(NASDAQ: VSEC), a leading provider of aviation aftermarket distribution and repair services, announced today that VSE Corporation's senior management will participate in the following upcoming conference. Baird 2025 Global Industrials Conference will be held in Chicago, IL, on November 11, 2025. John Cuomo, President and Chief Executive Officer of VSE Corporation, is scheduled to present at 9:05 AM Central Time. Management. MIRAMAR, Fla.--(BUSINESS WIRE)--VSE Corporation ("VSE†or the "Company†) ...

Core Viewpoint - VSE Corporation has priced its public offering of common stock, aiming to raise approximately $384 million to fund its acquisition of Aero 3 and support future strategic acquisitions [1][2]. Group 1: Offering Details - VSE Corporation is offering 2,352,941 shares of common stock at a price of $170.00 per share [1]. - The underwriters have a 30-day option to purchase an additional 352,941 shares [1]. - The offering is expected to close on October 29, 2025, pending customary closing conditions [1]. Group 2: Use of Proceeds - The net proceeds from the offering are expected to be approximately $384 million after deducting underwriting discounts and commissions [2]. - VSE intends to use the proceeds to fund the cash consideration for the acquisition of Aero 3, support potential future strategic acquisitions, and for general corporate purposes [2]. Group 3: Underwriters - Jefferies and Morgan Stanley are acting as joint lead book-running managers for the offering [3]. - RBC Capital Markets and William Blair are serving as joint book-runners, while Truist Securities, B. Riley Securities, and Stifel are additional book-runners [3]. - KeyBanc Capital Markets, Benchmark, a StoneX Company, and Jones are co-managers for the offering [3]. Group 4: Company Overview - VSE Corporation is a leading provider of aviation aftermarket distribution and repair services, focused on enhancing the productivity and longevity of high-value assets [6]. - The company is headquartered in Miramar, Florida, and supports engine component and airframe accessory part distribution and repair services for commercial and business aviation operators [6].

Third Quarter 2025 Results Conference Call October 27, 2025 vsecorp.com Introduction Forward-Looking Statements This presentation contains statements that, to the extent they are not recitations of historical fact, constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act. All such statements are intended to be covered by the safe harbor provisions for forward-looking statements contained in ...

Financial Data and Key Metrics Changes - Total adjusted sales grew 13% to $740 million year over year, with organic sales growth at 17% when excluding landing gear sales from the previous year [9][10] - Adjusted EBITDA increased 18% to $86.7 million, with adjusted EBITDA margins rising to 11.7% from 11.3% [9] - Adjusted diluted EPS increased by 27% to $1.08 from $0.85 in the same quarter last year [10] Business Line Data and Key Metrics Changes - Parts supply sales grew 27% to $318 million, with adjusted EBITDA of $43.8 million, up 34%, and adjusted EBITDA margin increasing to 13.8% from 13.1% [10][11] - Repair and engineering sales decreased 1% to $215 million, but organic sales growth was 8% when excluding landing gear divestiture, with adjusted EBITDA of $28.1 million, up 1% [11][12] - Integrated solutions sales increased by 10% year over year to $185 million, with adjusted EBITDA of $14.2 million, up 5% [12] Market Data and Key Metrics Changes - Adjusted sales growth to government customers increased 21%, while adjusted organic sales to commercial customers increased 15% [9] - Total commercial sales accounted for 71% of total sales, with government sales making up the remaining 29% [9] Company Strategy and Development Direction - The company is focused on driving growth through market share capture and new business, improving margins through cost efficiency, and increasing intellectual property through software investments [5][15] - The acquisition of Aerostrat is expected to enhance software capabilities and expand the reach of Trax software solutions [8][14] - The company aims to continue strengthening its offerings with targeted acquisitions to accelerate its strategy [15][16] Management's Comments on Operating Environment and Future Outlook - Management expects sales growth of 7% to 10% for Q2, with organic sales growth approaching 10% for the full fiscal year [15] - The company is encouraged by the additional assets coming to market, which is expected to drive growth in the USM business [31] - Management highlighted the importance of maintaining cash positivity while investing in inventory to support growth [37] Other Important Information - The company invested over $50 million in inventory to support future growth, particularly in parts supply [14] - Net debt leverage increased slightly from 2.72 times to 2.82 times due to organic and inorganic investments [13] Q&A Session Summary Question: What is behind the slight uptick in full-year expectations? - Management indicated that parts supply is leading the way with a strong quarter showing 27% organic growth [18] Question: Can you comment on the pipeline for new distribution agreements? - Management noted that the majority of recent wins have been from taking market share, with a different exclusive distribution model resonating well [19][20] Question: Do you expect to outgrow the market within distribution? - Management confirmed the expectation to maintain growth above market rates in distribution [24] Question: What are the cross-selling opportunities within repair and engineering? - Management stated that they are in the early stages of executing a cross-selling strategy, with a long pipeline of opportunities [26] Question: Has the trend in USM sales continued into the current quarter? - Management confirmed a meaningful growth in USM business, driven by a loosening supply of assets [31] Question: What is the margin opportunity for parts supply with more USM available? - Management indicated that while USM margins have been depressed, they expect margins to expand as more supply comes to market [32] Question: Is there an agreement with Aerostrat employees to retain key personnel? - Management confirmed an earnout agreement for key team members to incentivize retention [33] Question: What is the company's exposure to engine-related aftermarket services? - Management highlighted significant exposure, with 80% of USM parts being engine-related [41] Question: How far along is Trax in becoming a digital marketplace? - Management stated that they are actively investing in making Trax a digital marketplace, with announcements expected in the first half of 2026 [45]

