Workflow
VSE (VSEC) - 2024 Q2 - Quarterly Results
VSECVSE (VSEC)2024-07-31 22:25

Revenue Performance - Total revenues for Q2 2024 reached 266.0million,a29.6266.0 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,up13.6188,579,000, up 13.6% from 165,997,000 year-over-year[25] - Service revenues surged to 77,380,000,comparedto77,380,000, 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,a29.5265,959,000, a 29.5% increase from 205,223,000 in Q2 2023[25] Profitability Metrics - Adjusted EBITDA for the Aviation segment increased by 61% to 31.0million,withanadjustedEBITDAmarginof16.131.0 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 26,450inQ22023[14]−Operatingincomedecreasedto26,450 in Q2 2023[14] - Operating income decreased to 6,132,000, down 70.3% from 20,637,000year−over−year[25]−AdjustednetincomefromcontinuingoperationsforQ22024was20,637,000 year-over-year[25] - Adjusted net income from continuing operations for Q2 2024 was 11,034, a 4.5% increase from 10,558inQ22023[11]−AdjustedEPS(Diluted)decreasedto10,558 in Q2 2023[11] - Adjusted EPS (Diluted) decreased to 0.64 in Q2 2024 from 0.82inQ22023,representingadeclineof22.00.82 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)inQ22023,indicatingaworseningcashflowsituation[16]−Netdebtincreasedto(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 421,576attheendof2023[17]−Thenetleverageratioimprovedslightlyto3.5xasofJune30,2024,downfrom3.7xattheendof2023[18]−InterestexpenseforQ22024was421,576 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 7,366inQ22023[13]−Netcashusedinoperatingactivitiesforthefirsthalfof2024was7,366 in Q2 2023[13] - Net cash used in operating activities for the first half of 2024 was 96,588,000, compared to 65,091,000inthesameperiodlastyear[26]AssetandLiabilityChanges−Cashandcashequivalentsof65,091,000 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 7,768,000onDecember31,2023,indicatingasignificantincrease[24]−Receivablesincreasedto7,768,000 on December 31, 2023, indicating a significant increase[24] - Receivables increased to 168,238,000 from 127,958,000,reflectingagrowthofapproximately31.5127,958,000, reflecting a growth of approximately 31.5%[24] - Contract assets rose to 28,575,000 from 8,049,000,markinganincreaseofover2558,049,000, marking an increase of over 255%[24] - Inventories increased to 532,371,000 from 500,864,000,showingagrowthofabout6.3500,864,000, showing a growth of about 6.3%[24] - Total current assets amounted to 796,375,000, up from 774,030,000,representinganincreaseofapproximately2.0774,030,000, representing an increase of approximately 2.0%[24] - Current liabilities decreased to 225,646,000 from 286,886,000,areductionofabout21.4286,886,000, a reduction of about 21.4%[24] - Long-term debt, less current portion, increased to 433,508,000 from 406,844,000,reflectingariseofapproximately6.5406,844,000, reflecting a rise of approximately 6.5%[24] - Total assets grew to 1,494,298,000 from 1,350,338,000,indicatinganincreaseofabout10.61,350,338,000, indicating an increase of about 10.6%[24] - Stockholders' equity increased to 781,316,000 from 616,725,000,representingagrowthofapproximately26.7616,725,000, 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,up40.7259,827,000, up 40.7% from 184,586,000 in Q2 2023[25] - Net loss from continuing operations for Q2 2024 was (2,777),asignificantdeclineof127.5(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 1,689inQ22024from1,689 in Q2 2024 from 625 in Q2 2023[13] - Capital expenditures for Q2 2024 were (3,945),comparedto(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]