Slide 1: First Quarter 2022 Results Conference Call
First Quarter 2022 Results Conference Call April 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: Executive Summary
EXECUTIVE SUMMARY Year-over-year Revenue Growth Across All Reporting Segments in 1Q22 Strategic Priorities First Quarter 2022 Performance Transforming the Enterprise Generated Y/Y Growth in Revenue and Adjusted Net Income • Continued progress in development of a high-performance culture to drive mar
Slide 4: VSE Financial Summary
VSE FINANCIAL SUMMARY 1Q'22 vs. 1Q'21 ($ in millions except EPS) Revenue $231.2 +40% Y/Y comparisons: Adjusted EBITDA $22.2 +43% • Revenue +40%, with growth in all business segments Adjusted EBITDA % 9.6% +0.2 pts driven by strong demand and execution: Aviation +110%, Fleet +22%, Federal & Defense +
Slide 5: Consolidated Performance Bridge
CONSOLIDATED PERFORMANCE BRIDGE Adj. EBITDA Y/Y comparisons: Revenue Adj. EBITDA Margin % • Aviation segment revenue and profit increased, segment revenue 1Q'21 $165.0 $15.6 9.4% and adjusted EBITDA grew sequentially every quarter since 2Q’20 Aviation 48.9 8.7 +1.9 pts • Fleet segment revenue growth
Slide 6: Aviation Segment
AVIATION SEGMENT ($ in millions) 1Q'22 vs. 1Q'21 Y/Y comparisons: Revenue $93.3 +110% • Revenue +110% led by growth in distribution business channel and contributions by acquisition of Adjusted EBITDA $10.9 +389% Global Parts in July 2021 Adjusted EBITDA % 11.6% +6.6 pts • Aviation distribution and
Slide 7: Fleet Segment
FLEET SEGMENT ($ in millions) 1Q'22 vs. 1Q'21 Y/Y comparisons: Revenue $67.0 +22% • Revenue +22% driven by growth in commercial and e-commerce sales, offset by DoD declines. Adjusted EBITDA $8.8 +9% • Continuing to diversify revenue as Commercial Adjusted EBITDA % 13.1% (1.6)pts comprises 42% of tot
Slide 8: Federal & Defense Segment
FEDERAL & DEFENSE SEGMENT 1Q'22 Vs.1Q'21 Y/Y comparisons: ($ in millions) • Revenue increased +8% driven by Aircraft Revenue $70.9 +8% Maintenance and Modernization program Adjusted EBITDA $3.8 (35)% contributions, U.S. Navy growth, partially offset by U.S. Army contract expirations Adjusted EBITDA
Slide 9: Balance Sheet Optionality
BALANCE SHEET OPTIONALITY ($ in millions) 1Q’22 4Q’21 • Sufficient liquidity of $100M cash and unused commitment availability under $350M revolving credit Net Debt $303 $284 facility (due 2024) to support growth initiatives Free Cash Flow $(19.4) $10.0 • Net Debt increase in 1Q’22 with $(19.4) free
Slide 10: Appendix
100} VS5E nr CORPORATION
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) 1Q2021 2Q2021 3Q2021 4Q2021 1Q2022 Net income (loss) $ 5,111 $ (12,366) $ 9,021 $ 6,200 $ 6,244 Adjustments to net income (loss): Acquisition, integration and restructuring costs 310
Slide 12: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS EBITDA and Adjusted EBITDA (in thousands, except per share data) 1Q2021 2Q2021 3Q2021 4Q2021 1Q2022 Net income (loss) $ 5,111 $ (12,366) $ 9,021 $ 6,200 $ 6,244 Interest expense, net 3,030 2,666 2,780 3,593 3,609 Income taxes 1,462 (3,014) 2,091 946 2,061 Amortizatio
Slide 13: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS Segment EBITDA and Adjusted EBITDA (in thousands) 1Q2021 2Q2021 3Q2021 4Q2021 1Q2022 Aviation Operating income (loss) $ (332) $ (22,272) $ 3,719 $ 4,512 $ 7,622 Depreciation and amortization 2,554 2,554 3,062 2,898 3,035 EBITDA 2,222 (19,718) 6,781 7,410 10,657 Acqui
Slide 14: 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-21 30-Jun-21 30-Sep-21 31-Dec-21 31-Mar-22 Net cash (used in) provided by operating activities $ (36,367) $ (17,601) $ 23,445 $ 12,921 $ (18,174) Capital e
Slide 15: 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 63+ Years Aftermarket 3 Distinct ~2,000 Services End Markets Employ
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: 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: 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 21: 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