31, 2023, VSE had $216 million in cash and total net debt outstanding of $422 million[10] - Total net debt as of December 31, 2023, was $421,576,000, up from $285,995,000 in 2022[21] - The company reported a net leverage ratio of 3.7x for both 2023 and 2022[21] Capital Expenditures and Guidance - Capital expenditures for the year 2023 totaled $18,666,000, compared to $11,212,000 in 2022[18] - VSE's 2024 guidance includes a 24% to 28% revenue growth for the Aviation segment and a 13% to 17% growth for the Fleet segment[11] Acquisitions and Sales - VSE announced the acquisition of Turbine Controls, Inc. for approximately $120 million, expected to close in Q2 2024[8] - The company completed the sale of its Federal and Defense segment assets for $44 million, with associated one-time transaction expenses expected between $6 million and $8 million[8] Reporting and Compliance - The company plans to file its Form 10-K with the SEC on or about March 7, 2024, detailing its fourth quarter and full year 2023 results[28]