VSE Corporation Announces Third Quarter 2024 Results
Record Revenue and Record Profitability for Aviation Segment
Raising Full Year 2024 Aviation Revenue Guidance
THIRD QUARTER 2024 RESULTS(1)
(As compared to the Third Quarter 2023)
-
Total Revenues of
$273.6 million increased 18.3%
-
GAAP Net Income of
$11.7 million decreased 3.8%
-
GAAP EPS (Diluted) of
$0.63 decreased 21.3%
-
Adjusted EBITDA(2) of
$33.2 million increased 2.6%
-
Adjusted Net Income(2) of
$13.1 million decreased 5.3%
-
Adjusted EPS (Diluted)(2)of
$0.71 decreased 22.8%
1 From continuing operations |
2 Non-GAAP measure. See additional information at the end of this release regarding non-GAAP financial measures |
MANAGEMENT COMMENTARY
"We are very pleased to announce our third quarter 2024 results, marked by the strongest quarterly performance in our Aviation segment's history, achieving a revenue milestone of over
"In our Fleet segment, we continue to advance our customer diversification strategy, with our commercial customers representing 64% of segment revenue as of the third quarter. Following a temporary reduction in activity with the
"Our third quarter 2024 results reflect our commitment to financial discipline," stated
STRATEGIC UPDATE
KELLSTROM AEROSPACE ACQUISITION:
-
On
October 15, 2024 , VSE announced it signed a definitive agreement to acquireKellstrom Aerospace Group, Inc. ("Kellstrom Aerospace "), a leading full-service aftermarket solutions provider of value-added distribution and technical services for the commercial aerospace aftermarket.Kellstrom's portfolio of engine-focused products and MRO services, coupled with its technical advisory capabilities, expandsVSE Aviation's portfolio of product and service solutions in the high-growth commercial aftermarket. -
Kellstrom generated approximately$175 million of revenue for the trailing-twelve-month period endedSeptember 2024 . The Company expects to generate run-rate synergies of approximately$4 million within 18 months of close. The total consideration for the acquisition is approximately$200 million , comprised of approximately$185 million in cash and approximately$15 million of common shares of the Company, subject to working capital adjustments. The acquisition is expected to close in the fourth quarter of 2024, pending customary closing conditions, including regulatory review.
AVIATION NEW PROGRAM EXECUTION AND INTEGRATION UPDATE:
-
The Aviation segment continues to scale the new European distribution Center of Excellence in
Hamburg, Germany , supporting the Pratt & Whitney Canada Europe,Middle East andAfrica ("EMEA") aftermarket product support program. The program is expected to be at a full year run-rate by the end of the fourth quarter of 2024. -
The OEM-licensed manufacturing fuel control program continues to outpace expectations and contribute to the segment's profitability. The
Kansas facility expansion supporting the fuel control program is expected to be operational in the first quarter of 2025. -
The integration of
Desser Aerospace's U.S. distribution business was completed in the third quarter of 2024.Desser Aerospace's tire, tube, brake and battery product lines are now being sold under theVSE Aviation name, and tires are now being sold inEurope through the Company's new distribution facility inHamburg, Germany . -
VSE Aviation's new e-commerce site was successfully launched in the third quarter of 2024, focused on initial offerings including legacyDesser Aerospace products.
FLEET UPDATE:
-
The
USPS transition to a new Fleet Management Information System ("FMIS") platform was completed in the third quarter of 2024. Post-implementation, the Company expects an increase in repair activity, and subsequently, an increase in the usage of parts. - The e-commerce fulfillment distribution center continues to scale and support above-market growth and additional market share opportunities.
- The Fleet segment strategic review remains in process, and the Company expects to provide an update in the coming months.
CORPORATE UPDATE:
-
In
October 2024 , VSE completed a follow-on equity offering of 1,982,757 shares of common stock at$87.00 per share, resulting in net cash proceeds of approximately$163.8 million . -
The net proceeds from the offering will be used to finance a portion of the
Kellstrom Aerospace acquisition.
