Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 24, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-03676 | |
Entity Registrant Name | VSE CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 54-0649263 | |
Entity Address, Address Line One | 6348 Walker Lane | |
Entity Address, City or Town | Alexandria, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22310 | |
City Area Code | 703 | |
Local Phone Number | 960-4600 | |
Title of 12(b) Security | Common Stock, par value $0.05 per share | |
Trading Symbol | VSEC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 15,372,544 | |
Entity Central Index Key | 0000102752 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 4,163 | $ 305 |
Receivables (net of allowance of $2.5 million and $2.0 million, respectively) | 114,154 | 90,599 |
Unbilled receivables | 6,229 | 7,409 |
Inventories | 427,822 | 380,438 |
Other current assets | 14,797 | 15,202 |
Current assets held-for-sale | 107,059 | 54,925 |
Total current assets | 674,224 | 548,878 |
Noncurrent assets: | ||
Property and equipment (net of accumulated depreciation of $33.6 million and $30.7 million, respectively) | 43,992 | 40,501 |
Intangible assets (net of accumulated amortization of $128.8 million and $121.3 million, respectively) | 82,818 | 86,558 |
Goodwill | 222,023 | 217,262 |
Operating lease - right-of-use assets | 20,194 | 21,558 |
Other assets | 30,220 | 29,019 |
Non-current assets held-for-sale | 0 | 56,013 |
Total assets | 1,073,471 | 999,789 |
Current liabilities: | ||
Current portion of long-term debt | 10,000 | 10,000 |
Accounts payable | 104,566 | 128,504 |
Accrued expenses and other current liabilities | 30,295 | 31,889 |
Dividends payable | 1,290 | 1,282 |
Current liabilities held-for-sale | 64,070 | 52,929 |
Total current liabilities | 210,221 | 224,604 |
Noncurrent liabilities: | ||
Long-term debt, less current portion | 365,110 | 276,300 |
Deferred compensation | 7,651 | 7,398 |
Long-term operating lease obligations | 17,609 | 19,154 |
Deferred tax liabilities | 3,743 | 4,986 |
Non-current liabilities held-for-sale | 0 | 17,821 |
Total liabilities | 604,334 | 550,263 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock, par value $0.05 per share, authorized 23,000,000 shares; issued and outstanding 12,897,544 and 12,816,613, respectively | 645 | 641 |
Additional paid-in capital | 96,471 | 92,620 |
Retained earnings | 366,690 | 351,297 |
Accumulated other comprehensive income | 5,331 | 4,968 |
Total stockholders' equity | 469,137 | 449,526 |
Total liabilities and stockholders' equity | $ 1,073,471 | $ 999,789 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Stockholders' equity: | ||
Allowance for credit loss | $ 2,500 | $ 2,000 |
Accumulated depreciation | (33,600) | (30,700) |
Accumulated amortization | $ (128,792) | $ (121,252) |
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, authorized (in shares) | 23,000,000 | 23,000,000 |
Common stock, issued (in shares) | 12,897,544 | 12,816,613 |
Common stock, outstanding (in shares) | 12,897,544 | 12,816,613 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Revenues: | ||||||
Total revenues | $ 205,223 | $ 169,761 | $ 393,810 | $ 330,081 | ||
Costs and operating expenses: | ||||||
Selling, general and administrative expenses | 1,519 | 473 | 3,564 | 1,180 | ||
Amortization of intangible assets | 3,601 | 4,016 | 7,540 | 8,110 | ||
Total costs and operating expenses | 184,586 | 159,226 | 356,395 | 307,529 | ||
Operating income | 20,637 | 10,535 | 37,415 | 22,552 | ||
Interest expense, net | 7,366 | 3,872 | 13,346 | 7,482 | ||
Income from continuing operations before income taxes | 13,271 | 6,663 | 24,069 | 15,070 | ||
Provision for income taxes | 3,182 | 1,908 | 5,860 | 4,026 | ||
Income from continuing operations | 10,089 | 4,755 | 18,209 | 11,044 | ||
(Loss) income from discontinued operations, net of tax | (1,234) | 2,793 | (237) | 2,748 | ||
Net income | $ 8,855 | $ 7,548 | $ 17,972 | [1] | $ 13,792 | [1] |
Earnings (loss) per share: | ||||||
Basic earnings per share, continuing operations (in dollars per share) | $ 0.78 | $ 0.37 | $ 1.42 | $ 0.87 | ||
