Financial Data and Key Metrics Changes - VSE Corporation generated $299 million in revenue for Q4 2024, a 27% increase year-over-year, driven by a 48% increase in aviation revenue, partially offset by a 12% decline in fleet revenue [23][24] - Adjusted EBITDA for Q4 increased 26% to $40 million, with adjusted net income at $18 million and adjusted diluted earnings per share at $0.90 [23][24] - For the full year 2024, consolidated revenue reached approximately $1.1 billion, up 26% from 2023, with adjusted EBITDA increasing 20% to $136 million [24][25] Business Line Data and Key Metrics Changes - The Aviation segment reported record revenue of $786 million for 2024, a 45% increase year-over-year, with adjusted EBITDA rising 47% to $129 million [30][31] - The Fleet segment experienced a revenue decline of 30% from the USPS program, but commercial sales grew by 18% [38][39] - Aviation revenue in Q4 was $227 million, with distribution and MRO businesses increasing by 32% and 87% respectively [26][27] Market Data and Key Metrics Changes - The aviation aftermarket is expected to grow between 6.5% and 8% in 2025, with commercial aftermarket growth anticipated at 8% to 10% [11][32] - Business aviation is projected to see a growth of 5% to 6% in 2025, supported by increased flight hours and new market entrants [11][12] Company Strategy and Development Direction - VSE is transitioning to a pure-play aviation aftermarket company, having divested its Federal & Defense Services segment and Fleet segment [7][19] - The company aims to drive organic growth, expand market presence, and strengthen partnerships with customers and suppliers [41][45] - Integration of recent acquisitions, including Kellstrom Aerospace and Turbine Controls, is a priority to enhance operational efficiencies and customer value [14][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the aviation market's growth trajectory, driven by increased global passenger traffic and demand for maintenance services [10][11] - The company anticipates continued improvement in USPS revenue and overall fleet segment performance in 2025 [21][39] - Management highlighted a balanced growth across geographic sectors and market segments, indicating a robust operational position [64][66] Other Important Information - The sale of the Fleet segment is valued at up to $230 million, with expected closure in Q2 2025 [8][19] - The company relocated its corporate headquarters to South Florida to enhance collaboration and reduce overhead costs [19] Q&A Session Summary Question: What is the expected pace of growth between distribution and MRO? - Management indicated that growth is expected to be evenly split between distribution and MRO, with no significant back-end loading anticipated [50][52] Question: What drove TCI's outperformance? - TCI's growth was attributed to capacity creation and strong OEM partnerships, with expectations for continued growth [56][58] Question: How will cash flow be managed in 2025? - Management noted that 2025 will benefit from the absence of significant provisioning seen in 2024, leading to improved cash flow [73][76] Question: What are the expectations for margin improvement post-acquisition? - Management expects margin improvement to be realized throughout 2025, with synergies from recent acquisitions contributing to this [68][90] Question: What are the remaining hurdles to close the fleet sale? - The company anticipates normal HSR review processes to conclude in March, with light closing conditions expected [106]