Open the filing on EDGARVSE Corporation Announces Second Quarter 2026 Results
Record Revenue and Profitability
Raises 2026 Guidance
MIRAMAR, FLORIDA, August 5, 2026 - VSE Corporation (“VSE” or the “Company”) (NASDAQ: VSEC, VSECU), a leading provider of aviation aftermarket distribution and repair services, announced today results for the second quarter 2026.
SECOND QUARTER 2026 RESULTS
(As compared to the Second Quarter 2025)
- Total Revenues of $449.1 million increased 65.0%
- GAAP Net Income of $28.5 million increased 109.1%
- GAAP Net Income Margin of 6.4% increased approximately 140 basis points
- GAAP EPS (Diluted) of $0.91 increased 37.9%
- Adjusted EBITDA of $86.0 million increased 98.0%
- Adjusted EBITDA Margin of 19.2% increased approximately 320 basis points
- Adjusted Net Income of $55.0 million increased 101.2%
- Adjusted EPS (Diluted) of $1.75 increased 32.6%
All numbers reflect results from continuing operations
Non-GAAP measures, which reflect a change in the definition of Adjusted Net Income and Adjusted EPS (Diluted). See additional information within this release regarding non-GAAP financial measures
MANAGEMENT COMMENTARY
“The second quarter marked a defining step forward for VSE as we completed the largest acquisition in our history and established a differentiated global aviation aftermarket platform,” said John Cuomo, President and Chief Executive Officer of VSE Corporation. “With our recent acquisitions of Precision Aviation Group ("PAG") and NorthStar Technologies ("NorthStar"), along with our legacy VSE Aviation businesses, we are positioning VSE to become the world’s leading independent provider of aftermarket distribution and repair services, while remaining firmly grounded in the OEM-centric strategy that has guided our transformation.”
“The power of the combined platform is already evident in our financial performance. We delivered record revenue and profitability in the second quarter, exceeding our prior expectations and representing a significant step toward achieving a consolidated Adjusted EBITDA margin of more than 20% in the near future. Organic growth remained broad-based, supported by new business wins, expanded capabilities, market share gains, greater share of wallet on existing programs and continued strength across the aviation aftermarket."
“Integration is a core VSE capability and an important competitive differentiator. In the short time since closing on the PAG and NorthStar acquisitions, our teams have established clear business and integration plans and are already advancing tangible revenue and margin opportunities, including insourcing, joint sales initiatives, sales-channel alignment and operating efficiencies. We are confident in the combined strength of this platform. As integration progresses, we see meaningful synergy and margin expansion potential, further reinforcing our long-term growth strategy. The strength of our first-half performance, together with our visibility into the remainder of the year, supports our decision to raise both revenue and Adjusted EBITDA margin guidance for 2026,” concluded Mr. Cuomo.
“VSE’s second quarter results reflect strong execution and operational discipline across the combined business,” said Adam Cohn, Chief Financial Officer of VSE Corporation. “In the second quarter and compared to the same period last year, revenue increased 65% to $449 million, net income from continuing operations increased 109% to $29 million, Adjusted EBITDA from continuing operations nearly doubled to $86 million, and Adjusted EBITDA margin from continuing operations expanded approximately 320 basis points to a record 19.2%. We generated approximately $28 million of operating cash flow and $19 million of free cash flow in the second quarter, with an Adjusted Net Leverage ratio of approximately 2.4x. In addition, we expect stronger free cash flow generation in the second half of the year, providing increased financial flexibility as we execute our integration priorities and disciplined capital allocation strategy.”
SECOND QUARTER HIGHLIGHTS
PAG ACQUISITION
VSE completed its acquisition of PAG from GenNx360 Capital Partners on May 5, 2026, in a transaction valued at approximately $2.025 billion in cash and equity, the largest acquisition in VSE’s history. The addition of PAG materially expands VSE’s scale, global reach, proprietary content and repair capabilities across commercial, business and general aviation, rotorcraft, OEM and defense end markets. Integration is underway with clear workstreams focused on sales-channel alignment, systems, insourcing, joint commercial opportunities and other revenue and margin synergies across the combined platform.
NORTHSTAR ACQUISITION
VSE completed its acquisition of NorthStar on April 1, 2026, adding engine-related maintenance, repair and overhaul (“MRO”), third-party logistics and engine component support to the Company’s aftermarket offering. NorthStar’s engine teardown, kitting and engine component-level service capabilities span multiple engine platforms and deepen VSE’s integration within OEM aftermarket supply chains. Since closing, VSE has rebranded the business as VSE Aviation Services, aligned its leadership structure and begun executing initiatives to expand its logistics and MRO capabilities.
SECOND QUARTER RESULTS
The Company's revenue increased 65.0% year-over-year to a record $449.1 million in the second quarter of 2026. Organic revenue growth was approximately 14%, driven by strength in the commercial engine aftermarket, new business wins, execution on new distribution agreements, expanded product and repair capabilities, market share gains and increased share of wallet on existing programs. The PAG, Aero 3, and NorthStar acquisitions also contributed to the year-over-year increase. Repair and distribution revenue increased 149.4% and 17.2%, respectively, versus the prior-year period. The Company reported net income from continuing operations of $28.5 million, compared to $13.6 million in the second quarter of 2025. Adjusted EBITDA from continuing operations increased by 98.0% to a record $86.0 million, compared to $43.5 million in the prior-year period. Adjusted EBITDA margin from continuing operations reached a record 19.2%, an increase of approximately 320 basis points, driven primarily by a greater mix of higher-margin product and repair activity, continued synergy realization from previously acquired businesses, and contributions from PAG.
FINANCIAL RESOURCES AND LIQUIDITY
The Company generated $27.6 million of operating cash flow and $18.7 million of free cash flow in the second quarter of 2026. As of June 30, 2026, the Company had $75.4 million in cash and approximately $500.0 million available under its revolving credit facility. Total debt outstanding was $966.7 million. Total net debt was $871.6 million and Adjusted net leverage was approximately 2.4x at quarter end. The Company anticipates stronger free cash flow generation in the second half of 2026, supporting continued deleveraging and disciplined investment in organic and inorganic growth opportunities.
UPDATED FULL YEAR 2026 CONSOLIDATED GUIDANCE
REVENUE
VSE is increasing its full year 2026 revenue guidance based on strong first-half performance, continued organic growth, and improved visibility into the second half of 2026. The Company is also encouraged by the demand environment and customer activity, reinforcing confidence in the strength and durability of the business. The Company now expects full year 2026 revenue growth of 61% to 64%, compared to its prior outlook of 57% to 61%.
ADJUSTED EBITDA MARGIN
VSE is also increasing its full year 2026 Adjusted EBITDA margin outlook based on record first-half profitability, continued operating execution, and the early benefits of integrating its recent acquisitions. The Company now expects full-year 2026 Adjusted EBITDA margin in the range of 18.7% to 19.0%, compared to its prior outlook of 18.1% to 18.5%.
Non-GAAP measures. See additional information at the end of this release regarding non-GAAP financial measures and the Company's inability to provide quantitative reconciliation of forward-looking Adjusted EBITDA to net income.
SECOND QUARTER RESULTS
| Three months ended June 30, | Six months ended June 30, |
|---|
| (in thousands, except per share data) | | 2026 | | 2025 | % Change | | 2026 | | 2025 | % Change |
| Revenues | $449,137 | | $272,139 | | 65.0% | $773,717 | | $528,184 | | 46.5% |
| Operating income | $48,958 | | $22,513 | | 117.5% | $81,706 | | $47,017 | | 73.8% |
| Net income from continuing operations | $28,523 | | $13,638 | | 109.1% | $57,578 | | $27,606 | | 108.6% |
| EPS (Diluted) | $0.91 | | $0.66 | | 37.9% | $1.94 | | $1.33 | | 45.9% |
NON-GAAP MEASURES
In addition to the financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this earnings release also contains non-GAAP financial measures. These measures provide useful information to investors.
VSE considers Adjusted Net Income from Continuing Operations, Adjusted EPS (Diluted) from Continuing Operations, EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations, Adjusted EBITDA margin from continuing operations, Acquisition Adjusted EBITDA from Continuing Operations, TTM Adjusted EBITDA from Continuing Operations, TTM Acquisition Adjusted EBITDA from Continuing Operations, net debt, net leverage ratio, 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 VSE’s business's 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 from Continuing Operations represents Net Income adjusted for acquisition-related costs, amortization of intangible assets, stock-based compensation, 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) from Continuing Operations 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. Beginning with the second quarter of 2026, Adjusted Net Income from Continuing Operations and Adjusted EPS (Diluted) from Continuing Operations now include adjustments for amortization of intangible assets and stock-based compensation, with retrospective adjustments included for prior periods presented. Management believes these adjustments provide useful information to evaluate VSE's ongoing operating performance on a consistent basis. EBITDA from Continuing Operations represents net income before interest expense, income taxes, amortization of intangible assets and depreciation and other amortization. Management believes EBITDA from Continuing Operations 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 from Continuing Operations represents EBITDA from Continuing Operations (as defined above) adjusted for non-cash stock-based compensation and discrete items as identified above. Adjusted EBITDA margin from Continuing Operations represents Adjusted EBITDA from Continuing Operations as a percentage of revenue. Acquisition Adjusted EBITDA from Continuing Operations represents Adjusted EBITDA from Continuing Operations plus the pre-acquisition portion of EBITDA from Continuing Operations for the trailing twelve months. TTM Adjusted EBITDA from Continuing Operations represents Adjusted EBITDA from Continuing Operations as defined above for the trailing twelve months. TTM Acquisition Adjusted EBITDA from Continuing Operations includes pre-acquisition portion of EBITDA from Continuing Operations for the trailing twelve months that is not included in historical results. TTM Acquisition Adjusted EBITDA from Continuing Operations does not reflect all adjustments that would otherwise be required in connection with the preparation of pro forma financial statements in accordance with Article 11 of
Regulation S-X. 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. Capital expenditures include purchases of property and equipment. Net leverage ratio is calculated as net debt divided by TTM Adjusted EBITDA from Continuing Operations. Adjusted Net leverage ratio is calculated as net debt divided by TTM Acquisition Adjusted EBITDA from Continuing Operations.
Additionally, Adjusted EBITDA margin is also presented as a forward-looking non-GAAP financial measure, defined as estimated operating income before depreciation and amortization expenses as a percentage of revenue. This measure is based solely on information available to VSE as of the date of this earnings release and may differ materially from VSE’s actual operating results as a result of developments that occur after the date of this earnings release. 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, income amounts or anticipated synergies recognized in a given period. VSE is unable to present a quantitative reconciliation of forward-looking VSE Adjusted EBITDA from Continuing Operations to net income because certain information regarding the Company’s provision for income taxes is not available, and management cannot reliably predict all of the necessary components of net income at this time without unreasonable effort or expense. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The unavailable information could have a significant impact on the Company’s future financial results. Reconciliations 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. These non-GAAP measures, however, have limitations as analytical tools and should not be considered in isolation or as a substitute for performance prepared in accordance with GAAP.
NON-GAAP FINANCIAL INFORMATION
Adjusted Net Income from Continuing Operations and Adjusted EPS from Continuing Operations
| | Three months ended June 30, | Six months ended June 30, |
|---|
| (in thousands) | | 2026 | | 2025 | % Change | | 2026 | | 2025 | % Change |
| Net income from continuing operations | $28,523 | | $13,638 | | 109.1% | $57,578 | | $27,606 | | 108.6% |
| Adjustments to net income from continuing operations: | | | | | | |
| Acquisition, integration and restructuring costs | 9,047 | | 1,832 | | 393.8% | 14,372 | | 4,697 | | 206.0% |
| Divestiture-related restructuring costs | - | | 432 | | (100.0)% | 68 | | 495 | | (86.3)% |
| Interest income on note receivable | (688) | | - | | - % | (1,382) | | - | | - % |
| Earn-out receivable adjustment | - | | 5,900 | | (100.0)% | - | | 5,900 | | (100.0)% |
| Loss on debt extinguishment | 4,473 | | - | | - % | 4,473 | | - | | - % |
| Debt issuance costs | - | | 491 | | (100.0)% | - | | 491 | | (100.0)% |
| Amortization of intangible assets | 18,450 | | 6,487 | | 184.4% | 27,500 | | 12,621 | | 117.9% |
| Stock-based compensation | 4,045 | | 3,141 | | 28.8% | 8,587 | | 6,888 | | 24.7% |
| 63,850 | | 31,921 | | 100.0% | 111,196 | | 58,698 | | 89.4% |
| Tax impact of adjusted items | (8,814) | | (4,562) | | 93.2% | (13,378) | | (7,757) | | 72.5% |
| Adjusted net income from continuing operations | $55,036 | | $27,359 | | 101.2% | $97,818 | | $50,941 | | 92.0% |
| Weighted average dilutive shares | 31,385 | | 20,731 | | 51.4% | 29,619 | | 20,736 | | 42.8% |
| GAAP EPS (Diluted) | $0.91 | | $0.66 | | 37.9% | $1.94 | | $1.33 | | 45.9% |
| Adjusted EPS (Diluted) from continuing operations | $1.75 | | $1.32 | | 32.6% | $3.30 | | $2.46 | | 34.1% |
| (1) The calculations of Adjusted Net Income from continuing operations and Adjusted EPS (Diluted) from continuing operations have been updated for the current and prior year periods to reflect adjustments for the amortization of acquired intangible assets and stock-based compensation. Refer to "Non-GAAP Measures" above for further considerations. |
| (2) The tax impact of adjusted items was calculated using an estimated statutory tax rate. |
EBITDA from Continuing Operations and Adjusted EBITDA from Continuing Operations
| | Three months ended June 30, | Six months ended June 30, |
|---|
| (in thousands) | | 2026 | | 2025 | % Change | | 2026 | | 2025 | % Change |
| Net income from continuing operations | | $28,523 | | $13,638 | 109.1% | | $57,578 | | $27,606 | 108.6% |
| Interest expense, net | | 5,230 | | 6,445 | (18.9)% | | 3,828 | | 14,384 | (73.4)% |
| Provision for income taxes | | 10,732 | | 2,430 | 341.6% | | 15,827 | | 5,027 | 214.8% |
| Amortization of intangible assets | | 18,450 | | 6,487 | 184.4% | | 27,500 | | 12,621 | 117.9% |
| Depreciation and other amortization | | 5,524 | | 3,147 | 75.5% | | 9,221 | | 6,187 | 49.0% |
| EBITDA from continuing operations | | 68,459 | | 32,147 | 113.0% | | 113,954 | | 65,825 | 73.1% |
| Acquisition, integration and restructuring costs | | 9,047 | | 1,832 | 393.8% | | 14,372 | | 4,697 | 206.0% |
| Divestiture-related restructuring costs | | - | | 432 | (100.0)% | | 68 | | 495 | (86.3)% |
| Earn-out receivable adjustment | | - | | 5,900 | (100.0)% | | - | | 5,900 | (100.0)% |
| Loss on debt extinguishment | | 4,473 | | - | - % | | 4,473 | | - | - % |
| Stock-based compensation | | 4,045 | | 3,141 | 28.8% | | 8,587 | | 6,888 | 24.7% |
| Adjusted EBITDA from continuing operations | | $86,024 | | $43,452 | 98.0% | | $141,454 | | $83,805 | 68.8% |
| Net income margin from continuing operations | 6.4% | | 5.0% | | 1.4% | 7.4% | | 5.2% | | 2.2% |
| Adjusted EBITDA margin from continuing operations | 19.2% | | 16.0% | | 3.2% | 18.3% | | 15.9% | | 2.4% |
Free Cash Flow
| Three months ended June 30, | Six months ended June 30, |
|---|
| (in thousands) | | 2026 | | 2025 | | 2026 | | 2025 |
| Net cash provided by (used in) operating activities | $27,557 | | $11,891 | | $(34,707) | | $(34,741) | |
| Capital expenditures | (8,870) | | (5,589) | | (15,327) | | (8,464) | |
| Free cash flow | $18,687 | | $6,302 | | $(50,034) | | $(43,205) | |
| (1) Amounts include the results of both continuing and discontinued operations for the three and six months ended June 30, 2025. |
Net Debt
| (in thousands) | June 30, 2026 | December 31, 2025 |
| Principal amount of debt | $966,668 | $296,250 |
| Debt issuance costs | (19,711) | (3,446) |
| Cash and cash equivalents | (75,360) | (69,358) |
| Net Debt | $871,597 | $223,446 |
Net Leverage Ratio
| ($ in thousands) | June 30, 2026 | December 31, 2025 |
| Net Debt | $871,597 | $223,446 |
| TTM Adjusted EBITDA from continuing operations | $240,573 | $182,924 |
| Net Leverage Ratio | 3.6x | 1.2x |
| TTM Acquisition Adjusted EBITDA from continuing operations | $370,179 | $209,128 |
| Adjusted Net Leverage Ratio | 2.4x | 1.1x |
| (1) TTM Adjusted EBITDA from continuing operations is defined as Adjusted EBITDA from continuing operations for the most recent twelve (12) month period. (2) TTM Acquisition Adjusted EBITDA from continuing operations includes pre-acquisition portion of EBITDA for the trailing twelve months that is not included in historical results. |
CONFERENCE CALL
A conference call will be held Thursday, August 6, 2026 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. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register, download and install any necessary audio software. A replay of the audio webcast will be available at the same location following the conclusion of the call.
ABOUT VSE CORPORATION
VSE is a leading provider of aviation distribution and repair services for the commercial and business and general aviation (B&GA) 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 B&GA 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 August 6, 2026 for more details on the Company's second quarter 2026 results. Also, refer to VSE’s Annual Report on Form 10-K for the year ended December 31, 2025 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 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, and Section 21E of the Securities Exchange Act of 1934, as amended. All such statements are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and this statement is included for purposes of such safe harbor provisions.
“Forward-looking” statements, as such term is defined by the Securities and Exchange Commission (the “SEC”) in its rules, regulations and releases, represent VSE’s expectations or beliefs, including, but not limited to, statements concerning the expected financial and other benefits of the acquisition of PAG, VSE’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 speak only as of the date of this document and VSE undertakes no ongoing obligation, other than that imposed by law, to update these statements as a result of new information, future events or otherwise. These statements relate to, among other things, VSE’s future financial condition, results of operations or prospects; VSE’s business and growth strategies; and VSE’s financing plans and forecasts. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, certain of which are beyond VSE’s control, and that actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors, some of which are unknown, including, without limitation, risks related to:
- the performance of the aviation aftermarket;
- global economic and political conditions;
- supply chain delays and disruptions;
- competition from existing and new competitors;
- losses related to investments in inventory and facilities;
- interruptions in the Company's operations;
- challenges related to workforce management or any failure to attract or retain a skilled workforce;
- the significant expenses that have been incurred and will be incurred in connection with the PAG Acquisition;
- the Company's ability to successfully integrate and achieve the strategic and other objectives and benefits, including any expected synergies, relating to recently completed acquisitions, including the PAG Acquisition;
- access to and the performance of third-party package delivery companies;
- prolonged periods of inflation and the Company's ability to mitigate the impact thereof;
- future business conditions resulting in impairments;
- the Company's ability to successfully divest businesses and to transition facilities in connection therewith;
- the Company's work on large government programs;
- health epidemics, pandemics and similar outbreaks;
- compliance with government rules and regulations, including tariffs and environmental and pollution risk;
- the Company's ability to mitigate the impacts of increased costs related to tariffs;
- litigation and legal actions arising from the Company's operations;
- technology and cybersecurity threats and incidents;
- the Company's outstanding indebtedness, including the increase in indebtedness upon completion of the PAG Acquisition;
- market volatility in the debt and equity capital markets;
- the Company's ability to continue to pay dividends at current levels or at all;
- the Company's published financial guidance;
- restrictions and limitations that may stem from financing arrangements the Company enters into or assumes in the future; and
- the other factors identified in the Company's reports filed or expected to be filed with the SEC, including the Company's Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 27, 2026 (“2025 Form 10-K").
You are advised, however, to consult any further disclosures VSE makes on related subjects in VSE’s periodic reports on Forms 10-K, 10-Q or 8-K filed with or furnished to the SEC.
VSE Corporation and Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands except share and per share amounts)
| June 30, | December 31, |
|---|
| 2026 | 2025 |
|---|
| Assets | | |
| Current assets: | | |
| Cash and cash equivalents | $75,360 | | $69,358 | |
| Receivables (net of allowance of $7.8 million and $7.2 million, respectively) | 274,628 | | 190,732 | |
| Contract assets | 59,488 | | 41,468 | |
| Inventories | 867,124 | | 553,834 | |
| Prepaid expenses and other current assets | 48,872 | | 37,937 | |
| Total current assets | 1,325,472 | | 893,329 | |
| Property and equipment (net of accumulated depreciation of $43.1 million and $34.2 million, respectively) | 166,548 | | 91,098 | |
| Intangible assets (net of accumulated amortization of $130.2 million and $100.2 million, respectively) | 952,090 | | 295,962 | |
| Goodwill | 1,810,424 | | 641,242 | |
| Operating lease right-of-use asset | 92,321 | | 50,151 | |
| Note receivable | 28,423 | | 27,041 | |
| Other assets | 22,128 | | 29,755 | |
| Total assets | $4,397,406 | | $2,028,578 | |
| Liabilities and Stockholders' equity | | |
| Current liabilities: | | |
| Current portion of long-term debt | $32,004 | | $7,500 | |
| Accounts payable | 187,068 | | 154,506 | |
| Accrued expenses and other current liabilities | 96,077 | | 73,161 | |
| Dividends payable | 2,806 | | 2,339 | |
| Earn-out obligation | 33,850 | | - | |
| Total current liabilities | 351,805 | | 237,506 | |
| Long-term debt, net of current portion | 914,953 | | 285,304 | |
| Deferred compensation | 5,114 | | 5,918 | |
| Long-term operating lease obligations | 78,643 | | 43,693 | |
| Deferred tax liabilities | 104,583 | | 12,394 | |
| Other long-term liabilities | 8,872 | | 4,955 | |
| Total liabilities | 1,463,970 | | 589,770 | |
| Commitments and contingencies | | |
| Stockholders' equity: | | |
| Common stock, par value $0.05 per share, authorized 44,000,000 shares; issued and outstanding 28,062,020 and 23,398,046, respectively | 1,403 | | 1,170 | |
| Additional paid-in capital | 2,484,138 | | 1,041,483 | |
| Retained earnings | 447,608 | | 395,643 | |
| Accumulated other comprehensive income | 287 | | 512 | |
| Total stockholders' equity | 2,933,436 | | 1,438,808 | |
| Total liabilities and stockholders' equity | $4,397,406 | | $2,028,578 | |
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, |
|---|
| 2026 | 2025 | 2026 | 2025 |
|---|
| Revenues: | | | | |
| Products | $203,407 | | $173,603 | | $405,757 | | $334,154 | |
| Services | 245,730 | | 98,536 | | 367,960 | | 194,030 | |
| Total revenues | 449,137 | | 272,139 | | 773,717 | | 528,184 | |
| Costs and operating expenses: | | | | |
| Products | 167,093 | | 144,828 | | 331,385 | | 281,695 | |
| Services | 205,605 | | 89,795 | | 317,894 | | 176,024 | |
| Selling, general and administrative expenses | 9,031 | | 2,616 | | 15,232 | | 4,927 | |
| Earn-out receivable fair value adjustments | - | | 5,900 | | - | | 5,900 | |
| Amortization of intangible assets | 18,450 | | 6,487 | | 27,500 | | 12,621 | |
| Total costs and operating expenses | 400,179 | | 249,626 | | 692,011 | | 481,167 | |
| Operating income | 48,958 | | 22,513 | | 81,706 | | 47,017 | |
| Interest expense, net | 5,230 | | 6,445 | | 3,828 | | 14,384 | |
| Loss on debt extinguishment | 4,473 | | - | | 4,473 | | - | |
| Income from continuing operations before income taxes | 39,255 | | 16,068 | | 73,405 | | 32,633 | |
| Provision for income taxes | 10,732 | | 2,430 | | 15,827 | | 5,027 | |
| Net income from continuing operations | 28,523 | | 13,638 | | 57,578 | | 27,606 | |
| Loss from discontinued operations, net of tax | - | | (10,441) | | - | | (33,382) | |
| Net income (loss) | $28,523 | | $3,197 | | $57,578 | | $(5,776) | |
| Earnings (loss) per share: | | | | |
| Basic | | | | |
| Continuing operations | $0.92 | | $0.66 | | $1.97 | | $1.34 | |
| Discontinued operations | - | | (0.51) | | - | | (1.62) | |
| $0.92 | | $0.15 | | $1.97 | | $(0.28) | |
| Diluted | | | | |
| Continuing operations | $0.91 | | $0.66 | | $1.94 | | $1.33 | |
| Discontinued operations | - | | (0.50) | | - | | (1.61) | |
| $0.91 | | $0.16 | | $1.94 | | $(0.28) | |
| Weighted average shares outstanding: | | | | |
| Basic | 30,941,788 | | 20,670,239 | | 29,229,014 | | 20,644,215 | |
| Diluted | 31,385,479 | | 20,731,397 | | 29,619,493 | | 20,735,979 | |
| 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, |
| | 2026 | | 2025 |
| Cash flows from operating activities: | | |
| Net income (loss) | $57,578 | | $(5,776) | |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | | |
| Depreciation and amortization | 36,721 | | 19,540 | |
| Amortization of debt issuance cost | 1,270 | | 1,067 | |
| Deferred taxes | 9,447 | | (3,474) | |
| Stock-based compensation | 8,664 | | 6,663 | |
| Impairment and loss on sale of business segments | - | | 47,203 | |
| Loss on sale of property and equipment | 223 | | 10 | |
| Gain on settlement of corporate-owned life insurance | (357) | | - | |
| Interest income on note receivable | (1,382) | | - | |
| Earn-out receivable adjustment | - | | 5,900 | |
| Loss on debt extinguishment | 4,473 | | - | |
| Changes in operating assets and liabilities, net of impact of acquisitions: | | |
| Receivables | (9,532) | | (30,051) | |
| Contract assets | (3,831) | | (2,969) | |
| Inventories | (115,617) | | (25,478) | |
| Prepaid expenses and other current assets and other assets | (5,410) | | (26,144) | |
| Operating lease assets and liabilities, net | 1,889 | | (1,573) | |
| Accounts payable and deferred compensation | (21,804) | | (13,724) | |
| Accrued expenses and other liabilities | 2,961 | | (5,935) | |
| Net cash used in operating activities | (34,707) | | (34,741) | |
| Cash flows from investing activities: | | |
| Purchases of property and equipment | (15,327) | | (8,464) | |
| Proceeds from the sale of business segments, net of cash divested | - | | 138,816 | |
| Cash paid for acquisitions, net of cash acquired | (1,766,844) | | (47,739) | |
| Purchases of intangible assets | (14,707) | | - | |
| Proceeds from corporate-owned life insurance settlements | 760 | | - | |
| Net cash (used in) provided by investing activities | (1,796,118) | | 82,613 | |
| Cash flows from financing activities: | | |
| Borrowings on bank credit facilities, net of creditor fees | 934,357 | | 624,881 | |
| Repayments on bank credit facilities | (343,523) | | (674,381) | |
| Repayments on amortizing notes | (5,299) | | - | |
| Proceeds from issuance of common stock, net | 829,676 | | 463 | |
| Proceeds from issuance of tangible equity units, net | 444,908 | | - | |
| Payment of debt financing costs | (7,909) | | (2,584) | |
| Payment of taxes for equity transactions | (9,119) | | (4,248) | |
| Dividends paid | (5,146) | | (4,127) | |
| Other | (984) | | - | |
| Net cash provided by (used in) financing activities | 1,836,961 | | (59,996) | |
| Effect of exchange rate changes on cash and cash equivalents | (134) | | - | |
| Net increase (decrease) in cash and cash equivalents | 6,002 | | (12,124) | |
| Cash and cash equivalents, beginning of period | 69,358 | | 29,030 | |
| Cash and cash equivalents, end of period | $75,360 | | $16,906 | |
| (a) The cash flows related to discontinued operations and held-for-sale assets and liabilities have not been segregated. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. |
VSE Corporation and Subsidiaries
Unaudited Consolidated Statements of Cash Flows (continued)
(in thousands)
| Six months ended June 30, |
|---|
| (in thousands) | | 2026 | | 2025 |
| Supplemental disclosure of noncash investing and financing activities: | | |
| In-kind equity purchase consideration from acquisition | $238,002 | | $ - | |
| Earn-out obligation purchase consideration from acquisition | $33,850 | | $ - | |
| Note receivable from the sale of business segment | $ - | | $25,000 | |
| Earn-out receivable from the sale of business segment | $ - | | $29,200 | |
Contacts
Michael Perlman
VP, Investor Relations & Treasury
T: (954) 547-0480 M: (561) 281-0247 investors@vsecorp.com