Financial Data and Key Metrics Changes - Total adjusted sales grew 13% to $740 million year over year, with organic sales growth at 17% when excluding landing gear sales from the previous year [10][11] - Adjusted EBITDA increased 18% to $86.7 million, with adjusted EBITDA margins rising to 11.7% from 11.3% [10] - Adjusted diluted EPS increased by 27% to $1.08 from $0.85 in the same quarter last year [11] Business Line Data and Key Metrics Changes - Parts supply sales grew 27% to $318 million, with adjusted EBITDA of $43.8 million, up 34%, and adjusted EBITDA margin increasing to 13.8% from 13.1% [11][12] - Repair and engineering sales decreased 1% to $215 million, but organic sales growth was 8% when excluding landing gear divestiture, with adjusted EBITDA of $28.1 million, up 1% [12] - Integrated solutions sales increased by 10% year over year to $185 million, with adjusted EBITDA of $14.2 million, up 5% [13] Market Data and Key Metrics Changes - Adjusted sales growth to government customers increased 21%, while adjusted organic sales to commercial customers increased 15% [10] - Total commercial sales accounted for 71% of total sales, with government sales making up the remaining 29% [10] Company Strategy and Development Direction - The company is focused on driving growth through market share capture and new business, improving margins through cost efficiency, and increasing intellectual property through software investments [6][16] - The acquisition of Aerostrat is expected to enhance software capabilities and expand the reach of Trax software solutions [9][15] - The company aims to strengthen its offerings with targeted acquisitions to accelerate its strategy [16][17] Management's Comments on Operating Environment and Future Outlook - Management expects sales growth of 7% to 10% for Q2, with full fiscal year organic sales growth approaching 10% [16] - The company is well positioned in attractive segments of the growing aviation aftermarket, with unique distribution and repair capabilities [16] Other Important Information - The company invested over $50 million in inventory to support future growth, particularly in parts supply [15][37] - Net debt leverage increased slightly from 2.72 times to 2.82 times due to organic and inorganic investments [14] Q&A Session Summary Question: What is behind the slight uptick in full-year expectations? - Management indicated that parts supply is leading the way with a strong quarter showing 27% organic growth [19] Question: Can you comment on the pipeline for new distribution agreements? - The majority of recent wins have been from taking market share, with a different exclusive distribution model resonating well with OEMs [20][21] Question: Do you still expect to outgrow the market within distribution? - Management confirmed the expectation to maintain growth above market rates in distribution [25] Question: Can you discuss cross-selling opportunities within repair and engineering? - Management noted they are in the early stages of executing a cross-selling strategy, with a long pipeline of opportunities [26][28] Question: Has the trend in USM sales continued into the current quarter? - Management observed a meaningful growth in USM business, driven by a loosening supply of assets [31] Question: What is the margin opportunity for parts supply if more USM comes available? - Management expects margins to expand as more supply comes onto the market, although current margins are tighter than historical levels [32] Question: Is there an agreement with Aerostrat employees to ensure retention? - There is a three-year earnout associated with the acquisition to incentivize key team members to stay [33] Question: What is the company's exposure to engine-related aftermarket services? - Management stated that 80% of USM parts business is engine-related, indicating significant exposure in this area [41] Question: How far along is Trax in becoming a digital marketplace? - Management is actively investing in making Trax a digital marketplace, with expected announcements in the first half of 2026 [45]

