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Sep 30, 2020
VSE Q3 2020 Earnings Report
VSE reported a decline in total revenues but experienced growth in the Aviation segment and positive free cash flow.
Key Takeaways
VSE Corporation announced its Q3 2020 results, with total revenues declining by 16.5% to $165.5 million compared to the same period in 2019. GAAP Net Income decreased to $8.1 million, and Adjusted EBITDA declined to $18.0 million. However, the company generated $11.3 million in free cash flow and reduced total debt by $10.4 million during the quarter. The Aviation segment reported quarter-over-quarter revenue growth, and the Fleet segment saw a significant increase in commercial sales.
Total revenues decreased by 16.5% year-over-year, but excluding divestitures, the decline was 12.0%.
GAAP Net Income declined by $2.4 million, while Adjusted EBITDA decreased by $6.5 million.
Free cash flow was $11.3 million, and total debt was reduced by $10.4 million during the quarter.
Aviation segment revenue increased 16.1% quarter-over-quarter, excluding Prime Turbines and CT Aerospace.
Forward Guidance
VSE expects to generate sequential revenue growth within its Aviation segment in the fourth quarter, driven by continued market share gains and a gradual recovery in business and general aviation markets. The company anticipates that these factors will offset lower repair activity with commercial airline customers.
Positive Outlook
- Sequential revenue growth expected in the Aviation segment.
- Continued market share gains anticipated.
- Gradual recovery expected in business and general aviation markets.
- Customers are turning to VSE to help them better compete with next-level operating efficiency.
Challenges Ahead
- Lower repair activity expected with commercial airline customers.
- Market disruption and uncertainty continue.
- Customers are focusing on reducing fixed overhead and working capital requirements.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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