Financial Performance - Total revenues for Q1 2025 reached $256.045 million, a 57.7% increase from $162.383 million in Q1 2024[16] - Operating income for Q1 2025 was $24.504 million, compared to $15.643 million in Q1 2024, reflecting a 56.6% increase[16] - Net income from continuing operations for Q1 2025 was $13.968 million, up from $5.542 million in Q1 2024, representing a 151.5% increase[16] - Earnings per share from continuing operations for Q1 2025 was $0.68, compared to $0.35 in Q1 2024, an increase of 94.3%[16] - Comprehensive loss for Q1 2025 was $10.427 million, compared to a comprehensive loss of $4.107 million in Q1 2024[19] - The Company reported quarterly revenue of $256.0 million for the three months ended March 31, 2025, representing a 58% increase year-over-year[77] - Repair revenue increased by $41.1 million, or 76%, while aviation distribution revenue rose by $52.5 million, or 49%, compared to the same period in the prior year[79] - Operating income increased for the three months ended March 31, 2025, primarily driven by revenue growth and a favorable shift in sales mix and pricing[83] Cash Flow and Liquidity - Cash flows used in operating activities for Q1 2025 were $46.632 million, an improvement from $79.060 million in Q1 2024[24] - The Company’s cash and cash equivalents at the end of Q1 2025 were $10.508 million, slightly down from $10.569 million at the end of Q1 2024[24] - Cash used in operating activities decreased by $32.4 million for the three months ended March 31, 2025, primarily due to an increase in net income from continuing operations and improved receivable collections[91] - Cash provided by financing activities decreased by $20.1 million for the three months ended March 31, 2025, primarily reflecting lower net borrowings under the Company's credit agreement[93] - The Company believes its cash on hand, operating cash flows, and available credit will provide sufficient liquidity for business operations over the next twelve months[88] Acquisitions and Investments - The company completed the acquisition of Turbine Controls, Inc. for a total consideration of $122.4 million, enhancing its MRO capabilities[33] - The acquisition of Kellstrom Aerospace was completed for approximately $188.9 million, funded by a public offering and revolving credit facility[36] - The adjusted preliminary purchase price allocation for Kellstrom Aerospace includes total assets acquired of $233,079 thousand and total liabilities assumed of $44,213 thousand[39] - Goodwill from the Kellstrom Aerospace acquisition was recorded at $96,024 thousand, reflecting strategic advantages in distribution and MRO capabilities[40] - The acquisition of Turbine Weld Industries, LLC was completed on May 1, 2025, for a total consideration of approximately $50 million in cash[72] Debt and Interest Expenses - As of March 31, 2025, total debt was $465,006 thousand, with a weighted average interest rate of 6.67%[49] - The Company had $270.0 million outstanding under the term loan and $197.0 million under the revolving facility as of March 31, 2025[87] - Interest expense decreased for the three months ended March 31, 2025, due to a decrease in the Company's debt facility borrowings and a lower average interest rate[84] - The Company’s interest expense, net, decreased by 14% to $7.9 million for the three months ended March 31, 2025[79] Segment Performance - The Company recorded a pre-tax loss of $12.7 million related to the sale of the Federal and Defense segment in Q1 2024[43] - The Fleet segment was sold for total consideration of up to $230 million, with a pre-tax impairment loss of $33.7 million recorded in Q1 2025[44] - For Q1 2025, the pro forma revenue for Kellstrom Aerospace and VSE Corporation was $256,045 thousand, up from $200,758 thousand in Q1 2024[41] Taxation - The effective tax rate for continuing operations was 15.7% for the three months ended March 31, 2025, compared to 14.1% for the same period in 2024[70] - The effective tax rate for continued operations was 15.7% for the three months ended March 31, 2025, compared to 14.1% for the same period in 2024[85] Other Financial Metrics - The Company incurred $1.6 million in acquisition-related expenses for the TCI acquisition during Q1 2024, included in selling, general and administrative expenses[35] - The Company incurred $0.5 million of acquisition-related expenses during the three months ended March 31, 2025[73] - Amortization of intangible assets related to acquisitions was $6.1 million for the three months ended March 31, 2025, compared to $3.4 million for the same period in the prior year[82] - Total assets as of March 31, 2025, were $1,732.98 million, a slight decrease from $1,742.63 million as of December 31, 2024[63] - Goodwill decreased to $423.576 million as of March 31, 2025, due to measurement period adjustments related to the Kellstrom Aerospace acquisition[64] - Cash dividends paid totaled $2.1 million or $0.10 per share during the three months ending March 31, 2025[94]
VSE (VSEC) - 2025 Q1 - Quarterly Report