THIRD QUARTER SEGMENT RESULTS
Aviation segment revenue increased 34% year-over-year to a record
Fleet segment revenue decreased 11% year-over-year to
FINANCIAL RESOURCES AND LIQUIDITY
As of
GUIDANCE
VSE is increasing its full-year 2024 revenue growth and maintaining Adjusted EBITDA margin percentage guidance for its Aviation segment. The guidance is as follows:
-
Aviation segment full-year 2024 revenue guidance is increasing from 34% to 38% growth to 39% to 41%, as compared to the prior year revenue. Revenue contributions from the
Kellstrom acquisition, which is expected to close in the in the fourth quarter of 2024, are not included in our updated guidance. - Aviation segment maintains full-year 2024 Adjusted EBITDA margin guidance of 15.5% to 16.5%.
VSE is revising its full-year 2024 revenue and maintaining Adjusted EBITDA margin guidance for its Fleet segment. The guidance is as follows:
- Fleet segment full-year 2024 revenue guidance is decreasing from 0% to 5% to (5)% to (10)%, as compared to the prior year revenue.
- Fleet segment maintains full-year 2024 Adjusted EBITDA margin guidance of 6% to 8%.
THIRD QUARTER RESULTS
|
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Three months ended |
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Nine months ended |
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(in thousands, except per share data) |
|
|
2024 |
|
|
2023 |
|
% Change |
|
|
2024 |
|
|
2023 |
|
% Change |
||
Revenues |
|
$ |
273,613 |
|
$ |
231,353 |
|
18.3 |
% |
|
$ |
781,111 |
|
$ |
625,163 |
|
24.9 |
% |
Operating income |
|
$ |
23,698 |
|
$ |
25,264 |
|
(6.2 |
)% |
|
$ |
54,004 |
|
$ |
62,677 |
|
(13.8 |
)% |
Net income from continuing operations |
|
$ |
11,650 |
|
$ |
12,111 |
|
(3.8 |
)% |
|
$ |
20,973 |
|
$ |
30,318 |
|
(30.8 |
)% |
EPS (Diluted) |
|
$ |
0.63 |
|
$ |
0.80 |
|
(21.3 |
)% |
|
$ |
1.22 |
|
$ |
2.22 |
|
(45.0 |
)% |
THIRD QUARTER SEGMENT RESULTS
The following is a summary of revenues and operating income for the three and nine months ended
|
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Three months ended |
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Nine months ended |
||||||||||||||||||
(in thousands) |
|
|
2024 |
|
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|
2023 |
|
|
% Change |
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|
2024 |
|
|
|
2023 |
|
|
% Change |
||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Aviation |
|
$ |
203,642 |
|
|
$ |
152,355 |
|
|
33.7 |
% |
|
$ |
558,853 |
|
|
$ |
390,319 |
|
|
43.2 |
% |
Fleet |
|
|
69,971 |
|
|
|
78,998 |
|
|
(11.4 |
)% |
|
|
222,258 |
|
|
|
234,844 |
|
|
(5.4 |
)% |
Total revenues |
|
$ |
273,613 |
|
|
$ |
231,353 |
|
|
18.3 |
% |
|
$ |
781,111 |
|
|
$ |
625,163 |
|
|
24.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Aviation |
|
$ |
25,435 |
|
|
$ |
20,951 |
|
|
21.4 |
% |
|
$ |
72,214 |
|
|
$ |
52,397 |
|
|
37.8 |
% |
Fleet |
|
|
2,471 |
|
|
|
8,531 |
|
|
(71.0 |
)% |
|
|
11,299 |
|
|
|
22,284 |
|
|
(49.3 |
)% |
Corporate/unallocated expenses |
|
|
(4,208 |
) |
|
|
(4,218 |
) |
|
(0.2 |
)% |
|
|
(29,509 |
) |
|
|
(12,004 |
) |
|
145.8 |
% |
Operating income |
|
$ |
23,698 |
|
|
$ |
25,264 |
|
|
(6.2 |
)% |
|
$ |
54,004 |
|
|
$ |
62,677 |
|
|
(13.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company reported
NON-GAAP MEASURES
In addition to the financial measures prepared in accordance with generally accepted accounting principles ("GAAP"), this earnings release also contains Non-GAAP financial measures. These measures provide useful information to investors, and a reconciliation of these measures to the most directly comparable GAAP measures and other information relating to these Non-GAAP measures is included in the supplemental schedules attached.