Financial Performance - VSE achieved record revenue of $272 million in Q2 2025, a 41% increase year-over-year, driven by strong performance in aviation distribution and MRO businesses [17][21] - Adjusted EBITDA rose 52% to $43 million, with an adjusted EBITDA margin of 16%, reflecting a 110 basis point improvement from the previous year [21][17] - Adjusted net income increased by 149% to $20 million, with adjusted diluted earnings per share rising to $0.97, a 106% increase [21][19] Business Segment Performance - The Aviation segment generated $272 million in revenue, a 41% increase, with distribution revenue up 50% and MRO revenue up 27% [22][21] - Organic revenue growth in the Aviation segment was approximately 13% when excluding recent acquisitions [22] - Adjusted EBITDA for the Aviation segment increased by 48% to $47 million, representing 17.1% of revenue, driven by favorable pricing and product mix [23][21] Market Environment - The second quarter began with softness in the aftermarket due to tariff uncertainties, but activity rebounded in May and June [15] - The aviation aftermarket, particularly in the engine segment, is expected to remain strong, with engine-related MRO and distribution revenue accounting for over 50% of total aviation revenue [16][17] Company Strategy and Industry Competition - VSE completed the sale of its fleet segment, focusing on higher growth and higher margin distribution and MRO services within the aviation aftermarket [7][6] - The company is prioritizing integration of recent acquisitions to unlock efficiencies and enhance customer value, with a focus on capturing synergies [29][30] - VSE is expanding repair capabilities and increasing capacity across operations to meet strong demand [28][30] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in continued strength in the aviation aftermarket, particularly in the engine segment, and highlighted targeted investments to capitalize on growth [16][28] - The company reaffirmed its full-year 2025 Aviation segment revenue growth guidance of 35% to 40% and raised adjusted EBITDA margin guidance to 16.5% to 17% [24][25] Other Important Information - VSE secured a new $700 million credit facility, providing financial flexibility to support growth initiatives [9] - The company generated approximately $6 million in free cash flow during the quarter, an improvement of $28 million year-over-year [26][27] Q&A Session Summary Question: Can you discuss organic growth expectations for the second half of the year? - Management indicated that organic growth is expected to continue, with engine markets outperforming component markets, particularly in commercial aviation [35][36] Question: What are the synergies expected from recent acquisitions? - Management noted that significant cost synergies have already been captured, with ongoing opportunities for margin expansion as integrations progress [68][70] Question: How sustainable is the free cash flow generation? - Management highlighted a strong cash generation in the first half and anticipated continued improvement in free cash flow in the second half, driven by better working capital management [44][45] Question: What is the outlook for the Honeywell fuel control program? - Management stated that the program is performing well, but further growth opportunities will be evaluated after achieving full implementation [72][73] Question: What is the strategy for the USM business moving forward? - The company plans to shift the USM business towards a used and repair model, focusing on margin expansion rather than transactional parts trading [46][50]

