Vse Corporation · NASDAQ:VSEC
Vse — Q2 2021 Earnings Presentation
15 slides from Vse's earnings presentation, Jul 29, 2021
Slide 1: Second Quarter 2021 Results Conference Call
Second Quarter 2021 Results Conference Cal l
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
2 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 Exchange Act. All such statement
Slide 3: Executive Summary
RAISE THE BAR 3 EXECUTIVE SUMMARY Revenue Diversification Progress in All Business Segments • Aviation: Organic/inorganic investments supporting Commercial and Business & General Aviation (B&GA) expansion • Fleet: Aftermarket distribution growth within commercial and e-commerce channels • Federal: D
Slide 4: Global Parts Group Acquisition
RAISE THE BAR 4 GLOBAL PARTS GROUP ACQUISITION • 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) customers • Global Parts’ distribution business focuses on supporting airframe component
Slide 5: VSE Financial Summary
RAISE THE BAR • 2Q’21 revenue of $175M increased 18% y/y(1) • Sequential Q/Q revenue growth across all business segments: Aviation +7%; Federal & Defense +6%; Fleet +6% • 2Q’21 Adjusted EBITDA increase y/y driven by organic and inorganic revenue/margin growth in Aviation and Federal & Defense, offse
Slide 6: Consolidated Performance Bridge
RAISE THE BAR 6 CONSOLIDATED PERFORMANCE BRIDGE Q/Q Comparisons: • Aviation segment revenue and profit increased, with four quarters of sequential growth supported by both market share gains and aviation recovery, specifically in the business and general aviation (B&GA) market • Federal & Defense (F
Slide 7: Aviation Segment
RAISE THE BAR • 2Q’21 revenue increased +52% versus same period of 2020, excluding the contribution of CT Aerospace divestiture • 2Q’21 Aviation revenue increased +7% sequentially, led by growth in Distribution • Adjusted EBITDA increase +240% y/y driven by organic sales growth and improved profit c
Slide 8: Fleet Segment
RAISE THE BAR • 2Q’21 revenue increased +12% versus same period of 2020, excluding the 2020 non- recurring PPE order revenue, supported by Commercial fleet growth, specifically through e-commerce channels(1) • 2Q’21 revenue increased +6% sequentially, driven by commercial fleet revenue growth • Marg
Slide 9: Federal & Defense Segment
RAISE THE BAR • Y/Y revenue increases supported by HAECO Special Services (HSS) acquisition and increased market penetration with existing customers; +7% y/y • 2Q’21 revenue increased +6% sequentially, led by strong revenue performance on U.S. Navy program and HSS contribution • Expanded market focu
Slide 10: Balance Sheet Optionality
RAISE THE BAR • July 2021: Amended and extended existing debt agreement(s) with existing bank group • Extended loan maturity date to July 2024 • Reduced LIBOR rate floor • Reset term loan amortization • Created flexibility on key covenants • $(20.6M) Free Cash Flow in 2Q’21 driven by investments in
Slide 11: Appendix
VSE APPENDIX CORPORATION
Slide 12: GAAP to Non-GAAP Reconciliations: Adjusted Net Income and Adjusted EPS
RAISE THE BAR 12 GAAP TO NON-GAAP RECONCILIATIONS Adjusted Net Income and Adjusted EPS (Diluted) (1) Calculation uses an estimated statutory tax rate on non-GAAP tax deductible adjustments. In thousands (except per share data) 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 Net income (loss) $ 3,332 $ (22
Slide 13: GAAP to Non-GAAP Reconciliations: EBITDA and Adjusted EBITDA
RAISE THE BAR 13 GAAP TO NON-GAAP RECONCILIATIONS EBITDA and Adjusted EBITDA In thousands (except per share data) 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 Net income (loss) $ 3,332 $ (22,624) $ 8,108 $ 6,013 $ 5,111 $ (12,366) Interest expense, net 3,486 3,072 3,530 3,408 3,030 2,666 Income taxes 2
Slide 14: GAAP to Non-GAAP Reconciliations: Segment EBITDA and Adjusted EBITDA
RAISE THE BAR 14 GAAP TO NON-GAAP RECONCILIATIONS Segment EBITDA and Adjusted EBITDA In thousands 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2021 Aviation Operating income (loss) $ (1,880) $ (34,387) $ 1,586 $ (833) $ (332) $ (22,272) Depreciation and amortization 3,066 2,472 2,493 2,667 2,554 2,554 EBITD
Slide 15: GAAP to Non-GAAP Reconciliations: Balance Sheet
RAISE THE BAR 15 GAAP TO NON-GAAP RECONCILIATIONS Balance Sheet (1) TTM Adjusted EBITDA is defined as Adjusted EBITDA for the most recent twelve (12) month period 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-2