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Dec 31, 2022
VSE Q4 2022 Earnings Report
VSE Corporation experienced growth, driven by strong performance in the Aviation and Fleet segments.
Key Takeaways
VSE Corporation reported an 11% increase in total revenues to $234.3 million for Q4 2022, with GAAP net income decreasing by 22% to $4.8 million. Adjusted EPS increased by 28% to $0.68, and adjusted EBITDA increased by 29% to $22.9 million. The Aviation segment saw significant revenue growth, and the Fleet segment expanded its distribution capabilities.
Total revenues increased by 11% to $234.3 million.
GAAP Net Income decreased 22% to $4.8 million.
Adjusted EPS increased 28% to $0.68.
Aviation segment revenue grew by nearly 30%.
Forward Guidance
VSE anticipates continued growth, driven by strategic investments and market expansion.
Positive Outlook
- New distribution center expected to contribute $50 million in incremental sales to the Fleet segment in 2023.
- Acquisition of Precision Fuel Components expands MRO capabilities in the B&GA and rotorcraft markets.
- Focus on disciplined capital allocation and investments in accretive growth opportunities.
- Expansion into the Asia Pacific region supporting the Pratt & Whitney Canada distribution agreement.
- Federal & Defense segment received a 6-month contract extension to its Naval Sea Systems Command (NAVSEA) program.
Challenges Ahead
- Interest expense increased in the fourth quarter due to a higher Federal Funds Rate and the timing of cash flow in the quarter.
- Margin compression in the Fleet segment was primarily driven by pre-launch expenses for the new Memphis-area distribution center.
- Federal & Defense segment revenue decreased due to decline in U.S. Army work due to program completions.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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