VSE (VSEC) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenues for the three months ended September 30, 2024, increased to $273.6 million, up 18.3$231.4 million in the same period last year[10]. - Product revenues reached $188.3 million, a 2.0$184.7 million year-over-year, while service revenues surged 82.5% to $85.3 million from$46.7 million[10]. - Operating income for the three months was $23.7 million, a decrease of 6.3$25.3 million in the prior year[10]. - Net income from continuing operations was $11.7 million, down 3.8$12.1 million in the same quarter last year[10]. - Earnings per share for continuing operations were $0.63, compared to$0.81 in the same period last year, reflecting a 22.2% decline[10]. - Total costs and operating expenses increased to $249.9 million, up 21.3$206.1 million year-over-year[10]. - Comprehensive income for the quarter was $7.0 million, down from$11.2 million in the same period last year, primarily due to losses in other comprehensive income[11]. - Revenue for the nine months ended September 30, 2024, reached $781,111 thousand, compared to$625,163 thousand for the same period in 2023, reflecting a year-over-year increase of approximately 25%[52][55]. Assets and Liabilities - Total current assets increased to $775,297 thousand as of September 30, 2024, compared to$774,030 thousand as of December 31, 2023[9]. - Total assets reached $1,463,999 thousand, a growth from$1,350,338 thousand, showcasing overall financial strength[9]. - Current liabilities decreased to $210,107 thousand from$286,886 thousand, improving the company's liquidity position[9]. - Long-term debt increased to $420,341 thousand from$406,844 thousand, reflecting ongoing financing strategies[9]. - Stockholders' equity rose to $787,796 thousand, up from$616,725 thousand, indicating enhanced shareholder value[9]. - Cash and cash equivalents decreased to $7,907,000 at the end of the period from$20,829,000 at the beginning of the period[18]. - As of September 30, 2024, total debt was $450,341 thousand, an increase from$429,344 thousand as of December 31, 2023[57]. Acquisitions and Strategic Initiatives - The company has entered into an agreement to acquire Kellstrom Aerospace Group, Inc., which is expected to enhance operational capabilities[6]. - The acquisition of Turbine Controls, LLC was completed for a total consideration of $122.2 million, funded by borrowings under the revolving credit facility[25]. - The acquisition of Desser Aerospace was completed for$131.5 million, with a subsequent sale of its proprietary solutions business for $31.8 million[34]. - The Honeywell FCS Acquisition was completed for$105.0 million, funded by borrowings under the revolving credit facility[40]. - The company plans to focus on higher margin and higher growth aftermarket parts distribution and MRO businesses following the sale of its Federal and Defense segment[65]. Cash Flow and Financing Activities - The company reported net cash used in operating activities of $86,412,000 for the nine months ended September 30, 2024, compared to$49,771,000 for the same period in 2023, indicating a significant increase in cash outflow[18]. - Cash used in investing activities decreased by $140.4 million for the nine months ended September 30, 2024, mainly due to lower acquisition-related cash outflows compared to the previous year[120]. - Cash provided by financing activities decreased by$124.1 million for the nine months ended September 30, 2024, primarily due to lower net borrowings of $154.9 million[121]. - The company raised$163.8 million in net proceeds from a public offering of 1,982,757 shares at $87.00 per share[81]. - The company completed a public offering of 2,429,577 shares in May 2024, generating proceeds of$162.0 million, primarily used to repay outstanding borrowings[116]. Segment Performance - The Aviation segment generated $552,066 thousand in revenue for the nine months ended September 30, 2024, up from$494,606 thousand in the same period of 2023, reflecting a growth of about 11.6%[53]. - The Fleet segment reported revenue of $135,911 thousand for the nine months ended September 30, 2024, compared to$108,011 thousand in the prior year, marking an increase of approximately 25.8%[52]. - Aviation segment revenues increased by $51.3 million, or 34$12.6 million, or 5%, for the nine months ended September 30, 2024, primarily due to a decline in activity by other government customers[109]. Shareholder Returns - The company declared dividends of $0.10 per share for the quarter, consistent with the previous quarter[10]. - The company declared dividends of$0.30 per share, totaling $4,154,000 for the nine months ended September 30, 2023[16]. - The company paid cash dividends totaling$5.0 million or $0.30 per share during the nine months ending September 30, 2024[122].