Slide 1: Third Quarter 2021 Results Conference Call
T h i rd Q u a r te r 2 0 2 1 Re s u l t s C o n fe re n c e C a l l October 2021
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: Executive Summary
EXECUTIVE SUMMARY Third Quarter 2021 Business Transformation Update 3rd Quarter 2021 Performance Performance-driven culture focused on sustained execution Generated y/y growth in revenue, adjusted net income & adjusted EBITDA • New program executions on target and supporting organic growth • All rep
Slide 4: VSE Financial Summary
VSE FINANCIAL SUMMARY Quarter-to-Date Year-to-Date 3Q'21 3Q'20 2Q'21 vs vs YTD '21 YTD '20 vs • 3Q’21 revenue of $200.6M ($ in millions except EPS) 3Q'20 2Q'21 YTD '20 increased +27% y/y(1) Revenue $200.6 $165.5 $175.1 +21% +15% $540.7 $511.6 +6% Adjusted EBITDA $21.4 $18.0 $18.9 +19% +13% $55.7 $57
Slide 5: Consolidated Performance Bridge
CONSOLIDATED PERFORMANCE BRIDGE Q/Q comparisons: Revenue Adj. EBITDA Adj. EBITDA Margin % • Aviation segment revenue and profit increased, with continued sequential growth every quarter from 2Q’20, supported by share gains, ongoing market recovery, and 2Q'21 $175.1 $18.9 10.8% Global Parts acquisiti
Slide 6: Aviation Segment
AVIATION SEGMENT 3Q'21 vs vs YTD '21 vs 3Q'20 2Q'21 YTD '20 • Y/Y revenue +102% supported by recently ($ in millions) initiated distribution contract wins and Revenue $73.1 +102% +54% $165.0 +30% acquisition of Global Parts Revenue, less divestitures (1) $73.1 +102% +54% $165.0 +40% • 3Q’21 Aviation
Slide 7: Fleet Segment
FLEET SEGMENT 3Q'21 vs vs YTD '21 vs 3Q'20 2Q'21 YTD '20 ($ in millions) • 3Q’21 revenue +6% versus same period of Revenue $60.3 (5)% +4% $173.1 (8)% 2020, excluding the 2020 non-recurring Adjusted EBITDA $7.7 (14)% +10% $22.9 (19)% PPE order revenue, supported by e- commerce fulfillment business gr
Slide 8: Federal & Defense Segment
FEDERAL & DEFENSE SEGMENT 3Q'21 vs vs YTD '21 vs 3Q'20 2Q'21 YTD '20 • Y/Y revenue increased +2% supported by ($ in millions) HSS acquisition, partially offset by Revenue $67.2 +2% (3)% $202.6 +3% expiration of large Army contract Adjusted EBITDA $6.5 (12)% (20)% $20.4 (1)% • Y/Y Adjusted EBITDA dec
Slide 9: Balance Sheet Optionality
BALANCE SHEET OPTIONALITY 3Q'21 3Q'20 2Q'21 • Strong liquidity profile with $117M cash and ($ in millions) unused commitment availability under $350M Net Debt $294 $250 $275 revolving credit facility due 2024 Free Cash Flow $21.0 $11.3 $(20.6) • Net Debt increase of $19M in 3Q’21 primarily Net lever
Slide 10: Appendix
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Slide 11: 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 Net income (loss) $ 3,332 $ (22,624) $ 8,108 $ 6,013 $ 5,111 $ (12,366) $ 9,021 Adjustments to Net income (loss): Acquisition and res
Slide 12: 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 Net income (loss) $ 3,332 $ (22,624) $ 8,108 $ 6,013 $ 5,111 $ (12,366) $ 9,021 Interest expense, net 3,486 3,072 3,530 3,408 3,030 2,666 2,780 Income ta
Slide 13: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS Segment EBITDA and Adjusted EBITDA (in thousands) 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 3Q2021 Aviation Operating income (loss) $ (1,880) $ (34,387) $ 1,586 $ (833) $ (332) $ (22,272) $ 3,719 Depreciation and amortization 3,066 2,472 2,493 2,667 2,554 2,554 3,062
Slide 14: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS Balance Sheet Reconciliation of Operating Cash Flow to Free Cash Flow 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 Net cash (used in) provided by operating activities $ 6,758 $ 16,050 $ 12,427 $ 526 $ (36,367
Slide 15: VSE Executive Team
VSE EXECUTIVE TEAM Background & Responsibilities Background & Responsibilities • 20+ years of aerospace distribution and • 11+ 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 16: 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 60+ Years Aftermarket 3 Distinct ~2,200 Services End Markets Employ
Slide 17: 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 18: 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 19: 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 20: Global Parts Group Acquisition
GLOBAL PARTS GROUP ACQUISITION Acquired for approximately $38 million on July 26, 2021 Acquisition Overview Global Parts Group, Inc. • Global Parts is a fully integrated aftermarket distribution and MRO services provider serving a diverse base of more than 3,000 Business & General Aviation (B&GA) cu
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