Financial Performance - VSE achieved record revenue of $272 million in Q2 2025, a 41% increase year-over-year, driven by strong performance in aviation distribution and MRO businesses [16][18] - Adjusted EBITDA increased by 52% to $43 million, with an adjusted EBITDA margin of 16%, reflecting a 110 basis point improvement from the prior year [16][18] - Adjusted net income reached $20 million, with adjusted net income per diluted share of $0.97, marking increases of 149% and 106% respectively [16][19] Business Segment Performance - Aviation segment revenue also increased by 41% to $272 million, with distribution revenue up 50% and MRO revenue up 27% [20] - Organic revenue growth in the aviation segment was approximately 13% when excluding recent acquisitions [20] - The company is focusing on higher margin product lines, leading to a reduction in less profitable used serviceable material (USM) revenue by about 20% on a run rate basis [11][20] Market Environment - The aviation aftermarket showed resilience, with a rebound in activity in May and June after initial softness due to tariff uncertainties [15] - Engine-related MRO and distribution revenue now represents over 50% of total aviation revenue, indicating strong demand in this segment [15] Company Strategy and Development Direction - VSE completed the sale of its fleet segment, transitioning to a pure play aviation aftermarket company, and is now focused on higher growth and higher margin opportunities [6][25] - The company is prioritizing integration of recent acquisitions, including Turbine Weld and Kaelstrom, to unlock efficiencies and enhance customer value [26] - VSE is also capturing cost synergies from acquisitions, with $4 million in identified cost savings already being realized [12][26] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in continued strength in the aviation aftermarket, particularly in the engine segment, and anticipates revenue growth of 35% to 40% for the full year 2025 [22][15] - The company is raising its full-year adjusted EBITDA margin guidance to 16.5% to 17%, reflecting a higher margin product mix [22] Other Important Information - VSE secured a new $700 million credit facility, providing financial flexibility to support growth initiatives [7] - The company generated approximately $6 million in free cash flow during the quarter, an improvement of about $28 million compared to the previous year [24] Q&A Session Summary Question: Can you discuss organic growth expectations for the second half of the year? - Management indicated that organic growth is expected to be in the low to mid-teens, with engine markets outperforming component markets [32][34] Question: What are the synergies from recent acquisitions? - Management noted that synergies from Kaelstrom are being realized ahead of schedule, contributing to strong margins [36][62] Question: How sustainable is the free cash flow generation? - Management expects strong improvement in free cash flow in the second half of the year, driven by better working capital management [42] Question: What is the strategy for the USM business? - The company is shifting the USM business to focus on higher margin product lines and integrating it with repair capabilities [45][84] Question: What are the opportunities in the hydraulics market? - Management sees potential in the hydraulics market, emphasizing faster turnaround times and quality in supporting OEM authorized work [73] Question: What is the outlook for engine aftermarket demand? - Management believes that engine aftermarket demand will continue to outpace component demand in the near to mid-term due to supply chain constraints [77]

Financial Performance Highlights - Second quarter 2025 revenue reached $272 million, a 41% increase driven by growth in Aviation distribution and MRO businesses, as well as contributions from recent acquisitions[11] - Adjusted EBITDA for the second quarter 2025 was $43 million, representing 16% of revenue, a 52% increase due to distribution program execution, increased MRO activity, strong OEM licensed manufacturing program performance, and acquisitions[11] - Adjusted Net Income for the second quarter 2025 was $20 million, and Adjusted diluted earnings per share was $0.97, representing increases of 149% and 106% respectively[11] Business Developments - The company completed the sale of the Fleet segment, repositioning itself as a pure-play Aviation Aftermarket business[6] - Turbine Weld Industries ("Turbine Weld") was acquired, expanding MRO engine component capabilities[6] - A new 5-year authorized services center agreement was signed with Eaton to support aftermarket MRO for Eaton hydraulics across the Americas[6] Balance Sheet and Capital Structure - Adjusted Net Leverage was 2.2x, including the Fleet sale and acquisition of Turbine Weld[11, 23] - Net Debt outstanding was $362 million, while cash and revolver availability was $333 million[23] - Second quarter 2025 Free Cash Flow was $6 million, driven by disciplined working capital management and record profitability[23] FY 2025 Guidance - Revenue Guidance: Reaffirming 35% to 40% year-over-year growth[20] - Aviation Adjusted EBITDA Margin Guidance: Increasing to 16.5% to 17%, the high-end of previously provided range[20]

