VSE Corp. (VSEC) Tops Q1 EPS by 9c, Revenues Beat

VSE Corp. (NASDAQ: VSEC) reported Q1 EPS of $0.44, $0.09 better than the analyst estimate of $0.35. Revenue for the quarter came in at $165 million versus the consensus estimate of $153.29 million.

FIRST QUARTER 2021 RESULTS
(as compared to the First Quarter 2020)

• Total Revenues of $165.0 million declined 7.0%
• GAAP Net Income of $5.1 million increased 53.4%
• Adjusted Net Income of $5.3 million declined 45.6%
• Adjusted EBITDA of $15.6 million declined 31.5%

MANAGEMENT COMMENTARY

“We continued to leverage our unique value proposition across niche, high-value market verticals during the first quarter of 2021, while advancing our business transformation strategy through a combination of both organic and inorganic growth,” stated John Cuomo, President and CEO of VSE Corporation. “Our change management and business transformation initiatives have begun to yield tangible results, as evidenced by new business wins, expanded relationships with commercial and government customers, and improved organizational efficiency.”

“We remain highly focused on growing a backlog of higher-margin, multi-year contracts that position us to cross-sell our products and services into new and existing markets,” continued Cuomo. “Within our Aviation segment, we recently announced a $1 billion, 15-year agreement with a major engine manufacturer with the potential to generate approximately $60 million in annual revenue upon full implementation. This transaction significantly expands our customer base across more than 100 B&GA and regional aviation engine platforms, while providing stable, long-term contract revenue. Within our Federal and Defense segment, we recently announced more than $37 million in new contract awards with the both the U.S. Air Force and a U.S. Government foreign ally. In our Fleet segment, we continue to generate strong organic growth in commercial revenue. Collectively, these new wins reflect a sharpened organizational focus on new business development, while further validating our go-to-market strategies.”

“Aviation segment revenue within distribution returned to pre-pandemic levels during the first quarter, ahead of our market peers, supporting our third quarter of sequential revenue growth in the segment,” continued Cuomo. “While revenue passenger miles remain below historical levels, we anticipate that an increase in B&GA and commercial domestic travel will lead the recovery, creating new opportunities for our business as traffic levels improve into 2022.”

“VSE remains well-capitalized to support the ongoing growth of the business,” stated Stephen Griffin, CFO of VSE Corporation. “While our recently announced business wins will require working capital investments in new inventory during 2021, we anticipate significant returns on these investments in 2022 and beyond. Disciplined balance sheet management remains a priority for us and we anticipate that we will end 2021 in a similar leverage position as compared to 2020. We are targeting a long-term net leverage ratio of 2.5x.”

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

You May Also Be Interested In

• Fisker (FSR) files form 10-K, sees more job cuts, reiterates going concern doubts
• GXO Logistics, Inc. (GXO) Launches Notes Offering
• Tractor Supply (TSCO) Tops Q1 EPS by 12c ; Offers Guidance