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VSE Corporation Announces Second Quarter 2025 Results
Record Revenue and Record Profitability
Reaffirms 2025 Revenue Guidance and Increases Aviation Adjusted EBITDA Margin Guidance

MIRAMAR, FLORIDA, July 30, 2025 - VSE Corporation (NASDAQ: VSEC, "VSE", or the "Company"), a leading provider of aftermarket distribution and repair services, announced today results for the second quarter 2025.

SECOND QUARTER 2025 RESULTS(1)
(As compared to the Second Quarter 2024)

▪Total Revenues of $272.1 million increased 41.1%
▪GAAP Net Income(2) of $13.6 million
▪GAAP EPS (Diluted)(2) of $0.66
▪Adjusted EBITDA(3) of $43.5 million increased 51.9%
▪Adjusted Net Income(3) of $20.1 million increased 149.1%
▪Adjusted EPS (Diluted)(3) of $0.97 increased 106.4%

1 From continuing operations
2 Percentage change is not meaningful (NM)
3 Non-GAAP measure. See additional information at the end of this release regarding non-GAAP financial measures


MANAGEMENT COMMENTARY
"VSE delivered record revenue and profitability in the second quarter, underscoring the strength of our aviation-focused strategy and the continued momentum of our business transformation," said John Cuomo, President and CEO of VSE Corporation. "This quarter was marked by significant progress, including the divestiture of our Fleet segment and the acquisition of Turbine Weld Industries, a highly specialized MRO service provider for complex engine components. These strategic actions, combined with the ongoing integration of recent acquisitions, have sharpened our focus, expanded our capabilities, and strengthened our position in the high-growth, high-margin aviation aftermarket.”

Mr. Cuomo continued, "Our team continues to perform at a high level, delivering strong year-over-year sales growth and margin expansion, supported by robust end-market demand. Both our distribution and MRO businesses achieved record sales and profitability during the quarter, and we remain well-positioned to sustain this momentum as we enter the second half of the year."

"VSE’s second quarter results reflect continued operational discipline and strategic execution, with double-digit revenue growth, record margins, and positive free cash flow," said Adam Cohn, Chief Financial Officer of VSE Corporation. "Looking ahead, we are focused on driving improved free cash flow generation, optimizing our cost structure to support the streamlined aviation platform, and completing post-divestiture transition efforts."


SECOND QUARTER SEGMENT RESULTS
Aviation segment revenue increased 41.1% year-over-year to a record $272.1 million in the second quarter of 2025. The year-over-year revenue improvement was attributable to strong execution of new and existing distribution awards, the addition of new product lines and repair capabilities, and contributions from recent acquisitions, supported by solid end-market demand. Aviation distribution and MRO revenue increased 50.4% and 27.3%, respectively, in the second quarter of 2025, versus the prior-year period. The Aviation segment reported operating income of $35.1 million in the second quarter, compared to $24.5 million in the same period of 2024. Segment Adjusted EBITDA increased by 47.7% in the second quarter to a record $46.5 million, versus $31.5 million in the prior-year period. Adjusted EBITDA margin was 17.1%, an increase of approximately 80 basis points versus the prior-year period.





FINANCIAL RESOURCES AND LIQUIDITY
The Company generated $12 million of operating cash flow and $6 million of free cash flow in the second quarter of 2025. As of June 30, 2025, the Company had $333 million in cash and unused commitment availability under its $400 million revolving credit facility maturing in 2030. As of June 30, 2025, VSE had a total net debt outstanding of $362 million. Adjusted net leverage was approximately 2.2x as of the end of the second quarter.


GUIDANCE
VSE is reaffirming full-year 2025 revenue growth and increasing Aviation Adjusted EBITDA margin guidance to the high-end of the previously provided range:
•Full-year 2025 revenue growth is expected to be 35% to 40%, as compared to the prior year, to reflect both current business performance and current year contributions from the TCI and Kellstrom acquisitions.
•Aviation segment full-year 2025 Adjusted EBITDA margin is now expected to be between 16.5% to 17%, an increase from the previous guidance range of 16% to 17%.
•Guidance does not assume further tariff escalation or a global recession.




