Vse Corporation · NASDAQ:VSEC
Vse — Q2 2023 Earnings Presentation
16 slides from Vse's earnings presentation, Jul 27, 2023
Slide 1: Second Quarter 2023 Results Conference Call
VSEcorp.com Second Quarter 2023 Results Conference Call July 2023
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements This presentation contains statements that, to the extent they are not recitations of historical fact, constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchang
Slide 3: Q2 Business Update
Q2 Business Update Strong Program Execution and Market Share Gains Driving Record Financial Performance Aviation Fleet +19% Revenue Growth +24% Revenue Growth • Record sales results driven by strong execution on • Record revenue quarter driven by contributions from new and existing distribution prog
Slide 4: Recent Announcements / Strategic Update
Recent Announcements / Strategic Update Completed an Oversubscribed Follow-on Equity Offering Announced the Strategic Repositioning of the Business with Increased Exposure to Aviation Aftermarket Balance Sheet Optimization Repositioned portfolio Follow-on Equity Offering: Sale of Federal & Defense S
Slide 5: Q2 2023 Overview
Q2 2023 Overview > Total Revenue: $205M, +21% Y/Y Total VSE* > Net Income: $10M, +112% Y/Y > Adjusted EBITDA: $27M, +44% Y/Y > Revenue: $125M +19% Y/Y Aviation > Operating Income: $16M, +145% Y/Y > Adjusted EBITDA: $19M, +61% Y/Y > Revenue: $81M, +24% Y/Y Fleet > Operating Income: $8M, +46% Y/Y > Ad
Slide 6: VSE Financial Summary
VSE Financial Summary Quarter-to-Date Year-to-Date Revenue vs. ▪ Aviation +19% and Fleet +24% 2Q'23 2Q’22 YTD'23 YTD’22 vs. ($ in millions except EPS) 2Q’22 YTD’22 ▪ Commercial aviation end-markets remain robust; Continue to drive Revenue $205.2 $169.8 +21% $393.8 $330.1 +19% market share gains with
Slide 7: Consolidated Performance Bridge
Consolidated Performance Bridge Operating Adj. Adj. ▪ Aviation segment revenue and profit growth supported Revenue EBITDA Income EBITDA by strong program execution, expansion in distribution Margin % 2Q’22 QTD $169.8 $10.5 $18.3 10.8% product offerings and MRO capabilities, and margin- Aviation +19.
Slide 8: Aviation Segment
Aviation Segment Y/Y Comparisons: Quarter-to-Date Year-to-Date ▪ Revenue increased 19% to $125M in 2Q’23 2Q'23 2Q'22 vs. 2Q'22 2Q'23 2Q'22 vs. 2Q'22 vs. the prior-year period, driven by strong ($ in millions) program execution on new and existing $238.0 $198.3 +20% distribution awards and higher MRO
Slide 9: Fleet Segment
Fleet Segment Quarter-to-Date Year-to-Date Y/Y Comparisons: ▪ Revenue increased 24% to $80.5M in 2Q’23 ($ in millions) 2Q'23 2Q'22 vs 2Q’22 2Q'23 2Q'22 vs 2Q’22 vs. the prior-year period, driven by strong growth in e-commerce fulfillment, Revenue $80.5 $64.7 +24% $155.8 $131.8 +18% commercial fleet
Slide 10: Balance Sheet Optionality
Balance Sheet Optionality Quarter-to-Date ▪ Cash and unused commitment availability of $71M ▪ Initial inventory purchase for the Olive Branch distribution 2Q’23 1Q’23 facility is complete ($ in millions) Operating Cash Flow $(16.4) $(48.7) ▪ Capital allocation priorities include financing bolt-on ac
Slide 11: Entering Next Phase of VSE's Transformation
Entering Next Phase of VSE’s Transformation > Complete the sale of the Federal & Defense Services business Complete FDS Sale / > Ensure a smooth and successful transition for our employees and customers Reposition Business > 100% focus on aftermarket distribution and MRO services supporting aviation
Slide 12: Appendix
VSE CORPORATION P APPENDIX
Slide 13: GAAP to Non-GAAP Reconciliations: EBITDA and Adjusted EBITDA
GAAP to Non-GAAP Reconciliations EBITDA and Adjusted EBITDA (in thousands, except per share data) 1Q2022 2Q2022 1Q2023 2Q2023 Net income $ 6,289 $ 4,755 $ 8,120 $ 10,089 Interest expense, net 3,610 3,872 5,980 7,366 Income taxes 2,118 1,908 2,678 3,182 Amortization of intangible assets 4,094 4,016 3
Slide 14: GAAP to Non-GAAP Reconciliations: Adjusted Net Income and EPS
GAAP to Non-GAAP Reconciliations Adjusted Net Income and Adjusted EPS (Diluted) (in thousands, except per share data) 1Q2022 2Q2022 1Q2023 2Q2023 Income from continuing operations $ 6,289 $ 4,755 $ 8,120 $ 10,089 Adjustments: Acquisition, integration and restructuring costs 287 192 1,475 625 Non-rec
Slide 15: GAAP to Non-GAAP Reconciliations: Segment EBITDA
GAAP to Non-GAAP Reconciliations Segment EBITDA and Adjusted EBITDA (in thousands) 1Q2022 2Q2022 1Q 2023 2Q 2023 Aviation Operating income $ 7,622 $ 6,450 $ 15,663 $ 15,783 Depreciation and amortization 3,035 3,110 3,254 3,432 EBITDA 10,657 9,560 18,918 19,215 Acquisition, integration and restructur
Slide 16: GAAP to Non-GAAP Reconciliations: Balance Sheet
GAAP to Non-GAAP Reconciliations Balance Sheet Reconciliation of Operating Cash Flow to Free Cash Flows Three Months Ended (in thousands) 31-Mar-23 30-Jun-23 Net cash (used in) provided by operating activities $ (48,674) $ (16,374) Capital expenditures (2,840) (3,297) Free Cash Flow $ (51,514) $ (19