VSE (US:VSEC)2024-08-01 21:13Financial Performance - Total revenues for Q2 2024 reached $265.96 million, a 29.5% increase from $205.22 million in Q2 2023[10]. - Product revenues increased to $188.58 million, up 13.6% from $165.99 million year-over-year[10]. - Service revenues surged to $77.38 million, a 97.2% increase compared to $39.23 million in the same quarter last year[10]. - Operating income for Q2 2024 was $6.13 million, down 70.3% from $20.64 million in Q2 2023[10]. - Net loss for Q2 2024 was $2.78 million, compared to a net income of $8.86 million in Q2 2023[10]. - The company reported a loss from continuing operations of $2.8 million for the three months ended June 30, 2024, compared to income of $8.6 million for the same period in 2023[30]. - For the six months ended June 30, 2024, revenues were $133.885 million, a decrease from $134.506 million in the same period of 2023, representing a decline of approximately 0.5%[41]. - The total loss before income taxes for the six months ended June 30, 2024, was $25.228 million, compared to a loss of $621 thousand in the same period of 2023[41]. - For the six months ended June 30, 2024, operating income decreased to $8.8 million, down 36% from $13.8 million in the prior year[90]. Cash and Assets - Cash and cash equivalents increased to $18.99 million as of June 30, 2024, up from $7.77 million at the end of 2023[9]. - Total assets grew to $1.49 billion, an increase from $1.35 billion at the end of 2023[9]. - Current liabilities decreased to $225.65 million from $286.89 million at the end of 2023[9]. - Long-term debt increased to $433.51 million, up from $406.84 million at the end of 2023[9]. - VSE Corporation's total stockholders' equity increased to $781,316,000 as of June 30, 2024, up from $469,137,000 at the same time last year[13]. - The company reported a total of $93.002 million in assets held-for-sale as of June 30, 2024[43]. - The company’s billed and billable receivables increased to $168.238 million as of June 30, 2024, up from $127.958 million at the end of 2023[51]. - Contract assets, specifically unbilled receivables, rose to $28.575 million as of June 30, 2024, compared to $8.049 million at the end of 2023[51]. Dividends and Stock - The company declared dividends of $0.10 per share for both Q2 2024 and Q2 2023[10]. - The company declared dividends of $3,176,000 during the six months ended June 30, 2024, compared to $2,571,000 in the prior year[20]. - The company issued common stock amounting to $161,693,000 during the six months ended June 30, 2024, compared to $456,000 in the prior year[20]. - Basic earnings per share (EPS) for the three months ended June 30, 2024, was calculated using 17,152,661 shares, compared to 12,886,100 shares for the same period in 2023, indicating a significant increase in shares outstanding[55]. Acquisitions - The company completed the acquisition of Turbine Controls, LLC for a total consideration of $122.2 million, funded by borrowings under its revolving credit facility[26]. - The acquisition of Turbine Controls contributed $23.5 million in revenue and $1.8 million in operating income for the three months ended June 30, 2024[29]. - The acquisition of Desser Aerospace was completed for a cash consideration of $133.7 million, with a subsequent sale of certain businesses for $31.8 million[32]. - The company completed the acquisition of Honeywell Fuel Control Systems for a purchase price of $105.0 million, expanding distribution and MRO capabilities[36]. - The preliminary purchase price allocation for the Honeywell acquisition included $74.1 million in goodwill, with total assets acquired valued at $105.0 million[38]. Expenses and Liabilities - The company experienced a significant increase in depreciation and amortization expenses, totaling $12,868,000 for the six months ended June 30, 2024, compared to $12,011,000 in the prior year[20]. - The company recorded a pre-tax loss of $12.7 million on the sale of discontinued operations, along with transaction fees of $2.5 million during Q1 2024[40]. - The company recognized one-time lease abandonment costs of $12.9 million during Q2 2024, which included a reduction in operating lease right-of-use assets of $6.7 million and exit costs of $3.7 million[68]. - Interest expense increased by 33% in Q2 2024 compared to Q2 2023, primarily due to higher debt facility borrowings[83]. - The company reported a total of $292,500 thousand in term loan payments due by the end of 2026, with an additional $174,000 thousand in revolving facility payments, totaling $466,500 thousand[53]. Segment Performance - The Aviation segment generated net sales of $192,828 thousand for the three months ended June 30, 2024, compared to $124,729 thousand in the same period of 2023, representing a growth of approximately 54.7%[60]. - The Fleet segment reported net sales of $265,959 thousand for the three months ended June 30, 2024, up from $205,223 thousand in the same period of 2023, marking an increase of about 29.5%[60]. - Revenue for the Aviation segment reached $192.8 million in Q2 2024, a 55% increase year-over-year, driven by strong demand and contributions from recent acquisitions[76]. - The Fleet segment's revenue was negatively impacted by a decline in activity from the United States Postal Service, but commercial revenues accounted for 64% of total Fleet segment revenue in Q2 2024, up from 47% in the prior year[78]. - Revenues for the Fleet segment decreased by 9% to $73.1 million for the three months ended June 30, 2024, compared to $80.5 million for the same period in the prior year, primarily due to a decline in activity by other government customers[90].