SECOND QUARTER RESULTS
Three months ended June 30,Six months ended June 30,
(in thousands, except per share data)20252024% Change20252024% Change
Revenues$272,139 $192,828 41.1 %$528,184 $355,211 48.7 %
Operating income $22,513 $2,602 765.2 %$47,017 $18,245 157.7 %
Net income (loss) from continuing operations$13,638 $(5,288)NM$27,606 $254 NM
EPS (Diluted)$0.66 $(0.31)NM$1.33 $0.01 NM

SECOND QUARTER SEGMENT RESULTS

Following the divestiture of the Fleet segment, the Company operates under a single reportable operating segment. The reconciliation below provides transitional disclosure of Aviation's results for the three and six months ended June 30, 2025 and 2024 to support comparability with prior period disclosures.
Three months ended June 30,Six months ended June 30,
(in thousands)20252024% Change20252024% Change
Revenues:
Aviation $272,139 $192,828 41.1 %$528,184 $355,211 48.7 %
Operating income:
Operating income$22,513 $2,602 765.2 %$47,017 $18,245 157.7 %
Unallocated corporate costs
$12,559 $21,866 (42.6)%$19,579 $28,533 (31.4)%
Aviation
$35,072 $24,468 43.3 %$66,596 $46,778 42.4 %





NON-GAAP MEASURES

In addition to the financial measures prepared in accordance with generally accepted accounting principles ("GAAP"), this earnings release also contains Non-GAAP financial measures. These measures provide useful information to investors, and a reconciliation of these measures to the most directly comparable GAAP measures and other information relating to these Non-GAAP measures is included in the supplemental schedules attached.


NON-GAAP FINANCIAL INFORMATION

Adjusted Net Income from Continuing Operations and Adjusted EPS
Three months ended June 30,Six months ended June 30,
(in thousands)20252024% Change20252024% Change
Net income (loss) from continuing operations$13,638 $(5,288)NM$27,606 $254 NM
Adjustments to income from continuing operations:
Acquisition, integration and restructuring costs
1,832 1,099 66.7 %4,697 3,283 43.1 %
Lease abandonment costs— 12,857 (100.0)%— 12,857 (100.0)%
Divestiture-related restructuring costs432 3,861 (88.8)%495 3,861 (87.2)%
Earn-out adjustment
5,900 — — %5,900 — — %
Debt issuance costs
491 — — %491 — — %
22,293 12,529 77.9 %39,189 20,255 93.5 %
Tax impact of adjusted items(2,159)(4,445)(51.4)%(2,890)(4,990)(42.1)%
Adjusted net income from continuing operations
$20,134 $8,084 149.1 %$36,299 $15,265 137.8 %
Weighted average dilutive shares20,731 17,202 20.5 %20,736 16,571 25.1 %
Adjusted EPS (Diluted)$0.97 $0.47 106.4 %$1.75 $0.92 90.2 %

EBITDA and Adjusted EBITDA
Three months ended June 30,Six months ended June 30,
(in thousands)20252024% Change20252024% Change
Net income (loss) from continuing operations$13,638 $(5,288)NM$27,606 $254 NM
Interest expense6,445 9,826 (34.4)%14,384 19,016 (24.4)%
Income taxes2,430 (1,936)NM5,027 (1,025)NM
Amortization of intangible assets6,487 4,329 49.8 %12,621 7,679 64.4 %
Depreciation and other amortization3,147 1,753 79.5 %6,187 3,514 76.1 %
EBITDA32,147 8,684 270.2 %65,825 29,438 123.6 %
Acquisition, integration and restructuring costs1,832 1,099 66.7 %4,697 3,283 43.1 %
Lease abandonment costs— 12,857 (100.0)%— 12,857 (100.0)%
Divestiture-related restructuring costs432 3,861 (88.8)%495 3,861 (87.2)%
Earn-out adjustment
5,900 — — %5,900 — — %
Stock-based compensation
3,141 2,111 48.8 %6,888 4,387 57.0 %
Adjusted EBITDA$43,452 $28,612 51.9 %$83,805 $53,826 55.7 %



