VSE (US:VSEC)2025-10-27 20:08Financial Performance - Total revenues for Q3 2025 reached $282.9 million, an increase of 38.9% compared to Q3 2024[3] - Adjusted EBITDA for Q3 2025 was $47.4 million, reflecting a 58.4% increase year-over-year[3] - The adjusted net income for Q3 2025 was $20.5 million, up 110.5% from the previous year[3] - Operating income for Q3 2025 was $10.1 million, a decrease of 49.7% compared to Q3 2024[9] - The adjusted EPS (diluted) for Q3 2025 was $0.99, an increase of 86.8% from the prior year[3] - Total revenues for Q3 2025 reached $282.9 million, a 39% increase from $203.6 million in Q3 2024[35] - Product revenues increased to $176.0 million, up 49% from $118.4 million year-over-year[35] - Service revenues rose to $106.9 million, a 25% increase compared to $85.3 million in the same period last year[35] - Operating income for the nine months ended September 30, 2025, was $57.1 million, compared to $38.3 million for the same period in 2024, reflecting a 49% increase[35] - Net income from continuing operations for the nine months ended September 30, 2025, was $31.2 million, significantly higher than $9.0 million in 2024[35] - The company reported a net loss of $1.9 million for the nine months ended September 30, 2025, compared to a net income of $2.3 million in 2024[36] Cash Flow and Leverage - The company generated $24.1 million in operating cash flow and $18.0 million in free cash flow during Q3 2025, representing significant year-over-year improvements[6] - Free cash flow for Q3 2025 was $18,040,000, significantly up from $4,411,000 in Q3 2024[19] - As of September 30, 2025, the adjusted net leverage ratio was approximately 2.0x, indicating a strong balance sheet position[6] - Net debt decreased to $347,312,000 as of September 30, 2025, down from $401,143,000 at the end of 2024[21] - The net leverage ratio improved to 2.1x as of September 30, 2025, compared to 2.9x at the end of 2024[22] - Cash flows from operating activities showed a net cash used of $10.7 million for the nine months ended September 30, 2025, compared to $86.4 million in 2024[36] - The company generated $76.6 million in net cash from investing activities in 2025, contrasting with a net cash used of $87.5 million in 2024[36] - Borrowings on bank credit facilities amounted to $648.1 million, with repayments totaling $720.8 million during the nine months ended September 30, 2025[36] - Cash and cash equivalents at the end of the period were $8.8 million, down from $29.0 million at the beginning of the period[36] Segment Performance - The aviation segment revenue increased by 38.9% year-over-year, driven by strong execution of distribution programs and expanded MRO capacity[4] - Aviation segment operating income increased to $38,240,000 in Q3 2025, a 50.3% increase from $25,435,000 in Q3 2024[18] - Adjusted EBITDA for the Aviation segment rose to $50,356,000 in Q3 2025, reflecting a 51.2% increase compared to $33,300,000 in Q3 2024[18] - The adjusted EBITDA margin for the aviation segment is now expected to be between 17.0% to 17.25%, increased from prior guidance of 16.5% to 17%[8] Guidance and Future Plans - The company raised its full-year 2025 revenue growth guidance to 38% to 40%, up from the previous guidance of 35% to 40%[8] - The company plans to hold a conference call on October 27, 2025, to discuss financial results and recent events[28] Costs and Expenditures - The company reported a significant increase in unallocated corporate costs, which rose to $28,153,000 in Q3 2025, a 424.9% increase from $5,363,000 in Q3 2024[18] - Capital expenditures for the nine months ended September 30, 2025, were $14,513,000, down from $17,439,000 in the same period of 2024[19] Assets and Liabilities - Total current assets decreased to $722,280,000 as of September 30, 2025, from $965,347,000 at the end of 2024[34] - Current liabilities reduced to $183,351,000 as of September 30, 2025, down from $298,500,000 at the end of 2024[34]