NON-GAAP FINANCIAL INFORMATION
Adjusted Net Income from Continuing Operations and Adjusted EPS
|
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Three months ended |
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Nine months ended |
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|||
Net income from continuing operations |
$ |
11,650 |
|
|
$ |
12,111 |
|
|
(3.8 |
)% |
|
$ |
20,973 |
|
|
$ |
30,318 |
|
|
(30.8 |
)% |
|
Adjustments to income from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Non-recurring professional fees |
|
— |
|
|
|
300 |
|
|
(100.0 |
)% |
|
|
— |
|
|
|
300 |
|
|
(100.0 |
)% |
|
Debt issuance costs |
|
— |
|
|
|
266 |
|
|
(100.0 |
)% |
|
|
— |
|
|
|
266 |
|
|
(100.0 |
)% |
|
Acquisition, integration and restructuring costs |
|
1,973 |
|
|
|
1,700 |
|
|
16.1 |
% |
|
|
6,010 |
|
|
|
3,800 |
|
|
58.2 |
% |
|
Severance costs |
|
372 |
|
|
|
— |
|
|
— |
% |
|
|
372 |
|
|
|
— |
|
|
— |
% |
|
Lease abandonment and termination (benefits) costs (1) |
|
(612 |
) |
|
|
— |
|
|
— |
% |
|
|
12,245 |
|
|
|
— |
|
|
— |
% |
|
Divestiture-related restructuring costs |
|
178 |
|
|
|
— |
|
|
— |
% |
|
|
4,039 |
|
|
|
— |
|
|
— |
% |
|
|
13,561 |
|
|
|
14,377 |
|
|
(5.7 |
)% |
|
|
43,639 |
|
|
|
34,684 |
|
|
25.8 |
% |
|
|
Tax impact of adjusted items |
|
(477 |
) |
|
|
(566 |
) |
|
(15.7 |
)% |
|
|
(5,655 |
) |
|
|
(1,090 |
) |
|
418.8 |
% |
Adjusted net income from continuing operations |
$ |
13,084 |
|
|
$ |
13,811 |
|
|
(5.3 |
)% |
|
$ |
37,984 |
|
|
$ |
33,594 |
|
|
13.1 |
% |
|
Weighted average dilutive shares |
|
18,479 |
|
|
|
15,050 |
|
|
22.8 |
% |
|
|
17,212 |
|
|
|
13,639 |
|
|
26.2 |
% |
|
Adjusted EPS (Diluted) |
$ |
0.71 |
|
|
$ |
0.92 |
|
|
(22.8 |
)% |
|
$ |
2.21 |
|
|
$ |
2.46 |
|
|
(10.2 |
)% |
|
|
(1) Includes consulting costs incurred in conjunction with lease termination. |
EBITDA and Adjusted EBITDA
|
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Three months ended |
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Nine months ended |
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(in thousands) |
|
2024 |
|
|
|
2023 |
|
% Change |
|
|
2024 |
|
|
2023 |
|
% Change |
|||
Net income from continuing operations |
$ |
11,650 |
|
|
$ |
12,111 |
|
(3.8 |
)% |
|
$ |
20,973 |
|
$ |
30,318 |
|
(30.8 |
)% |
|
|
Interest expense |
|
8,983 |
|
|
|
8,459 |
|
6.2 |
% |
|
|
27,996 |
|
|
21,805 |
|
28.4 |
% |
|
Income taxes |
|
3,065 |
|
|
|
4,694 |
|
(34.7 |
)% |
|
|
5,035 |
|
|
10,554 |
|
(52.3 |
)% |
|
Amortization of intangible assets |
|
4,809 |
|
|
|
3,203 |
|
50.1 |
% |
|
|
12,550 |
|
|
10,743 |
|
16.8 |
% |
|
Depreciation and other amortization |
|
2,734 |
|
|
|
1,836 |
|
48.9 |
% |
|
|
7,561 |
|
|
4,869 |
|
55.3 |
% |
EBITDA |
|
31,241 |
|
|
|
30,303 |
|
3.1 |
% |
|
|
74,115 |
|
|
78,289 |
|
(5.3 |
)% |
|
|
Non-recurring professional fees |
|
— |
|
|
|
300 |
|
(100.0 |
)% |
|
|
— |
|
|
300 |
|
(100.0 |
)% |
|
Acquisition, integration and restructuring costs |
|
1,973 |
|
|
|
1,700 |
|
16.1 |
% |
|
|
6,010 |
|
|
3,800 |
|
58.2 |
% |
|
Severance costs |
|
372 |
|
|
|
— |
|
— |
% |
|
|
372 |
|
|
— |
|
— |
% |
|
Lease abandonment and termination (benefits) costs |
|
(612 |
) |
|
|
— |
|
— |
% |
|
|
12,245 |
|
|
— |
|
— |
% |
|
Divestiture-related restructuring costs |
|
178 |
|
|
|
— |
|
— |
% |
|
|
4,039 |
|
|
— |
|
— |
% |
Adjusted EBITDA |
$ |
33,152 |
|
|
$ |
32,303 |
|
2.6 |
% |
|
$ |
96,781 |
|
$ |
82,389 |
|
17.5 |
% |
Adjusted EBITDA Summary |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
(in thousands) |
Three months ended |
|
Nine months ended |
|||||||||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
||
|
Aviation |
$ |
32,594 |
|
|
$ |
25,320 |
|
|
28.7 |
% |
|
$ |
91,250 |
|
|
$ |
63,453 |
|
|
43.8 |
% |
|
Fleet |
|
3,786 |
|
|
|
9,193 |
|
|
(58.8 |
)% |
|
|
14,596 |
|
|
|
26,894 |
|
|
(45.7 |
)% |
|
Adjusted Corporate expenses (1) |
|
(3,228 |
) |
|
|
(2,210 |
) |
|
46.1 |
% |
|
|
(9,065 |
) |
|
|
(7,958 |
) |
|
13.9 |
% |
Adjusted EBITDA |
$ |
33,152 |
|
|
$ |
32,303 |
|
|
2.6 |
% |
|
$ |
96,781 |
|
|
$ |
82,389 |
|
|
17.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) Includes certain adjustments not directly attributable to any of our segments. |
Segment EBITDA and Adjusted EBITDA
|
|
|
Three months ended |
|
Nine months ended |
||||||||||||||
(in thousands) |
|
|
2024 |
|
|
2023 |
|
% Change |
|
|
2024 |
|
|
2023 |
|
% Change |
|||
Aviation |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Operating income |
|
$ |
25,435 |
|
$ |
20,951 |
|
21.4 |
% |
|
$ |
72,214 |
|
$ |
52,397 |
|
37.8 |
% |
|
Depreciation and amortization |
|
|
6,951 |
|
|
4,329 |
|
60.6 |
% |
|
|
17,919 |
|
|
11,016 |
|
62.7 |
% |
EBITDA |
|
|
32,386 |
|
|
25,280 |
|
28.1 |
% |
|
|
90,133 |
|
|
63,413 |
|
42.1 |
% |
|
|
Acquisition, integration and restructuring costs |
|
|
150 |
|
|
40 |
|
275.0 |
% |
|
|
1,059 |
|
|
40 |
|
2,547.5 |
% |
|
Severance costs |
|
|
58 |
|
|
— |
|
— |
% |
|
|
58 |
|
|
— |
|
— |
% |
Adjusted EBITDA |
|
$ |
32,594 |
|
$ |
25,320 |
|
28.7 |
% |
|
$ |
91,250 |
|
$ |
63,453 |
|
43.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fleet |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Operating income |
|
$ |
2,471 |
|
$ |
8,531 |
|
(71.0 |
)% |
|
$ |
11,299 |
|
$ |
22,284 |
|
(49.3 |
)% |
|
Depreciation and amortization |
|
|
710 |
|
|
662 |
|
7.3 |
% |
|
|
2,188 |
|
|
4,452 |
|
(50.9 |
)% |
EBITDA |
|
|
3,181 |
|
|
9,193 |
|
(65.4 |
)% |
|
|
13,487 |
|
|
26,736 |
|
(49.6 |
)% |
|
|
Acquisition, integration and restructuring costs |
|
|
291 |
|
|
— |
|
— |
% |
|
|
795 |
|
|
158 |
|
403.2 |
% |
|
Severance costs |
|
|
314 |
|
|
— |
|
— |
% |
|
|
314 |
|
|
— |
|
— |
% |
Adjusted EBITDA |
|
$ |
3,786 |
|
$ |
9,193 |
|
(58.8 |
)% |
|
$ |
14,596 |
|
$ |
26,894 |
|
(45.7 |
)% |
Free Cash Flow
|
|
Three months ended |
|
Nine months ended |
||||||||||||
(in thousands) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by (used in) operating activities |
|
$ |
10,176 |
|
|
$ |
15,320 |
|
|
$ |
(86,412 |
) |
|
$ |
(49,771 |
) |
Capital expenditures |
|
|
(5,765 |
) |
|
|
(4,658 |
) |
|
|
(17,439 |
) |
|
|
(10,795 |
) |
Free cash flow |
|
$ |
4,411 |
|
|
$ |
10,662 |
|
|
$ |
(103,851 |
) |
|
$ |
(60,566 |
) |
Net Debt
(in thousands) |
|
|
|
||||
Principal amount of debt |
$ |
453,000 |
|
|
$ |
433,000 |
|
Debt issuance costs |
|
(2,659 |
) |
|
|
(3,656 |
) |
Cash and cash equivalents |
|
(7,907 |
) |
|
|
(7,768 |
) |
Net Debt |
$ |
442,434 |
|
|
$ |
421,576 |
|
Net Leverage Ratio
($ in thousands) |
|
|
|
||
Net Debt |
$ |
442,434 |
|
$ |
421,576 |
TTM Adjusted EBITDA (1) |
$ |
128,225 |
|
$ |
113,833 |
Net Leverage Ratio |
3.5 x |
|
3.7 x |
||
|
|
|
|
||
TTM Acquisition Adjusted EBITDA (2) |
$ |
134,970 |
|
$ |
124,304 |
Adjusted Net Leverage Ratio |
3.3 x |
|
3.4 x |
||
(1) TTM Adjusted EBITDA is defined as Adjusted EBITDA for the most recent twelve (12) month period. (2) TTM Acquisition Adjusted EBITDA includes Turbine Controls EBITDA for the trailing twelve months that are not included in historical results. |
The non-GAAP Financial Information set forth in this document is not calculated in accordance with GAAP under SEC Regulation G. We consider Adjusted Net Income, Adjusted EPS (Diluted), EBITDA, Adjusted EBITDA, Acquisition Adjusted EBITDA, net debt, adjusted net leverage ratio and free cash flow as non-GAAP financial measures and important indicators of performance and useful metrics for management and investors to evaluate our business' ongoing operating performance on a consistent basis across reporting periods. These non-GAAP financial measures, however, should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. Adjusted Net Income represents Net Income adjusted for acquisition-related costs, other discrete items, and related tax impact. Adjusted EPS (Diluted) is computed by dividing net income, adjusted for the discrete items as identified above and the related tax impacts, by the diluted weighted average number of common shares outstanding. EBITDA represents net income before interest expense, income taxes, amortization of intangible assets and depreciation and other amortization. Adjusted EBITDA represents EBITDA (as defined above) adjusted for discrete items as identified above. Acquisition Adjusted EBITDA represents Adjusted EBITDA plus the pre-acquisition portion of EBITDA for the trailing twelve months. Net debt is defined as principal amount of debt less debt issuance costs and less cash and cash equivalents. Free cash flow represents operating cash flow less capital expenditures. Adjusted net leverage ratio is calculated as net debt divided by trailing twelve month Acquisition Adjusted EBITDA.
The Company has presented forward-looking statements regarding Adjusted EBITDA margin. This non-GAAP financial measure is derived by excluding certain amounts, expenses or income, from the corresponding financial measure determined in accordance with GAAP. The determination of the amounts that are excluded from this non-GAAP financial measure is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period in reliance on the exception provided by item 10(e)(1)(i)(B) of Regulation S-K. We are unable to present a quantitative reconciliation of forward-looking Adjusted EBITDA margin to its most directly comparable forward-looking GAAP financial measure because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measure without unreasonable effort or expense. In addition, we believe such reconciliation would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the company's future financial results. This non-GAAP financial measure is a preliminary estimate and is subject to risks and uncertainties, including, among others, changes in connection with quarter-end and year-end adjustments. Any variation between the company's actual results and preliminary financial data set forth above may be material.
CONFERENCE CALL
A conference call will be held
A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of VSE’s website at https://ir.vsecorp.com. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.
To participate in the live teleconference:
Domestic Live: |
(844) 826-3035 |
International Live: |
(412) 317-5195 |
Audio Webcast: |
https://viavid.webcasts.com/starthere.jsp?ei=1690580&tp_key=8747ae1c41 |
To listen to a replay of the teleconference through
Domestic Replay: |
(844) 512-2921 |
International Replay: |
(412) 317-6671 |
Replay PIN Number: |
10189934 |
ABOUT
VSE is a leading provider of aftermarket distribution and repair services. Operating through its two key segments, VSE significantly enhances the productivity and longevity of its customers' high-value, business-critical assets. The Aviation segment is a leading provider of aftermarket parts distribution and maintenance, repair, and overhaul ("MRO") services for components and engine accessories to commercial, business, and general aviation operators. The Fleet segment specializes in part distribution, engineering solutions, and supply chain management services catered to the medium and heavy-duty fleet market. For more detailed information, please visit VSE's website at www.vsecorp.com.
Please refer to the Form 10-Q that will be filed with the
FORWARD LOOKING STATEMENTS
This document contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause VSE’s actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this document. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that actual results will not differ materially from these expectations. “Forward-looking” statements, as such term is defined by the
Unaudited Consolidated Balance Sheets (in thousands except share and per share amounts) |
||||||
|
|
|
|
|
||
|
|
2024 |
|
2023 |
||
Assets |
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
7,907 |
|
$ |
7,768 |
Receivables (net of allowance of |
|
|
162,665 |
|
|
127,958 |
Contract assets |
|
|
29,549 |
|
|
8,049 |
Inventories |
|
|
533,773 |
|
|
500,864 |
Other current assets |
|
|
41,403 |
|
|
36,389 |
Current assets held-for-sale |
|
|
— |
|
|
93,002 |
Total current assets |
|
|
775,297 |
|
|
774,030 |
Property and equipment (net of accumulated depreciation of |
|
|
74,631 |
|
|
58,076 |
Intangible assets (net of accumulated amortization of |
|
|
160,580 |
|
|
114,130 |
|
|
|
390,636 |
|
|
351,781 |
Operating lease right-of-use asset |
|
|
33,549 |
|
|
28,684 |
Other assets |
|
|
29,306 |
|
|
23,637 |
Total assets |
|
$ |
1,463,999 |
|
$ |
1,350,338 |
|
|
|
|
|
||
Liabilities and Stockholders' equity |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Current portion of long-term debt |
|
$ |
30,000 |
|
$ |
22,500 |
Accounts payable |
|
|
122,740 |
|
|
173,036 |
Accrued expenses and other current liabilities |
|
|
55,524 |
|
|
36,383 |
Dividends payable |
|
|
1,843 |
|
|
1,576 |
Current liabilities held-for-sale |
|
|
— |
|
|
53,391 |
Total current liabilities |
|
|
210,107 |
|
|
286,886 |
Long-term debt, less current portion |
|
|
420,341 |
|
|
406,844 |
Deferred compensation |
|
|
7,683 |
|
|
7,939 |
Long-term operating lease obligations |
|
|
29,061 |
|
|
24,959 |
Deferred tax liabilities |
|
|
— |
|
|
6,985 |
Other long-term liabilities |
|
|
9,011 |
|
|
— |
Total liabilities |
|
|
676,203 |
|
|
733,613 |
Commitments and contingencies |
|
|
|
|
||
Stockholders' equity: |
|
|
|
|
||
Common stock, par value |
|
|
921 |
|
|
788 |
Additional paid-in capital |
|
|
404,983 |
|
|
229,103 |
Retained earnings |
|
|
381,680 |
|
|
384,702 |
Accumulated other comprehensive loss |
|
|
212 |
|
|
2,132 |
Total stockholders' equity |
|
|
787,796 |
|
|
616,725 |
Total liabilities and stockholders' equity |
|
$ |
1,463,999 |
|
$ |
1,350,338 |
Unaudited Consolidated Statements of (Loss) Income (in thousands except share and per share amounts) |
||||||||||||||||
|
|
Three months ended |
|
Nine months ended |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Products |
|
$ |
188,334 |
|
|
$ |
184,691 |
|
|
$ |
564,092 |
|
|
$ |
505,135 |
|
Services |
|
|
85,279 |
|
|
|
46,662 |
|
|
|
217,019 |
|
|
|
120,028 |
|
Total revenues |
|
|
273,613 |
|
|
|
231,353 |
|
|
|
781,111 |
|
|
|
625,163 |
|
|
|
|
|
|
|
|
|
|
||||||||
Costs and operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Products |
|
|
166,139 |
|
|
|
160,326 |
|
|
|
495,177 |
|
|
|
442,714 |
|
Services |
|
|
77,014 |
|
|
|
40,004 |
|
|
|
197,454 |
|
|
|
102,908 |
|
Selling, general and administrative expenses |
|
|
2,605 |
|
|
|
2,556 |
|
|
|
9,721 |
|
|
|
6,121 |
|
Lease abandonment and termination (benefits) costs |
|
|
(652 |
) |
|
|
— |
|
|
|
12,205 |
|
|
|
— |
|
Amortization of intangible assets |
|
|
4,809 |
|
|
|
3,203 |
|
|
|
12,550 |
|
|
|
10,743 |
|
Total costs and operating expenses |
|
|
249,915 |
|
|
|
206,089 |
|
|
|
727,107 |
|
|
|
562,486 |
|
Operating income |
|
|
23,698 |
|
|
|
25,264 |
|
|
|
54,004 |
|
|
|
62,677 |
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net |
|
|
8,983 |
|
|
|
8,459 |
|
|
|
27,996 |
|
|
|
21,805 |
|
Income from continuing operations before income taxes |
|
|
14,715 |
|
|
|
16,805 |
|
|
|
26,008 |
|
|
|
40,872 |
|
Provision for income taxes |
|
|
3,065 |
|
|
|
4,694 |
|
|
|
5,035 |
|
|
|
10,554 |
|
Net income from continuing operations |
|
|
11,650 |
|
|
|
12,111 |
|
|
|
20,973 |
|
|
|
30,318 |
|
Loss from discontinued operations, net of tax |
|
|
— |
|
|
|
(2,554 |
) |
|
|
(18,711 |
) |
|
|
(2,789 |
) |
Net income |
|
$ |
11,650 |
|
|
$ |
9,557 |
|
|
$ |
2,262 |
|
|
$ |
27,529 |
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
|
|
|
|
|
|
||||||||
Continuing operations |
|
$ |
0.63 |
|
|
$ |
0.81 |
|
|
$ |
1.22 |
|
|
$ |
2.23 |
|
Discontinued operations |
|
|
— |
|
|
|
(0.17 |
) |
|
|
(1.09 |
) |
|
|
(0.20 |
) |
|
|
$ |
0.63 |
|
|
$ |
0.64 |
|
|
$ |
0.13 |
|
|
$ |
2.03 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted |
|
|
|
|
|
|
|
|
||||||||