Adjusted EBITDA Summary
(in thousands)Three months ended June 30,Six months ended June 30,
20252024% Change20252024% Change
Aviation$46,522 $31,488 47.7 %$89,847 $59,915 50.0 %
Adjusted unallocated corporate costs (1)
(3,070)(2,876)6.7 %(6,042)(6,089)(0.8)%
Adjusted EBITDA $43,452 $28,612 51.9 %$83,805 $53,826 55.7 %
(1) Includes certain adjustments not directly attributable to the Aviation segment.

Segment EBITDA and Adjusted EBITDA
Three months ended June 30,Six months ended June 30,
(in thousands)20252024% Change20252024% Change
Aviation
Operating income$35,072 $24,468 43.3 %$66,596 $46,778 42.4 %
Depreciation and amortization9,626 6,034 59.5 %18,792 10,968 71.3 %
EBITDA44,698 30,502 46.5 %85,388 57,746 47.9 %
Acquisition, integration and restructuring costs556 474 17.3 %1,900 909 109.0 %
Stock-based compensation
1,268 512 147.7 %2,559 1,260 103.1 %
Adjusted EBITDA$46,522 $31,488 47.7 %$89,847 $59,915 50.0 %

Three months ended June 30,Six months ended June 30,
(in thousands)20252024% Change20252024% Change
Corporate
Unallocated corporate costs
$12,559 21,866 (42.6)%19,579 28,533 (31.4)%
Depreciation and amortization(8)(48)(83.3)%(16)(225)(92.9)%
EBITDA12,551 21,818 (42.5)%19,563 28,308 (30.9)%
Acquisition, integration and restructuring costs(1,276)(625)104.2 %(2,797)(2,374)17.8 %
Lease abandonment costs— (12,857)(100.0)%— (12,857)(100.0)%
Divestiture-related restructuring costs(432)(3,861)(88.8)%(495)(3,861)(87.2)%
Earn-out adjustment
(5,900)— — %(5,900)— — %
Stock-based compensation
(1,873)(1,599)17.1 %(4,329)(3,127)38.4 %
Adjusted unallocated corporate costs
$3,070 $2,876 6.7 %$6,042 $6,089 (0.8)%


Free Cash Flow

Three months ended June 30,Six months ended June 30,
(in thousands)2025202420252024
Net cash provided by (used in) operating activities
$11,891 $(17,528)$(34,741)$(96,588)
Capital expenditures(5,589)(3,945)(8,464)(11,674)
Free cash flow$6,302 $(21,473)$(43,205)$(108,262)






Net Debt

(in thousands)June 30, 2025December 31, 2024
Principal amount of debt$383,000 $432,500 
Debt issuance costs(3,844)(2,327)
Cash and cash equivalents(16,906)(29,030)
Net Debt$362,250 $401,143 


Net Leverage Ratio

($ in thousands)June 30, 2025December 31, 2024
Net Debt$362,250 $401,143 
TTM Adjusted EBITDA (1)
$147,003 $136,294 
Net Leverage Ratio2.5 x2.9 x
TTM Acquisition Adjusted EBITDA (2)
$162,287 $158,752 
Adjusted Net Leverage Ratio
2.2 x2.5 x
(1) TTM Adjusted EBITDA is defined as Adjusted EBITDA for the most recent twelve (12) month period. TTM Adjusted EBITDA and Cash and cash equivalents for the period ended December 31, 2024 only do not include any adjustment to reclassify amounts from the Fleet segment.
(2) TTM Acquisition Adjusted EBITDA includes pre-acquisition portion of EBITDA for the trailing twelve months that is not included in historical results.