FY25 Financial Performance - Adjusted sales increased by 20% from $2.3 billion in FY24 to $2.8 billion in FY25[10] - Adjusted EBITDA increased by 34% from $242 million in FY24 to $324 million in FY25[10] - Adjusted EPS increased by 17% from $3.33 in FY24 to $3.91 in FY25[10] - Net leverage decreased from 3.30x in FY24 to 2.72x in FY25[10] Q4 FY25 Financial Performance - Adjusted EPS increased by 32% from $0.88 in Q4 FY24 to $1.16 in Q4 FY25[14] - Adjusted sales increased by 12% from $658.8 million in Q4 FY24 to $735.8 million in Q4 FY25[14] - Adjusted operating income increased by 25% from $61.3 million in Q4 FY24 to $76.9 million in Q4 FY25[14] - Adjusted EBITDA increased by 19% from $76.4 million in Q4 FY24 to $90.9 million in Q4 FY25[14] Segment Performance in Q4 FY25 - Parts Supply sales increased by 17% from $260.3 million in Q4 FY24 to $305.5 million in Q4 FY25[14] - Integrated Solutions sales increased by 10% from $165.8 million in Q4 FY24 to $181.5 million in Q4 FY25[14]

Core Insights - The aviation industry is experiencing growth due to increased air traffic and supply chain disruptions, benefiting companies like AerSale Corporation (ASLE) and Air Lease Corp. (AL) [1][2] - ASLE specializes in aftermarket services and parts, while AL focuses on leasing new aircraft, both of which are in demand due to current market conditions [2][3] Summary of AerSale Corporation (ASLE) - Recent Achievements: ASLE's Q1 2025 revenues for Used Serviceable Material (USM) and engine leasing increased by 44.1% and 143.4% year over year, indicating strong demand [4] - Strategic Acquisition: In January 2025, ASLE acquired a parts portfolio from Sanad Group, enhancing its inventory for popular aircraft models [5] - Financial Stability: As of March 31, 2025, ASLE had $11 million in cash, $1 million in current debt, and $4 million in long-term debt, reflecting a strong solvency position [6] - Share Repurchase: In March 2025, ASLE signed an agreement to repurchase $45 million in shares from Leonard Green & Partners, L.P. [7] Summary of Air Lease Corp. (AL) - Recent Achievements: AL reported an 11.3% year-over-year revenue increase and a net income surge of 274.5% in Q1 2025, with a fleet net book value of $28.6 billion [8][9] - Order Pipeline: AL has contractual commitments for 260 new aircraft from Airbus and Boeing, valued at $16.6 billion, enhancing its long-term revenue prospects [9] - Financial Stability: As of March 31, 2025, AL's cash and cash equivalents were $0.46 billion, with long-term debt at $19.89 billion, indicating a solid solvency position for future investments [10] Comparative Analysis - Stock Performance: ASLE has underperformed with a 12.5% decline over the past three months, while AL has increased by 26% [16] - Valuation Metrics: ASLE trades at a forward earnings multiple of 10.68X, higher than AL's 9.06X, suggesting a less attractive valuation for ASLE [17] - Return on Equity: AL demonstrates a better Return on Equity (ROE) compared to ASLE, indicating more efficient profit generation [21] Final Insights - Both ASLE and AL are positioned to benefit from long-term aviation sector tailwinds, but their near-term prospects differ significantly [22] - AL's consistent growth, strong order backlog, and higher ROE make it a more attractive investment compared to ASLE, which faces declining EPS estimates and a premium valuation [23][24] - AL holds a Zacks Rank 2 (Buy), while ASLE has a Zacks Rank 5 (Strong Sell), indicating a preference for AL among investors [25]