Basic earnings (loss) per share, discontinued operations (in dollars per share) | (0.10) | 0.22 | (0.02) | 0.21 | ||
Basic earnings (loss) per share (in dollars per share) | 0.68 | 0.59 | 1.40 | 1.08 | ||
Diluted | ||||||
Diluted earnings per share, continuing operations (in dollars per share) | 0.78 | 0.37 | 1.42 | 0.87 | ||
Diluted earnings (loss) per share, discontinued operations (in dollars per share) | (0.10) | 0.22 | (0.02) | 0.21 | ||
Diluted earnings (loss) per share (in dollars per share) | $ 0.68 | $ 0.59 | $ 1.40 | $ 1.08 | ||
Weighted average shares outstanding: | ||||||
Basic weighted average shares outstanding (in shares) | 12,886,100 | 12,778,355 | 12,865,394 | 12,760,026 | ||
Diluted weighted average shares outstanding (in shares) | 12,916,998 | 12,811,078 | 12,921,826 | 12,807,249 | ||
Dividends declared per share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.20 | ||
Products | ||||||
Revenues: | ||||||
Total revenues | $ 165,997 | $ 142,003 | $ 320,443 | $ 278,172 | ||
Costs and operating expenses: | ||||||
Costs and operating expenses | 147,139 | 129,617 | 282,388 | 250,714 | ||
Services | ||||||
Revenues: | ||||||
Total revenues | 39,226 | 27,758 | 73,367 | 51,909 | ||
Costs and operating expenses: | ||||||
Costs and operating expenses | $ 32,327 | $ 25,120 | $ 62,903 | $ 47,525 | ||
[1](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. |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 8,855 | $ 7,548 | $ 17,972 | [1] | $ 13,792 | [1] |
Change in fair value of interest rate swap agreements, net of tax | 2,361 | 0 | 363 | 176 | ||
Total other comprehensive income, net of tax | 2,361 | 0 | 363 | 176 | ||
Comprehensive income | $ 11,216 | $ 7,548 | $ 18,335 | $ 13,968 | ||
[1](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. |
Unaudited Consolidated Statem_3
Unaudited Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | |
Balance, beginning balance (in shares) at Dec. 31, 2021 | 12,727,000 | |||||
Balance, beginning balance at Dec. 31, 2021 | $ 417,333 | $ 636 | $ 88,515 | $ 328,358 | $ (176) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 13,792 | [1] | 13,792 | |||
Stock-based compensation (in shares) | 68,000 | |||||
Stock-based compensation | 2,540 | $ 4 | 2,536 | |||
Other comprehensive income (loss), net of tax | 176 | 176 | ||||
Dividends declared | (2,558) | (2,558) | ||||
Balance, ending balance (in shares) at Jun. 30, 2022 | 12,795,000 | |||||
Balance, ending balance at Jun. 30, 2022 | 431,283 | $ 640 | 91,051 | 339,592 | 0 | |
Balance, beginning balance (in shares) at Mar. 31, 2022 | 12,769,000 | |||||
Balance, beginning balance at Mar. 31, 2022 | 423,792 | $ 638 | 89,830 | 333,324 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 7,548 | |||||
Stock-based compensation (in shares) | 26,000 | |||||
Stock-based compensation | 1,223 | $ 2 | 1,221 | |||
Other comprehensive income (loss), net of tax | 0 | 0 | ||||
Dividends declared | (1,280) | (1,280) | ||||
Balance, ending balance (in shares) at Jun. 30, 2022 | 12,795,000 | |||||
Balance, ending balance at Jun. 30, 2022 | $ 431,283 | $ 640 | 91,051 | 339,592 | 0 | |
Balance, beginning balance (in shares) at Dec. 31, 2022 | 12,816,613 | 12,817,000 | ||||
Balance, beginning balance at Dec. 31, 2022 | $ 449,526 | $ 641 | 92,620 | 351,297 | 4,968 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 17,972 | [1] | 17,972 | |||
Stock-based compensation (in shares) | 81,000 | |||||
Stock-based compensation | 3,855 | $ 4 | 3,851 | |||
Other comprehensive income (loss), net of tax | 363 | |||||
Dividends declared | $ (2,579) | (2,579) | ||||
Balance, ending balance (in shares) at Jun. 30, 2023 | 12,897,544 | 12,898,000 | ||||
Balance, ending balance at Jun. 30, 2023 | $ 469,137 | $ 645 | 96,471 | 366,690 | 5,331 | |
Balance, beginning balance (in shares) at Mar. 31, 2023 | 12,886,000 | |||||
Balance, beginning balance at Mar. 31, 2023 | 457,315 | $ 644 | 94,577 | 359,124 | 2,970 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 8,855 | 8,855 | ||||
Stock-based compensation (in shares) | 12,000 | |||||
Stock-based compensation | 1,895 | $ 1 | 1,894 | |||