The non-GAAP Financial Information set forth in this document is not calculated in accordance with GAAP under SEC Regulation G. The Company considers Adjusted Net Income, Adjusted EPS (Diluted), EBITDA, Adjusted EBITDA, Acquisition Adjusted EBITDA, TTM Adjusted EBITDA, TTM Acquisition Adjusted EBITDA, Adjusted unallocated corporate costs, net debt, adjusted net leverage ratio and free cash flow as non-GAAP financial measures and important indicators of performance and useful metrics for management and investors to evaluate the business' ongoing operating performance on a consistent basis across reporting periods. These non-GAAP financial measures, however, should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. Adjusted Net Income represents Net Income adjusted for acquisition-related costs, other discrete items, and related tax impact. Management believes these acquisition-related costs and other discrete items provide useful information about nonrecurring costs and benefits to help users meaningfully evaluate and compare the Company's quarterly and year-to-date performance against prior periods. Adjusted EPS (Diluted) is computed by dividing net income, adjusted for the discrete items as identified above and the related tax impacts, by the diluted weighted average number of common shares outstanding. EBITDA represents net income before interest expense, income taxes, amortization of intangible assets and depreciation and other amortization. Management believes EBITDA provides useful information about the Company's operating performance as it isolates non-cash depreciation and amortization charges as well as interest expense and income taxes, which are non-operating items. Adjusted EBITDA represents EBITDA (as defined above) adjusted for non-cash stock-based compensation and discrete items as identified above. Acquisition Adjusted EBITDA represents Adjusted EBITDA plus the pre-acquisition portion of EBITDA for the trailing twelve months. TTM Adjusted EBITDA represents Adjusted EBITDA as defined above for the trailing twelve months. TTM Acquisition Adjusted EBITDA includes pre-acquisition portion of EBITDA for the trailing twelve months that is not included in historical results. Adjusted unallocated corporate costs represents Unallocated corporate costs before depreciation and other amortization, adjusted for non-cash stock-based compensation and discrete items as identified above. Net debt is defined as principal amount of debt less debt issuance costs and less cash and cash equivalents. Free cash flow represents operating cash flow less capital expenditures. Adjusted Net leverage ratio is calculated as net debt divided by trailing twelve month Acquisition Adjusted EBITDA.

The Company has presented forward-looking statements regarding Adjusted EBITDA margin. This non-GAAP financial measure is derived by excluding certain amounts, expenses or income, from the corresponding financial measure determined in accordance with GAAP. The determination of the amounts that are excluded from this non-GAAP financial measure is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period in reliance on the exception provided by item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable to present a quantitative reconciliation of forward-looking Adjusted EBITDA margin to its most directly comparable forward-looking GAAP financial measure because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measure without unreasonable effort or expense. In addition, the Company believes such reconciliation would imply a degree of precision that would be confusing or misleading to investors. The unavailable information


could have a significant impact on the company's future financial results. This non-GAAP financial measure is a preliminary estimate and is subject to risks and uncertainties, including, among others, changes in connection with quarter-end and year-end adjustments. Any variation between the company's actual results and preliminary financial data set forth above may be material.





CONFERENCE CALL

A conference call will be held Thursday, July 31, 2025 at 8:30 A.M. ET to review the Company’s financial results, discuss recent events and conduct a question-and-answer session.

An audio webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of VSE’s website at https://ir.vsecorp.com. A replay of the audio webcast will be available at the same location following the conclusion of the call.

Participants who will be dialing in for the conference call should register to obtain their dial in and passcode details. Participants may pre-register at any time. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.

ABOUT VSE CORPORATION

VSE is a leading provider of Aviation distribution and repair services for the commercial and business and general aviation (BG&A) aftermarkets. Headquartered in Miramar, Florida, VSE is focused on significantly enhancing the productivity and longevity of its customers' high-value, business-critical assets. VSE’s aftermarket parts distribution and maintenance, repair, and overhaul (MRO) services support engine component and engine and airframe accessory part distribution and repair services for commercial and BG&A operators. For more detailed information, please visit VSE's website at www.vsecorp.com.

