VSE Corporation Announces First Quarter 2020 Results
ALEXANDRIA, Va., April 30, 2020 - VSE Corporation (NASDAQ: VSEC, “VSE”, or the “Company”), a leading provider of aftermarket distribution and repair services for land, sea and air transportation assets for government and commercial markets, today announced results for the first quarter 2020.
FIRST QUARTER 2020 HIGHLIGHTS
Enacted COVID-19 response and business continuity plan
All repair, distribution and base locations remain open and operational
Positive free cash flow anticipated for the full year 2020
FIRST QUARTER 2020 SUMMARY RESULTS AS COMPARED TO THE FIRST QUARTER 2019
Total Revenues of $177.4 million increased 4.4%
GAAP Net Income of $3.3 million decreased 49.5%
Adjusted Net Income of $9.8 million increased 32%
Total Adjusted EBITDA of $22.7 million increased 15.4%
GAAP EPS (Diluted) of $0.30 decreased 50%
Adjusted EPS (Diluted) of $0.89 increased 30.9%
Free Cash Flow of $6.0 million increased by $5.6 million
For the three months ended March 31, 2020, the Company reported total revenue of $177.4 million, versus $169.9 million for the same period ended 2019. The Company reported adjusted net income of $9.8 million or $0.89 per adjusted diluted share, compared to $7.4 million or $0.68 per adjusted diluted share in the prior-year period. Adjusted EBITDA increased to $22.7 million in first quarter 2020, versus $19.7 million for the same period in 2019.
During the first quarter 2020, the Company renamed its reporting segments to reflect the strategic focus of each business moving forward. The Aviation Group was renamed Aviation segment; the Supply Chain Management Group was renamed Fleet segment; and the Federal Services Group was renamed Federal & Defense segment.
During the first quarter, Aviation segment revenue increased 18% on a year-over-year basis, driven by strong performance and market share gains for both aftermarket distribution products and maintenance, repair and overhaul ("MRO") services. Fleet segment revenue increased 3% in the first quarter, driven by new commercial market customers. Growth in both our Aviation and Fleet segments revenue offset an anticipated decline in Federal & Defense segment revenue. Federal & Defense segment revenue declined 4% in the first quarter due to a forecasted contract expiration in January 2020. Federal & Defense bookings increased more than 30% on a year-over-year basis, as new business development efforts and recent contract renewals and wins position the segment for future growth.
COVID-19 BUSINESS UPDATE
With the recent and continuing outbreak of the novel coronavirus (COVID-19), VSE has taken steps to ensure the ongoing safety of its employees, while continuing to serve customers with quality product and repair services.
The business operations of VSE are deemed critical and essential by federal and state governments. All VSE repair, distribution and base operations facilities remain open and operational, and the Company continues to deliver products and services to its customers without interruption. VSE has implemented virus mitigation and prevention protocols consistent with guidelines issued by the U.S. Centers for Disease Control and Prevention at all of its operating facilities. The Company has also mandated that employees work remotely where practicable.
The Company’s Federal & Defense and Fleet segments are supported by historically stable, multi-year government contracts and long-term customer relationships. Collectively, both segments represented a combined 70% of total