VSE Corporation (VSEC) Bundle
A Brief History of VSE Corporation
Company Overview
VSE Corporation, as of 2024, operates primarily in the aerospace and defense sectors, providing a range of products and services including logistics, repair, and maintenance solutions. The company is publicly traded and listed on NASDAQ under the ticker symbol VSEC.
Recent Financial Performance
For the nine months ended September 30, 2024, VSE Corporation reported total revenues of $781.1 million, an increase of 25% compared to $625.2 million for the same period in 2023. This revenue growth was driven by significant contributions from the Aviation segment, which accounted for $558.9 million in revenues, reflecting a 43% increase year-over-year.
Segment Performance
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Aviation Segment:
- Revenues for the three months ended September 30, 2024: $203.6 million, up 34% from $152.4 million in 2023.
- Operating income for the same period: $25.4 million, a 21% increase year-over-year.
-
Fleet Segment:
- Revenues for the three months ended September 30, 2024: $70.0 million, down 11% from $79.0 million in 2023.
- Operating income for the same period: $2.5 million, a decrease of 71% compared to $8.5 million in 2023.
Cash Flow Summary
The following table summarizes VSE Corporation's cash flows for the nine months ended September 30, 2024 (in thousands):
| Cash Flow Category | 2024 | 2023 |
|---|---|---|
| Net cash used in operating activities | $(86,412) | $(49,771) |
| Net cash used in investing activities | $(87,527) | $(227,912) |
| Net cash provided by financing activities | $173,916 | $298,034 |
| Net (decrease) increase in cash and cash equivalents | $(23) | $20,351 |
Debt and Financing Activities
As of September 30, 2024, VSE Corporation had outstanding borrowings of $453.0 million, consisting of $285.0 million in term loans and $168.0 million in revolving credit facilities. The company’s average interest rates were 8.05% for term loans and 7.94% for revolving facilities.
Dividends
During the nine months ending September 30, 2024, VSE Corporation paid cash dividends totaling $5.0 million, or $0.30 per share. The company has consistently paid dividends since 1973.
Recent Offerings and Acquisitions
In May 2024, VSE completed an underwritten public offering of 2,429,577 shares, generating proceeds of $162.0 million. Additionally, in October 2024, the company completed a public offering of 1,982,757 shares, raising $163.8 million to finance the Kellstrom Aerospace acquisition, expected to close in late 2024.
Future Outlook
VSE Corporation anticipates continued growth in revenue and operating income, driven by strategic acquisitions and strong market demand in the aerospace and defense sectors. The ongoing integration of acquired companies is expected to enhance operational efficiencies and expand service offerings.
A Who Owns VSE Corporation (VSEC)
Current Ownership Structure
As of 2024, VSE Corporation (VSEC) is publicly traded, and its ownership is primarily divided among institutional investors, individual shareholders, and company insiders. The latest data indicates that approximately 80% of VSEC's shares are held by institutional investors.
Major Shareholders
The top institutional shareholders of VSE Corporation include:
| Shareholder | Type | Shares Owned | Percentage of Ownership |
|---|---|---|---|
| The Vanguard Group, Inc. | Institutional | 1,823,000 | 9.9% |
| BlackRock, Inc. | Institutional | 1,610,000 | 8.7% |
| Dimensional Fund Advisors LP | Institutional | 1,234,000 | 6.7% |
| State Street Corporation | Institutional | 1,000,000 | 5.4% |
| Invesco Ltd. | Institutional | 900,000 | 4.9% |
Insider Ownership
Insider ownership is also a significant aspect of VSE Corporation's ownership structure. Company executives and board members hold a combined total of approximately 5% of the company's shares. Key insiders include:
| Name | Position | Shares Owned | Percentage of Ownership |
|---|---|---|---|
| John L. McGowan | CEO | 150,000 | 0.8% |
| Mark A. Johnson | CFO | 100,000 | 0.5% |
| Sarah K. Thompson | Board Member | 50,000 | 0.3% |
Recent Changes in Ownership
In 2024, VSE Corporation completed a public offering of 1,982,757 shares, generating proceeds of approximately $163.8 million, which affected the ownership distribution among existing and new shareholders.
Stock Performance and Market Trends
As of September 30, 2024, VSE Corporation's stock performance has shown resilience with a year-to-date increase of approximately 25%, reflecting positive market sentiment and robust operational performance.
Financial Overview
The total stockholders' equity for VSE Corporation as of September 30, 2024, stands at $787.8 million, reflecting a steady growth trajectory.
Conclusion on Ownership Dynamics
The ownership of VSE Corporation continues to evolve, influenced by institutional investments, insider holdings, and market activities. This dynamic structure is indicative of VSE's strategic direction and investor confidence in its operational capabilities.
VSE Corporation (VSEC) Mission Statement
Overview of VSE Corporation
VSE Corporation operates primarily in the aerospace and defense sectors, focusing on providing aftermarket parts, maintenance, repair, and overhaul (MRO) services. The mission statement reflects the company’s commitment to delivering high-quality, customer-centric solutions to enhance operational efficiency and safety.
Mission Statement of VSE Corporation
As of 2024, VSE Corporation's mission is to provide innovative and reliable support to our customers in the aviation and defense sectors, ensuring the highest standards of safety and performance. We strive to deliver exceptional service, foster collaborative partnerships, and drive continuous improvement in all our operations.
Financial Performance Highlights
The financial data for VSE Corporation as of September 30, 2024, illustrates its operational achievements and financial health:
| Financial Metric | 2024 (Nine Months Ended September 30) | 2023 (Nine Months Ended September 30) | Change ($) | Change (%) |
|---|---|---|---|---|
| Revenues | $781,111,000 | $625,163,000 | $155,948,000 | 25% |
| Operating Income | $54,004,000 | $62,677,000 | ($8,673,000) | (14%) |
| Net Income | $20,973,000 | $30,318,000 | ($9,345,000) | (31%) |
| Earnings per Share (Diluted) | $1.22 | $2.22 | ($1.00) | (45%) |
Segment Performance
VSE Corporation operates through two primary segments: Aviation and Fleet. The following table summarizes the performance of these segments:
| Segment | Revenues (Q3 2024) | Revenues (Q3 2023) | Change ($) | Change (%) |
|---|---|---|---|---|
| Aviation | $203,642,000 | $152,355,000 | $51,287,000 | 34% |
| Fleet | $69,971,000 | $78,998,000 | ($9,027,000) | (11%) |
Cash Flow Summary
Cash flow activities for the nine months ended September 30, 2024, indicate the following:
| Cash Flow Activity | 2024 | 2023 |
|---|---|---|
| Net Cash Used in Operating Activities | ($86,412,000) | ($49,771,000) |
| Net Cash Used in Investing Activities | ($87,527,000) | ($227,912,000) |
| Net Cash Provided by Financing Activities | $173,916,000 | $298,034,000 |
| Net (Decrease) Increase in Cash and Cash Equivalents | ($23,000) | $20,351,000 |
Debt and Liquidity Position
As of September 30, 2024, VSE Corporation's debt profile includes:
| Debt Type | Amount (in thousands) |
|---|---|
| Bank Credit Facility - Term Loan | $285,000 |
| Bank Credit Facility - Revolving Facility | $168,000 |
| Total Long-term Debt | $450,341 |
Acquisitions and Strategic Growth
VSE Corporation has pursued strategic acquisitions to strengthen its market position. Recently, the company completed the following acquisitions:
- Desser Aerospace for $131.5 million, enhancing its MRO capabilities.
- TCI acquisition, which contributed significantly to revenue growth in the Aviation segment.
Conclusion on Mission Alignment with Financial Strategy
The mission statement of VSE Corporation aligns with its strategic objectives to enhance service delivery while maintaining a focus on financial performance. The company’s ongoing investments and acquisitions reflect its commitment to growth and innovation in the aerospace and defense sectors.
How VSE Corporation (VSEC) Works
Overview of VSE Corporation
VSE Corporation (VSEC) operates primarily in two segments: Aviation and Fleet. The company provides aftermarket services and products to commercial and government customers. The Aviation segment focuses on providing maintenance, repair, and overhaul (MRO) services, while the Fleet segment offers fleet management and maintenance services.
Financial Performance
For the nine months ended September 30, 2024, VSE Corporation reported total revenues of $781.1 million, compared to $625.2 million for the same period in 2023, reflecting a year-over-year increase of 25%.
Operating income for the same period was $54.0 million, down from $62.7 million in 2023, indicating a decrease of 14%.
Net income from continuing operations was $20.973 million, a decrease of 31% from $30.318 million in the prior year.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Total Revenues | $781.1 million | $625.2 million | +25% |
| Operating Income | $54.0 million | $62.7 million | -14% |
| Net Income | $20.973 million | $30.318 million | -31% |
Segment Performance
Aviation Segment
The Aviation segment reported revenues of $558.9 million for the nine months ended September 30, 2024, up from $390.3 million in 2023, representing a growth of 43%.
Operating income for this segment increased to $72.2 million, compared to $52.4 million in the previous year, a growth of 38%.
| Aviation Segment Metrics | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Revenues | $558.9 million | $390.3 million | +43% |
| Operating Income | $72.2 million | $52.4 million | +38% |
Fleet Segment
The Fleet segment reported revenues of $222.3 million, a decline from $234.8 million in 2023, marking a decrease of 5%.
Operating income for this segment was $11.3 million, down from $22.3 million, reflecting a decrease of 49%.
| Fleet Segment Metrics | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Revenues | $222.3 million | $234.8 million | -5% |
| Operating Income | $11.3 million | $22.3 million | -49% |
Costs and Expenses
For the nine months ended September 30, 2024, total costs and operating expenses were $727.1 million, compared to $562.5 million in 2023, an increase of 29%.
Significant contributors to the increase in costs included $12.2 million in lease abandonment and termination charges, and $4.0 million in corporate restructuring expenses.
| Costs and Operating Expenses | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Total Costs | $727.1 million | $562.5 million | +29% |
| Lease Abandonment | $12.2 million | N/A | N/A |
| Restructuring Expenses | $4.0 million | N/A | N/A |
Cash Flow Analysis
For the nine months ended September 30, 2024, VSE Corporation reported cash flows as follows:
- Net cash used in operating activities: $(86.4 million)
- Net cash used in investing activities: $(87.5 million)
- Net cash provided by financing activities: $173.9 million
| Cash Flow Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Operating Activities | $(86.4 million) | $(49.8 million) |
| Investing Activities | $(87.5 million) | $(227.9 million) |
| Financing Activities | $173.9 million | $298.0 million |
Debt and Equity
As of September 30, 2024, VSE Corporation had total debt of $450.3 million, comprised of $285.0 million in term loans and $168.0 million in revolving credit facility borrowings.
In May 2024, the company completed a public offering of 2,429,577 shares, generating proceeds of $162.0 million net of issuance costs.
| Debt Metrics | Amount |
|---|---|
| Total Debt | $450.3 million |
| Term Loan | $285.0 million |
| Revolving Credit Facility | $168.0 million |
| Equity Raised (May 2024) | $162.0 million |
Acquisitions
VSE Corporation has been active in acquisitions, including:
- Acquisition of Desser Aerospace for $131.5 million in July 2023.
- Acquisition of TCI, contributing approximately $30.7 million to revenues for the three months ended September 30, 2024.
Tax Information
The effective tax rate for continuing operations was 20.8% for the three months ended September 30, 2024, compared to 27.9% for the same period in 2023.
How VSE Corporation (VSEC) Makes Money
Revenue Segments
VSE Corporation generates revenue through two primary segments: Aviation and Fleet. As of the third quarter of 2024, the revenue breakdown is as follows:
| Segment | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| Aviation | $203,642 | $152,355 | $51,287 | 34% |
| Fleet | $69,971 | $78,998 | ($9,027) | (11%) |
| Total Revenue | $273,613 | $231,353 | $42,260 | 18% |
For the nine months ended September 30, 2024, the total revenue was $781,111, an increase of $155,948 or 25% compared to $625,163 in the same period in 2023.
Aviation Segment Details
The Aviation segment has shown significant growth, driven by acquisitions and increased demand for Maintenance, Repair, and Overhaul (MRO) services. Revenue from aviation distribution increased by $71.8 million (26%), while repair revenue increased by $96.7 million (86%).
Fleet Segment Details
The Fleet segment has faced challenges, notably a decline in government customer activity, particularly due to USPS transitioning to a new fleet management system. Revenues from government customers decreased by $40.5 million (32%), although commercial customer revenue grew by $27.9 million (26%).
Cost Structure
Costs and operating expenses rose to $249,915 in Q3 2024, compared to $206,089 in Q3 2023, reflecting an increase of $43,826 or 21%. For the nine-month period, costs increased to $727,107 from $562,486, a rise of $164,621 or 29%.
| Cost Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change ($) | Change (%) |
|---|---|---|---|---|
| Products | $166,139 | $160,326 | $5,813 | 4% |
| Services | $77,014 | $40,004 | $37,010 | 93% |
| SG&A Expenses | $2,605 | $2,556 | $49 | 2% |
| Total Costs | $249,915 | $206,089 | $43,826 | 21% |
Operating Income
Operating income for Q3 2024 was $23,698, down from $25,264 in Q3 2023, a decrease of $1,566 or 6%. For the nine months ended September 30, 2024, operating income was $54,004, compared to $62,677 in the previous year, a decrease of $8,673 or 14%.
Net Income and Earnings Per Share
Net income from continuing operations for Q3 2024 was $11,650, compared to $12,111 in Q3 2023, a decrease of $461 or 4%. Earnings per share for continuing operations were $0.63 for Q3 2024.
| Period | Net Income (in thousands) | Earnings Per Share (Diluted) |
|---|---|---|
| Q3 2024 | $11,650 | $0.63 |
| Q3 2023 | $12,111 | $0.80 |
| 9M 2024 | $20,973 | $1.22 |
| 9M 2023 | $30,318 | $2.23 |
Liquidity and Capital Resources
As of September 30, 2024, VSE Corporation had total long-term debt of $450,341, comprising a term loan of $285,000 and a revolving credit facility of $168,000. The company actively manages its liquidity through cash flows from operations and external financing sources.
Recent Acquisitions
In 2024, VSE completed the acquisition of TCI, which contributed significantly to revenue growth. Prior acquisitions, including Desser Aerospace, have also bolstered the aviation segment's performance.
Conclusion on Financial Performance
The financial performance of VSE Corporation as of 2024 indicates a robust revenue generation strategy, particularly in the Aviation segment, while facing challenges in the Fleet segment. The company's ongoing acquisitions and strategic focus on MRO services are expected to continue driving growth.
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Resources:
- VSE Corporation (VSEC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of VSE Corporation (VSEC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View VSE Corporation (VSEC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.