Please refer to the Form 10-Q that will be filed with the Securities and Exchange Commission ("SEC") on or about July 31, 2025 for more details on the Company's second quarter 2025 results. Also, refer to VSE’s Annual Report on Form 10-K for the year ended December 31, 2024 for further information and analysis of VSE’s financial condition and results of operations. VSE encourages investors and others to review the detailed reporting and disclosures contained in VSE’s public filings for additional discussion about the status of customer programs and contract awards, risks, revenue sources and funding, dependence on material customers, and management’s discussion of short- and long-term business challenges and opportunities.




FORWARD LOOKING STATEMENTS

This document contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause VSE’s actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this document. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Company can give no assurance that actual results will not differ materially from these expectations. “Forward-looking” statements, as such term is defined by the SEC in its rules, regulations and releases, represent the Company's expectations or beliefs, including, but not limited to, statements concerning the Company's operations, economic performance, financial condition, growth and acquisition strategies, investments and future operational plans. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “forecast,” “seek,” “plan,” “predict,” “project,” “could,” “estimate,” “might,” “continue,” “seeking” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements, by their nature, involve substantial risks and uncertainties, certain of which are beyond the Company's control, and actual results may differ materially depending on a variety of important factors, including, but not limited to, factors identified in the Company's reports filed or expected to be filed with the SEC including the Annual Report on Form 10-K for the year ended December 31, 2024 and subsequent filings made with the SEC. All forward-looking statements made herein are qualified by these cautionary statements and risk factors and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned not to place undue reliance on these forward looking-statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

INVESTOR CONTACT

Michael Perlman
VP, Investor Relations & Treasury
T: (954) 547-0480 M: (561) 281-0247
investors@vsecorp.com



VSE Corporation and Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands except share and per share amounts)
June 30,December 31,
20252024
Assets
Current assets:
Cash and cash equivalents$16,906 $29,505 
Receivables (net of allowance of $4.8 million and $4.1 million, respectively)
183,208 158,104 
Contract assets
34,043 29,960 
Inventories463,216 434,059 
Prepaid expenses and other current assets
56,246 30,899 
Current assets held-for-sale— 282,820 
Total current assets753,619 965,347 
Property and equipment (net of accumulated depreciation of $27.1 million and $21.3 million, respectively)
80,243 71,041 
Intangible assets (net of accumulated amortization of $86.8 million and $82.7 million, respectively)
208,536 197,157 
Goodwill428,665 428,263 
Operating lease right-of-use asset43,748 43,225 
Note receivable25,000 — 
Earn-out receivable23,300 — 
Other assets38,916 37,597 
Total assets$1,602,027 $1,742,630 
Liabilities and Stockholders' equity  
Current liabilities:  
Current portion of long-term debt$7,500 $30,000 
Accounts payable140,465 145,492 
Accrued expenses and other current liabilities52,012 52,749 
Dividends payable2,068 2,059 
Current liabilities held-for-sale— 68,200 
Total current liabilities202,045 298,500 
Long-term debt, less current portion371,656 400,173 
Deferred compensation7,540 7,262 
Long-term operating lease obligations38,259 39,498 
Other long-term liabilities3,000 9,011 
Total liabilities622,500 754,444 
Commitments and contingencies
Stockholders' equity:  
Common stock, par value $0.05 per share, authorized 44,000,000 shares; issued and outstanding 20,676,320 and 20,590,496, respectively
1,034 1,030 
Additional paid-in capital595,001 591,600 
Retained earnings382,572 392,484 
Accumulated other comprehensive income920 3,072 
Total stockholders' equity979,527 988,186 
Total liabilities and stockholders' equity$1,602,027 $1,742,630 


VSE Corporation and Subsidiaries
Unaudited Consolidated Statements of Operations
(in thousands except share and per share amounts)
 Three months ended June 30,Six months ended June 30,
 2025202420252024
Revenues:
Products$173,603 $115,448 $334,154 $223,471 
Services98,536 77,380 194,030 131,740 
Total revenues272,139 192,828 528,184 355,211 
Costs and operating expenses:  
Products144,828 96,624 281,695 189,285 
Services89,795 72,636 176,024 120,440 
Selling, general and administrative expenses8,516 3,780 10,827 6,705 
Lease abandonment costs— 12,857 — 12,857 
Amortization of intangible assets6,487 4,329 12,621 7,679 
Total costs and operating expenses249,626 190,226 481,167 336,966 
Operating income22,513 2,602 47,017 18,245 
Interest expense, net6,445 9,826 14,384 19,016 
Income (loss) from continuing operations before income taxes16,068 (7,224)32,633 (771)
Provision (benefit) for income taxes2,430 (1,936)5,027 (1,025)
Net income (loss) from continuing operations13,638 (5,288)27,606 254 
(Loss) income from discontinued operations, net of tax(10,441)2,511 (33,382)(9,642)
Net income (loss)$3,197 $(2,777)$(5,776)$(9,388)
Earnings (loss) per share:
  Basic
     Continuing operations$0.66 $(0.31)$1.34 $0.02 
     Discontinued operations(0.51)0.15 (1.62)(0.59)
$0.15 $(0.16)$(0.28)$(0.57)
  Diluted
     Continuing operations$0.66 $(0.31)$1.33 $0.01 
     Discontinued operations(0.50)0.15 (1.61)(0.58)
$0.16 $(0.16)$(0.28)$(0.57)
Weighted average shares outstanding:
     Basic20,670,239 17,152,661 20,644,215 16,468,288 
     Diluted20,731,397 17,202,115 20,735,979 16,571,033 
Dividends declared per share$0.10 $0.10 $0.20 $0.20 



VSE Corporation and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(in thousands)
Six months ended June 30,
 20252024
(a)
(a)
Cash flows from operating activities:
Net loss$(5,776)$(9,388)
Adjustments to reconcile net loss to net cash used in operating activities:
  Depreciation and amortization19,540 12,868 
  Amortization of debt issuance cost1,067 665 
  Deferred taxes(3,474)(6,925)
  Stock-based compensation6,663 4,812 
  Impairment and loss on sale of business segments47,203 16,867 
  Loss on sale of property and equipment10 421 
  Lease abandonment costs— 12,857 
  Earn-out receivable adjustment
5,900 — 
      Changes in operating assets and liabilities, net of impact of acquisitions:
  Receivables(30,051)(38,292)
  Contract assets(2,969)6,240 
  Inventories(25,478)(25,408)
  Prepaid expenses and other current assets and other assets(26,144)(14,584)
  Operating lease assets and liabilities, net(1,573)(362)
  Accounts payable and deferred compensation(13,724)(47,047)
  Accrued expenses and other liabilities(5,935)(9,312)
      Net cash used in operating activities
(34,741)(96,588)
Cash flows from investing activities:
Purchases of property and equipment(8,464)(11,674)
Proceeds from the sale of business segments, net of cash divested138,816 42,118 
Cash paid for acquisitions, net of cash acquired(47,739)(112,264)
      Net cash provided by (used in) investing activities82,613 (81,820)
Cash flows from financing activities:
Borrowings on bank credit facilities
624,881 419,881 
Repayments on bank credit facilities
(674,381)(386,381)
Proceeds from issuance of common stock463 161,692 
Payment of debt financing costs(2,584)— 
Payment of taxes for equity transactions(4,248)(2,545)
Dividends paid(4,127)(3,176)
      Net cash (used in) provided by financing activities(59,996)189,471 
Net (decrease) increase in cash and cash equivalents(12,124)11,063 
Cash and cash equivalents, beginning of period29,030 7,930 
Cash and cash equivalents, end of period$16,906 $18,993 
Supplemental disclosure of noncash investing and financing activities:
Note receivable from the sale of business segment
$25,000 $— 
Earn-out receivable from the sale of business segment
$29,200 $— 

(a) The cash flows related to discontinued operations and held-for-sale assets and liabilities have not been segregated, and remain included in the major classes of assets and liabilities. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations.