VSE (VSEC)2024-07-31 22:25Revenue 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]