VSE Corporation Announces Third Quarter 2020 Results
Aviation Segment Reports Quarter-over-Quarter Revenue Growth, Driven by New Business Wins
New Landing Gear Initiative Accelerated by $100 million Aviation Distribution Contract Award
Positive Net Income and Free Cash Flow from Operations; Second Consecutive Quarter of Debt Reduction
ALEXANDRIA, Va., October 28, 2020 - VSE Corporation (NASDAQ: VSEC, “VSE”, or the “Company”), a leading provider of aftermarket distribution and maintenance, repair and overhaul (MRO) services for land, sea and air transportation assets for government and commercial markets, today announced results for the third quarter 2020.
THIRD QUARTER 2020 RESULTS
(as compared to the third quarter 2019)
▪Total Revenues of $165.5 million declined 16.5%
•Total Revenues, excluding divestitures, declined 12.0% (1)
▪GAAP Net Income of $8.1 million declined $2.4 million
▪Adjusted Net Income of $6.8 million declined $4.1 million
▪Total Adjusted EBITDA of $18.0 million declined $6.5 million
▪GAAP EPS (Diluted) of $0.73/share declined $0.22/share
▪Adjusted EPS (Diluted) of $0.62/share declined $0.37/share
▪Operating Cash Flow of $12.4 million during the third quarter 2020
▪Free Cash Flow of $11.3 million during the third quarter 2020 (2)
▪Total Debt reduced by $10.4 million during the third quarter 2020
(1) Excludes the previously announced divestitures of Prime Turbines and CT Aerospace
(2) Cash provided by operating activities less capital expenditures
For the three months ended September 30, 2020, the Company reported total revenue of $165.5 million, versus $198.3 million for the same period ended 2019. The Company reported adjusted net income of $6.8 million or $0.62 per adjusted diluted share, compared to $10.9 million or $0.99 per adjusted diluted share in the prior-year period. Adjusted EBITDA declined to $18.0 million in the third quarter 2020, versus $24.5 million for the same period in 2019. The Company generated $11.3 million in free cash flow during the third quarter 2020. VSE reduced total debt outstanding by $10.4 million during the third quarter 2020.
Aviation segment revenue, excluding the previously announced divestiture of Prime Turbines and CT Aerospace assets, declined 26.0% on a year-over-year basis in the third quarter 2020, as lower revenue passenger miles at major airline customers resulted in reduced commercial MRO activity. On a sequential quarter basis, excluding Prime Turbines and CT Aerospace, Aviation segment revenue increased 16.1%, supported by market share gains in our distribution business, and early indications of stabilization within the business and general aviation market customers. Federal & Defense segment revenue declined 21.7% on a year-over-year basis primarily due to the completion of a DoD program during the first quarter 2020. Fleet segment revenue increased 15.1% on a year-over-year basis due to growth within the commercial fleet business, together with a non-recurring order for personal protective equipment (PPE) from a government customer.
VSE continued to execute on a multi-year business transformation strategy during the third quarter, one that includes improved organizational design, rebranding and consolidation of business entities, new business development initiatives, the introduction of new products and services, and a continued focus on disciplined balance sheet management.
The following information was filed by Vse Corp (VSEC) on Thursday, October 29, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.