VSE Corp. (VSEC) Reports Q1 EPS of $0.89

VSE Corp. (NASDAQ: VSEC) reported Q1 EPS of $0.89, versus $0.68 reported last year. Revenue for the quarter came in at $177.4 million, versus $169.9 million reported last year.

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

MANAGEMENT COMMENTARY

“Our diversified business model, which supports both commercial and government aftermarket customers, is a unique competitive advantage for VSE as we move through the current cycle,” stated John Cuomo, President and CEO of VSE Corporation. “Our business is balanced between historically higher-growth, commercial-facing end markets, representing approximately 38% of revenue in first quarter 2020, together with long-term, often more stable multi-year government contracts representing approximately 62% of revenue. Although COVID-19 will have an adverse impact on our aviation business this year, we continue to view this market as a significant opportunity for VSE. In the interim, we expect revenue from our government-focused businesses and customers to help offset softness in the aerospace market. Looking ahead, we remain confident in the durability of our strategy and business model amidst current market volatility; a model that we believe positions us to emerge as an even stronger company in the years ahead.

“VSE delivered more than 30% year-over-year growth in adjusted net income during the first quarter, driven by a combination of new products and services, market share gains, increased engagement with existing customers, and improved contract type mix, together with disciplined margin and expense management,” continued Cuomo. “Our Aviation segment reported record first quarter revenue and adjusted EBITDA, supported by market share gains and sales from new products and repair capabilities.

“Our Federal & Defense business made significant progress in recent months, given the addition of new leadership and a strategic plan focused on developing a pipeline of long-term government contracts,” continued Cuomo. “In the last 60 days, we were awarded more than $90 million in government task orders and delivery orders, a testament to the efforts of our team and decades of experience servicing land, air and marine transportation assets.

“Despite the market challenges resulting from COVID-19, we expect to be profitable and free cash flow positive for the full-year 2020, supported by a combination of stable revenue and profit in our Federal & Defense and Fleet segments, together with disciplined expense management and targeted reductions in capital expenditures. Exiting the quarter, we had $176 million in cash and liquidity and total net debt of $273 million, or 2.9x trailing-twelve months adjusted EBITDA. Given our continued focus on disciplined balance sheet management, we reduced total debt outstanding by $30 million in March 2020,” concluded Cuomo.

For earnings history and earnings-related data on VSE Corp. (VSEC) click here.

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