Slide 1: Second Quarter 2022 Results Conference Call
Second Quarter 2022 Results Conference Call July 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 Segments in 2Q22 Strategic Priorities Second Quarter 2022 Performance Transforming the Enterprise Generated Y/Y Growth in Revenue & Adjusted Net Income • Second quarter performance demonstrates VSE’s ability to effectively launch new • Total
Slide 4: VSE Financial Summary
VSE FINANCIAL SUMMARY Quarter-to-Date Year-to-Date • Revenue +38%, with growth in all 2Q'22 2Q’21 vs. YTD'22 YTD’21 vs. business segments driven by strong ($ in millions except EPS) 2Q'21 YTD'21 demand and execution: Aviation Revenue $241.7 $175.1 +38% $473.0 $340.1 +39% +121%, Fleet +12%, Federal &
Slide 5: Consolidated Performance Bridge
CONSOLIDATED PERFORMANCE BRIDGE Adj. EBITDA Y/Y comparisons: Revenue Adj. EBITDA Margin % 2Q’21 QTD $175.1 $18.9 10.8% • Aviation segment revenue and profit Aviation 57.5 7.9 +0.7 pts increased; 8th consecutive quarter of segment Fleet 6.6 0.8 — revenue growth FDS 2.5 (4.7) (2.0) pts Corporate — — —
Slide 6: Aviation Segment
AVIATION SEGMENT Y/Y comparisons: Quarter-to-Date Year-to-Date • Revenue +121% led by organic growth from 2Q'22 2Q'21 vs. 2Q'21 recent distribution awards and contributions ($ in millions) 2Q'22 2Q'21 vs. 2Q'21 from Global Parts acquisition in July 2021 Revenue $105.0 $47.5 +121% $198.3 $91.9 +116%
Slide 7: Fleet Segment
FLEET SEGMENT Y/Y comparisons: Quarter-to-Date Year-to-Date • Revenue +12% driven by growth in ($ in millions) 2Q'22 2Q'21 vs 2Q’21 2Q'22 2Q'21 vs 2Q’21 commercial and e-commerce sales, offset by anticipated DoD declines. Revenue $64.7 $58.1 +12% $131.8 $112.8 +17% Adjusted EBITDA $7.7 $7.0 +10% $16
Slide 8: Federal & Defense Segment
FEDERAL & DEFENSE SEGMENT Y/Y comparisons: Quarter-to-Date Year-to-Date • Revenue increased +3% driven ($ in millions) 2Q'22 2Q'21 vs 2Q’21 2Q'22 2Q'21 vs 2Q’21 by U.S. Navy growth, partially offset by U.S. Army contract completion Revenue $72.0 $69.5 +3% $142.9 $135.4 +6% • Adjusted EBITDA decline
Slide 9: Balance Sheet Optionality
BALANCE SHEET OPTIONALITY • Sufficient liquidity of $91M cash and unused ($ in millions) 2Q’22 4Q’21 commitment availability under $350M revolving credit facility (due 2024) to support growth initiatives Net Debt $308 $284 • Net Debt increased in 2Q’22 with $(3.4M) free cash flow driven by completio
Slide 10: Appendix
YVWSE APPENDIX 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 2Q2022 Net income (loss) $ 5,111 $ (12,366) $ 9,021 $ 6,200 $ 6,244 $ 7,548 Adjustments to net income (loss): Acquisition, integration and restruct
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 2Q2022 Net income (loss) $ 5,111 $ (12,366) $ 9,021 $ 6,200 $ 6,244 $ 7,548 Interest expense, net 3,030 2,666 2,780 3,593 3,609 3,872 Income taxes 1,462 (3,014) 2,091
Slide 13: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS Segment EBITDA and Adjusted EBITDA (in thousands) 1Q2021 2Q2021 3Q2021 4Q2021 1Q2022 2Q2022 Aviation Operating income (loss) $ (332) $ (22,272) $ 3,719 $ 4,512 $ 7,622 $ 6,450 Depreciation and amortization 2,554 2,554 3,062 2,898 3,035 3,110 EBITDA 2,222 (19,718) 6,7
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 30-Jun-22 Net cash (used in) provided by operating activities $ (36,367) $ (17,601) $ 23,445 $ 12,921 $ (18,174)
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 Strate