Slide 1: Second Quarter 2024 Results Conference Call
Second Quarter 2024 Results Conference Call August 1, 2024 vsecorp.com
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Introduction 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 o
Slide 3: 2024 Operating Plan Update – A Year of Focused Execution
VSE Corporation 2024 Operating Plan Update – A Year of Focused Execution Aviation Fleet Corporate ▪ European Distribution Expansion: ▪ Strategic Review Update ▪ Completed Follow-on Equity Offering ▪ Pratt Whitney Canada Europe Middle- ▪ Strategic Review in process with ▪ In May 2024, VSE completed a
Slide 4: Q2 2024 Business Segment Update
VSE Corporation Q2 2024 Business Segment Update Aviation Fleet +55% Revenue Growth (9)% Revenue Decline • Record sales driven by balanced execution from both • Revenue decline driven by a reduction in USPS revenue channels (distribution and MRO) and maintenance repair volume, partially offset by gro
Slide 5: VSE Financial Summary
VSE Corporation VSE Financial Summary Revenue Quarter-to-Date Year-to-Date ▪ Aviation +55% and Fleet (9)% 2Q'24 2Q’23 vs. 2Q'24 2Q’23 vs. ▪ Aviation: Record revenue and profitability ($ in millions except EPS) 2Q’23 2Q’23 driven by strong distribution program execution, expanded portfolio of MRO Rev
Slide 6: Consolidated Performance Bridge
VSE Corporation Consolidated Performance Bridge Operating Adj. Adj. Revenue Income EBITDA EBITDA Margin % 2Q’23 QTD $205.2 $20.6 $26.5 12.9% ▪ Aviation segment revenue and profit growth supported Aviation +68.1 +8.7 +11.8 +1.1 pts by strong program execution, execution on distribution Fleet (7.4) (5
Slide 7: Aviation Segment
Aviation Segment Aviation Segment Y/Y Comparisons: Quarter-to-Date Year-to-Date ▪ Revenue +55% to a record $193M in 2Q’24 vs. the prior-year period, driven by strong 2Q'24 2Q'23 vs. 2Q'23 2Q'24 2Q'23 vs. 2Q'23 execution on existing distribution programs, ($ in millions) scaling of new awards, expand
Slide 8: Fleet Segment
Fleet Segment Fleet Segment Quarter-to-Date Year-to-Date Y/Y Comparisons: ▪ Revenue (9)% to $73M in 2Q’24 vs. the ($ in millions) 2Q'24 2Q'23 vs 2Q’23 2Q'24 2Q'23 vs 2Q’23 prior-year period, driven by a decrease in USPS repair activity, partially offset by Revenue $73.1 $80.5 (9)% $152.3 $155.8 (2)%
Slide 9: Balance Sheet Optionality
Balance Sheet Balance Sheet Optionality Quarter-to-Date 2Q’24 1Q’24 ▪ Pro forma net leverage is 3.2x as of 2Q’24 ($ in millions) Operating Cash Flow $(18) $(79) ▪ Pro forma net leverage is expected to improve by year-end, driven by stronger free cash flow Free Cash Flow $(21) $(87) generation in sec
Slide 10: 2024 Priorities to Growth and Accelerate Transformation Strategy
2024 Priorities 2024 Priorities to Growth and Accelerate Transformation Strategy > European Expansion: Pratt & Whitney Program and Product Line Expansion Implementations within new Europe (Germany) Distribution Center-of-Excellence > Fuel Control Manufacturing Program Implementation Aviation Segment
Slide 11: Appendix
Appendix vsecorp.com
Slide 12: GAAP to Non-GAAP Reconciliations: EBITDA and Adjusted EBITDA
Appendix GAAP to Non-GAAP Reconciliations EBITDA and Adjusted EBITDA ($ in thousands, except per share data) Three months ended June 30, 2024 2023 % Change Net income (loss) $ (2,777) $ 10,089 (127.5)% Interest expense, net 9,826 7,366 33.4% Income taxes (917) 3,182 (128.8)% Amortization of intangib
Slide 13: GAAP to Non-GAAP Reconciliations: Adjusted Net Income and EPS
Appendix GAAP to Non-GAAP Reconciliations Adjusted Net Income and Adjusted EPS (Diluted) Three months ended June 30, ($ in thousands, except per share data) 2024 2023 % Change Net (loss) Income from continuing operations $ (2,777) $ 10,089 (127.5)% Adjustments: Acquisition, integration and restructu
Slide 14: GAAP to Non-GAAP Reconciliations: Segment EBITDA
Appendix GAAP to Non-GAAP Reconciliations Segment EBITDA and Adjusted EBITDA Three months ended June 30, ($ in thousands) 2024 2023 % Change Aviation Operating income $ 24,468 $ 15,783 55.0% Depreciation and amortization 6,034 3,432 75.8% EBITDA 30,502 19,215 58.7% Acquisition, integration and restr
Slide 15: GAAP to Non-GAAP Reconciliations: Balance Sheet
Appendix GAAP to Non-GAAP Reconciliations Balance Sheet Reconciliation of Operating Cash Flow to Free Cash Flows ($ in thousands) June 30, 2024 March 31, 2024 Net cash (used in) provided by operating activities $(17,528) $(79,060) Capital expenditures (3,945) (7,729) Free Cash Flow $(21,473) $(86,78