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
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: Strong Momentum Throughout 2021
STRONG MOMENTUM THROUGHOUT 2021 Accelerated Strategy and Growth Highlighted by Aviation +50% year-over-year AVIATION FLEET Commercial Capabilities Positioned for Growth Commercial Diversification Supports Growth Diverse portfolio of OEM-centric products, exchanges, Accelerated commercial revenue cha
Slide 4: Executive Summary
EXECUTIVE SUMMARY Strong Transformation Progress and Positive 4Q’21 Results Business Transformation Update Fourth Quarter 2021 Performance Capital Allocation and Strong M&A Success Generated y/y growth in revenue, adj. net income & adj. EBITDA • Disciplined approach to M&A with assets integrated int
Slide 5: VSE Financial Summary
VSE FINANCIAL SUMMARY Quarter-to-Date Year-to-Date • Revenue vs. vs. • +40% 4Q2021 Y/Y and 4Q'21 4Q'20 4Q'20 2021 2020 2020 • +20% 2021 Y/Y(1) ($ in millions except EPS) Revenue $210.2 $150.0 +40% $750.9 $661.7 +13% • 4Q’21 Y/Y revenue growth across Adjusted EBITDA $17.8 $17.3 +3% $73.6 $75.2 (2)% A
Slide 6: Consolidated Performance Bridge
CONSOLIDATED PERFORMANCE BRIDGE Fourth Quarter 2021: Revenue Adj. EBITDA Adj. EBITDA Margin % • Aviation segment revenue and profit increased, with continued sequential revenue and profit growth every quarter since 2Q’20 4Q'20 $150.0 $17.3 11.5% Aviation 44.3 6.4 +0.7 pts • Fleet segment revenue gro
Slide 7: Aviation Segment
AVIATION SEGMENT Vs. Vs. • Revenue +115% 4Q’21 Y/Y and +50% 2021 Y/Y 4Q'21 4Q'20 2021 2020 ($ in millions) (+59% excluding Prime/CT divestitures (1)) led by growth in distribution business currently operating Revenue $82.8 +115% $247.9 +50% above pre-pandemic levels, and supported by acquisition of
Slide 8: Fleet Segment
FLEET SEGMENT 4Q'21 vs 2021 vs 4Q'20 2020 ($ in millions) • Revenue +12% in 4Q’21 driven by Revenue $60.5 +12% $233.5 (4)% +61% growth in commercial and e- Adjusted Revenue(1) $60.5 +12% $233.5 +8% commerce sales, flat USPS, and offset by declines in DoD revenue Adjusted EBITDA $7.6 (10)% $30.5 (17)
Slide 9: Federal & Defense Segment
FEDERAL & DEFENSE SEGMENT 4Q'21 vs 2021 vs 4Q'20 2020 ($ in millions) • Revenue increased +16% 4Q’21 Y/Y Revenue $66.9 +16% $269.5 +6% supported by HSS acquisition, Adjusted EBITDA $3.6 (58)% $24.0 (18)% partially offset by expiration of Army Adjusted EBITDA % 5.3% (9.4)pts 8.9% (2.5)pts contract an
Slide 10: Balance Sheet Optionality
BALANCE SHEET OPTIONALITY • Sufficient liquidity profile with $122M cash and unused commitment availability under 4Q'21 4Q'20 ($ in millions) $350M revolving credit facility (due 2024) Net Debt $284 $251 • Net Debt decrease in 4Q’21 with positive free cash flow generation of $10.0M; Majority of Free
Slide 11: Appendix
YVS-E- APPENDIX CORPORATION
Slide 12: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS Adjusted Net Income and Adjusted EPS (Diluted) (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 Adjustments to Net income (loss): Acqu
Slide 13: GAAP to Non-GAAP Reconciliations
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, net 3,486 3,072 3,530 3,408 3,030 2,666
Slide 14: GAAP to Non-GAAP Reconciliations
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 amortization 3,066 2,472 2,493 2,667 2,
Slide 15: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS Balance Sheet Reconciliation of Operating Cash Flow to Free Cash Flows Three Months Ended (in thousands) 31-Mar-20 30-Jun-20 30-Sep-20 31-Dec-20 31-Mar-21 30-Jun-21 30-Sep-21 31-Dec-21 Net cash (used in) provided by operating activities $ 6,758 $ 16,050 $ 12,427 $ 52
Slide 16: VSE Executive Team
VSE EXECUTIVE TEAM Background & Responsibilities Background & Responsibilities • 21+ years of aerospace distribution and • 12+ years of senior finance leadership, services market industry experience most recently as CFO for GE Aviation Engine Services • Appointed Chief Executive Officer and Presiden
Slide 17: Investment Highlights
INVESTMENT HIGHLIGHTS Pure-play independent aftermarket service provider with strong organic & inorganic growth opportunities Global provider of aftermarket distribution, maintenance, repair, and overhaul (“MRO”), and other services 62+ Years Aftermarket 3 Distinct ~2,400 Services End Markets Employ
Slide 18: Aviation Segment Overview
AVIATION SEGMENT OVERVIEW Refocused Strategy: Higher growth, higher-margin commercial and B&GA distribution and MRO Key Capabilities Growth Drivers Representative Customers MRO Capability Development Commercial and business & general aviation proprietary • New MRO offerings to support range of com
Slide 19: Fleet Segment Overview
FLEET SEGMENT OVERVIEW Refocused Strategy: High growth Class 4-8 commercial distribution and e-commerce Key Capabilities Growth Drivers Representative Customers High-duty cycle, Class 4-8 (medium Commercial Customer Diversification to heavy) vehicle parts distribution • Expansion of commercial cus
Slide 20: Federal & Defense Segment Overview
FEDERAL & DEFENSE SEGMENT OVERVIEW Refocused Strategy: Higher margin, differentiated supply chain, MRO and technical services Key Capabilities Growth Drivers Representative Customers Transportation asset MRO Market Expansion services • Increase military aviation services with products, supply chai
Slide 21: Unique Value Proposition
UNIQUE VALUE PROPOSITION Differentiation drives market share gains, long-term sustainable revenue & margin expansion Pure-Play Aftermarket Transportation Asset Experience Uniquely positioned in the market as Support for land, sea, and air transportation assets independent parts and services provider
Slide 22: Investment Opportunity
INVESTMENT OPPORTUNITY Unique pure-play independent aftermarket services company poised for growth WELL-BALANCED BUSINESS SEGMENTS MISSION-CRITICAL STRONG CUSTOMER AFTERMARKET SERVICES RELATIONSHIPS FRAGMENTED CULTURAL TRANSFORMATION END-MARKETS DRIVING GROWTH NEW EXPERIENCED MANAGEMENT TEAM Strateg