Continuing operations |
|
$ |
0.63 |
|
|
$ |
0.80 |
|
|
$ |
1.22 |
|
|
$ |
2.22 |
|
Discontinued operations |
|
|
— |
|
|
|
(0.17 |
) |
|
|
(1.09 |
) |
|
|
(0.20 |
) |
|
|
$ |
0.63 |
|
|
$ |
0.63 |
|
|
$ |
0.13 |
|
|
$ |
2.02 |
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
18,425,643 |
|
|
|
15,001,908 |
|
|
|
17,125,502 |
|
|
|
13,585,391 |
|
Diluted |
|
|
18,479,123 |
|
|
|
15,050,062 |
|
|
|
17,211,825 |
|
|
|
13,639,064 |
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per share |
|
$ |
0.10 |
|
|
$ |
0.10 |
|
|
$ |
0.30 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
Unaudited Consolidated Statements of Cash Flows (in thousands) |
||||||||
|
|
Nine months ended |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(a) |
|
(a) |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net income |
|
$ |
2,262 |
|
|
$ |
27,529 |
|
Adjustments to reconcile net income to net cash used in operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
20,411 |
|
|
|
17,461 |
|
Amortization of debt issuance cost |
|
|
997 |
|
|
|
1,028 |
|
Deferred taxes |
|
|
(9,840 |
) |
|
|
(1,179 |
) |
Stock-based compensation |
|
|
6,497 |
|
|
|
5,811 |
|
Provision for inventory |
|
|
— |
|
|
|
742 |
|
Impairment and loss on sale of business segment |
|
|
16,867 |
|
|
|
— |
|
Loss on sale of property and equipment |
|
|
421 |
|
|
|
— |
|
Lease abandonment and termination costs |
|
|
12,205 |
|
|
|
— |
|
Changes in operating assets and liabilities, net of impact of acquisitions: |
|
|
|
|
||||
Receivables |
|
|
(32,720 |
) |
|
|
(25,304 |
) |
Contract assets |
|
|
5,267 |
|
|
|
5,409 |
|
Inventories |
|
|
(26,808 |
) |
|
|
(60,867 |
) |
Other current assets and other assets |
|
|
(8,232 |
) |
|
|
2,122 |
|
Operating lease assets and liabilities, net |
|
|
(10,442 |
) |
|
|
(262 |
) |
Accounts payable and deferred compensation |
|
|
(67,860 |
) |
|
|
(16,717 |
) |
Accrued expenses and other liabilities |
|
|
4,563 |
|
|
|
(5,544 |
) |
Net cash used in operating activities |
|
|
(86,412 |
) |
|
|
(49,771 |
) |
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property and equipment |
|
|
(17,439 |
) |
|
|
(10,795 |
) |
Proceeds from the sale of business segment |
|
|
42,118 |
|
|
|
— |
|
Proceeds from the payment on notes receivable |
|
|
— |
|
|
|
1,557 |
|
Cash paid for acquisitions, net of cash acquired |
|
|
(112,206 |
) |
|
|
(218,674 |
) |
Net cash used in investing activities |
|
|
(87,527 |
) |
|
|
(227,912 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings on bank credit facilities |
|
|
527,165 |
|
|
|
610,188 |
|
Repayments on bank credit facilities |
|
|
(507,165 |
) |
|
|
(435,298 |
) |
Proceeds from issuance of common stock |
|
|
161,693 |
|
|
|
129,566 |
|
Payment of debt financing costs |
|
|
— |
|
|
|
(1,448 |
) |
Payment of taxes for equity transactions |
|
|
(2,758 |
) |
|
|
(1,113 |
) |
Dividends paid |
|
|
(5,019 |
) |
|
|
(3,861 |
) |
Net cash provided by financing activities |
|
|
173,916 |
|
|
|
298,034 |
|
Net (decrease) increase in cash and cash equivalents |
|
|
(23 |
) |
|
|
20,351 |
|
Cash and cash equivalents, beginning of period |
|
|
7,930 |
|
|
|
478 |
|
Cash and cash equivalents, end of period |
|
$ |
7,907 |
|
|
$ |
20,829 |
|
(a) The cash flows related to discontinued operations and held-for-sale assets and liabilities have not been segregated, and remain included in the major classes of assets and liabilities. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106334323/en/
INVESTOR CONTACT
VP, Investor Relations &
T: (954) 547-0480 M: (561) 281-0247
investors@vsecorp.com
Source: