Slide 1: Fourth Quarter 2021 Results Conference Call
Fourth Quarter 2021 Results Conference Call March 2022
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
R A I S E T H E B A R 2 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 Exchange A
Slide 3: Strong Momentum Throughout 2021
R A I S E T H E B A RRAISE THE BAR AVIATION B&GA Growth & Program Execution Drive 2021 Expanded MRO and distribution to cover tip-to-tail including engine accessories, airframe and avionics • 15-year Pratt & Whitney Canada, $1B agreement • Global OEM - $125 million, 5-year agreement • New OEM-author
Slide 4: Executive Summary: Fourth Quarter 2021 Performance
R A I S E T H E B A RRAISE THE BAR 4 EXECUTIVE SUMMARY Generated y/y growth in revenue, adj. net income & adj. EBITDA • Total revenue +40% y/y, revenue growth in all 3 segments • 17% y/y growth in adjusted net income • 3% y/y growth in adjusted EBITDA Aviation supported by strong growth across distr
Slide 5: VSE Financial Summary
R A I S E T H E B A RRAISE THE BAR • Revenue • +40% 4Q2021 Y/Y and • +20% 2021 Y/Y(1) • 4Q’21 Y/Y revenue growth across ALL business segments: • Aviation +115% • Fleet +12% • Federal & Defense +16% • Adjusted EBITDA increase +3% 4Q’21 Y/Y and (2)% 2021 Y/Y driven by organic and inorganic revenue/mar
Slide 6: Consolidated Performance Bridge
R A I S E T H E B A RRAISE THE BAR 6 CONSOLIDATED PERFORMANCE BRIDGE Fourth Quarter 2021: • Aviation segment revenue and profit increased, with continued sequential revenue and profit growth every quarter since 2Q’20 • Fleet segment revenue growth supported by higher sales in commercial fleet and e-
Slide 7: Aviation Segment
R A I S E T H E B A RRAISE THE BAR • Revenue +115% 4Q’21 Y/Y and +50% 2021 Y/Y (+59% excluding Prime/CT divestitures (1)) led by growth in distribution business currently operating above pre-pandemic levels, and supported by acquisition of Global Parts in July 2021 • Adjusted EBITDA +464% 4Q’21 Y/Y
Slide 8: Fleet Segment
R A I S E T H E B A RRAISE THE BAR • Revenue +12% in 4Q’21 driven by +61% growth in commercial and e- commerce sales, flat USPS, and offset by declines in DoD revenue • Revenue diversification focus continues as Commercial represents 32% of total Fleet revenue in 2021 compared to 18% in 2020 • Full
Slide 9: Federal & Defense Segment
R A I S E T H E B A RRAISE THE BAR • Revenue increased +16% 4Q’21 Y/Y supported by HSS acquisition, partially offset by expiration of Army contract and supply chain related disruptions • Adjusted EBITDA decline due to anticipated contract mix shift from fixed price to cost plus on a large military p
Slide 10: Balance Sheet Optionality
R A I S E T H E B A RRAISE THE BAR • Sufficient liquidity profile with $122M cash and unused commitment availability under $350M revolving credit facility (due 2024) • Net Debt decrease in 4Q’21 with positive free cash flow generation of $10.0M; Majority of new Aviation distribution initial provisio
Slide 11: Appendix
0, VG | APPENDIX CORPORATION
Slide 12: GAAP to Non-GAAP Reconciliations: Adjusted Net Income and EPS
R A I S E T H E B A RRAISE THE BAR 12 GAAP TO NON-GAAP RECONCILIATIONS Adjusted Net Income and Adjusted EPS (Diluted) (1) Calculation uses an estimated statutory tax rate on non-GAAP tax deductible adjustments. (in thousands, except per share data) 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 4Q
Slide 13: GAAP to Non-GAAP Reconciliations: EBITDA and Adjusted EBITDA
R A I S E T H E B A RRAISE THE BAR 13 GAAP TO NON-GAAP RECONCILIATIONS EBITDA and Adjusted EBITDA (in thousands, except per share data) 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Net income (loss) $ 3,332 $ (22,624) $ 8,108 $ 6,013 $ 5,111 $ (12,366) $ 9,021 $ 6,200 Interest expense, ne
Slide 14: GAAP to Non-GAAP Reconciliations: Segment EBITDA
R A I S E T H E B A RRAISE THE BAR 14 GAAP TO NON-GAAP RECONCILIATIONS Segment EBITDA and Adjusted EBITDA (in thousands) 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 4Q2021 Aviation Operating income (loss) $ (1,880) $ (34,387) $ 1,586 $ (833) $ (332) $ (22,272) $ 3,719 $ 4,512 Depreciation and a
Slide 15: GAAP to Non-GAAP Reconciliations: Balance Sheet
R A I S E T H E B A RRAISE THE BAR 15 GAAP TO NON-GAAP RECONCILIATIONS Balance Sheet (1) TTM Adjusted EBITDA is defined as Adjusted EBITDA for the most recent twelve (12) month period Reconciliation of Operating Cash Flow to Free Cash Flows Three Months Ended (in thousands) 31-Mar-20 30-Jun-20 30-Se
Slide 16: VSE Senior Leadership
R A I S E T H E B A R VSE Senior Leadership 16 VSE EXECUTIVE TEAM John Cuomo President and CEO • 21+ years of aerospace distribution and services market industry experience • Appointed Chief Executive Officer and President of VSE Corporation in 2019 • Previously served as Vice President and General
Slide 17: Investment Highlights
R A I S E T H E B A R 17 INVESTMENT HIGHLIGHTS 3 Distinct End Markets $30M Adj. Net Income ~2,400 Employees $751M Revenue 62+ Years Aftermarket Services Pure-play independent aftermarket service provider with strong organic & inorganic growth opportunities $74M Adj. EBITDA Global provider of afterma
Slide 18: Aviation Segment Overview
R A I S E T H E B A R Representative Customers 18 AVIATION SEGMENT OVERVIEW MRO Capability Development • New MRO offerings to support range of components and engine accessory repairs including: fuel and hydraulics, engine components and accessories, interiors, auxiliary power units, and avionics Dis
Slide 19: Fleet Segment Overview
R A I S E T H E B A R 19 FLEET SEGMENT OVERVIEW Commercial Customer Diversification • Expansion of commercial customer base to support new medium to large, high-duty cycle fleet customers Wallet Share Expansion • Product expansion to existing just-in-time clients E-commerce • Customized technology p
Slide 20: Federal & Defense Segment Overview
R A I S E T H E B A R 20 FEDERAL & DEFENSE SEGMENT OVERVIEW Market Expansion • Increase military aviation services with products, supply chain and repair services Capability Development • Broaden DoD logistics and supply chain offering to support underserved market demand International Growth • Util
Slide 21: Unique Value Proposition
R A I S E T H E B A R 21 UNIQUE VALUE PROPOSITION Differentiation drives market share gains, long-term sustainable revenue & margin expansion End-User and OEM-Centric Ability to offer bespoke solutions to support critical link between end-users and Original Equipment Manufacturers (“OEMs”) Agility L
Slide 22: Investment Opportunity
R A I S E T H E B A R 22 INVESTMENT OPPORTUNITY Unique pure-play independent aftermarket services company poised for growth Strategic Market Positioning, Strong Growth Strategy, Proven Execution Experience MISSION-CRITICAL AFTERMARKET SERVICES CULTURAL TRANSFORMATION DRIVING GROWTH STRONG CUSTOMER R