Other comprehensive income (loss), net of tax | 2,361 | |||||
Dividends declared | $ (1,289) | (1,289) | ||||
Balance, ending balance (in shares) at Jun. 30, 2023 | 12,897,544 | 12,898,000 | ||||
Balance, ending balance at Jun. 30, 2023 | $ 469,137 | $ 645 | $ 96,471 | $ 366,690 | $ 5,331 | |
[1](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. |
Unaudited Consolidated Statem_4
Unaudited Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.20 |
Unaudited Consolidated Statem_5
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | ||
Cash flows from operating activities: | |||
Net income | [1] | $ 17,972 | $ 13,792 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | [1] | 12,011 | 12,430 |
Amortization of debt issuance cost | [1] | 420 | 420 |
Deferred taxes | [1] | (1,533) | (790) |
Stock-based compensation | [1] | 3,894 | 2,675 |
Provision for inventory | [1] | 742 | 1,094 |
Changes in operating assets and liabilities, net of impact of acquisitions: | |||
Receivables, net | [1] | (21,082) | (25,607) |
Unbilled Receivables, net | [1] | (110) | (9,428) |
Inventories, net | [1] | (45,580) | (16,145) |
Other current assets and other assets | [1] | (1,274) | 6,036 |
Operating lease assets and liabilities, net | [1] | 67 | 69 |
Accounts payable and deferred compensation | [1] | (27,429) | (4,848) |
Accrued expenses and other current and noncurrent liabilities | [1] | (3,055) | 302 |
Net cash used in operating activities | [1] | (65,091) | (20,138) |
Cash flows from investing activities: | |||
Purchases of property and equipment | [1] | (6,137) | (2,746) |
Proceeds from the payment on notes receivable | [1] | 1,557 | 3,073 |
Cash paid for acquisitions, net of cash acquired | [1] | (11,711) | 0 |
Net cash (used in) provided by investing activities | [1] | (16,291) | 327 |
Cash flows from financing activities: | |||
Borrowings on loan agreement | [1] | 322,813 | 236,194 |
Repayments on loan agreement | [1] | (234,423) | (212,572) |
Proceeds from issuance of common stock | [1] | 456 | 486 |
Earn-out obligation payments | [1] | 0 | (1,000) |
Payment of taxes for equity transactions | [1] | (1,031) | (892) |
Dividends paid | [1] | (2,571) | (2,552) |
Net cash provided by financing activities | [1] | 85,244 | 19,664 |
Net increase (decrease) in cash and cash equivalents | [1] | 3,862 | (147) |
Cash and cash equivalents, beginning of period | [1] | 478 | 518 |
Cash and cash equivalents, end of period | [1] | $ 4,340 | $ 371 |
[1](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. |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Nature of Operations VSE Corporation (“VSE,” the “Company,” “we,” “us,” or “our”) is a diversified aftermarket products and services company providing maintenance, repair and overhaul ("MRO") services, parts distribution, logistics, supply chain management and consulting services for transportation assets to commercial and government markets. Basis of Presentation Our accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to SEC Form 10-Q and Article 10 of SEC Regulation S-X. Therefore, such financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K"). In our opinion, all adjustments, including normal recurring items, considered necessary for a fair presentation of results for the interim periods have been included in the accompanying unaudited consolidated financial statements. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. On May 1, 2023, we entered into a definitive agreement to sell our Federal and Defense segment. The consolidated financial statements present the Federal and Defense segment's results of operations as discontinued operations, and the related assets and liabilities as held-for-sale for all periods presented. See Note (3) "Discontinued Operations" for further discussion. Following the completion of the sale transaction, our operations are conducted under two operating segments: Aviation and Fleet. Certain reclassifications have been made to the prior period financial information to reflect discontinued operations classification. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates affecting the financial statements include fair value measurements, inventory provisions, collectability of receivables, estimated profitability of long-term contracts, valuation allowances on deferred tax assets, fair value of goodwill and other intangible assets and contingencies. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Precision Fuel Components, LLC On February 1, 2023, our Aviation segment acquired Precision Fuel Components, LLC ("Precision Fuel") for a purchase price of $11.7 million. Precision Fuel provides MRO services for engine accessory and fuel systems supporting the business and general aviation ("B&GA") market. Our acquisition of Precision Fuel expanded our MRO capabilities and client base. Precision Fuel operating results are included in the accompanying consolidated financial statements beginning on the acquisition date. The acquisition was not material to our consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On May 1, 2023, we entered into a definitive agreement to sell our Federal and Defense business to Bernhard Capital Partners Management LP for total consideration of up to $100.0 million, consisting of a $50.0 million cash payment at the closing of the transaction and an earn-out payment of up to $50.0 million subject to the achievement of certain milestones. The transaction is expected to close in late 2023 to early 2024 and is subject to customary closing conditions and approvals. The results of operations from discontinued operations for the three and six months ended June 30, 2023 and 2022, consist of the following (in thousands): For the three months ended June 30, For the six months ended June 30, 2023 2022 2023 2022 Revenues $ 67,039 $ 71,953 $ 133,885 $ 142,871 (Loss) income from discontinued operations before income taxes $ (1,779) $ 3,616 $ (621) $ 3,514 Provision for income taxes (545) 823 (384) 766 Net (loss) income from discontinued operations $ (1,234) $ 2,793 $ (237) $ 2,748 The assets and liabilities reported as held for sale consist of the following (in thousands): June 30, December 31, 2023 2022 Assets Cash and cash equivalents $ 178 $ 173 Accounts receivable, net 12,385 14,340 Unbilled receivables 32,188 30,898 Inventories 453 270 Other current assets 8,760 9,244 Property and equipment, net 6,612 7,467 Intangible assets, net 3,505 4,066 Goodwill 31,575 31,575 Operating lease right-of-use assets 11,369 12,854 Other assets 34 51 Total assets held-for-sale (a) $ 107,059 $ 110,938 Liabilities Accounts payable $ 27,810 $ 31,096 Accrued expenses and other current liabilities 20,609 21,833 Long-term operating lease obligations 11,186 13,186 Deferred tax liabilities 4,465 4,635 Total liabilities held-for-sale (a) $ 64,070 $ 70,750 (a) Amounts have been classified as current for the current period consolidated balance sheet and as current and non-current in the consolidated balance sheet for the prior year period. Selected financial information related to cash flows from discontinued operations is as follows (in thousands): For the six months ended June 30, 2023 2022 Depreciation and amortization $ 1,437 $ 1,917 Purchases of property and equipment $ 92 $ 144 Stock-based compensation $ 73 $ 20 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenues Our revenues are derived from the delivery of products to our customers and from services performed for commercial and governmental customers. A summary of revenues by customer for each of our operating segments for the three and six months ended June 30, 2023 and 2022 is as follows (in thousands): Three months ended June 30, 2023 Six months ended June 30, 2023 Aviation Fleet Total Aviation Fleet Total Commercial $ 123,820 $ 38,037 $ 161,857 $ 235,880 $ 70,581 $ 306,461 Other government 909 42,457 43,366 2,084 85,265 87,349 Total $ 124,729 $ 80,494 $ 205,223 $ 237,964 $ 155,846 $ 393,810 Three months ended June 30, 2022 Six months ended June 30, 2022 Aviation Fleet Total Aviation Fleet Total Commercial $ 103,349 $ 26,007 $ 129,356 $ 195,261 $ 53,863 $ 249,124 DoD — 1,264 1,264 — 2,993 2,993 Other government 1,670 37,471 39,141 3,048 74,916 77,964 Total $ 105,019 $ 64,742 $ 169,761 $ 198,309 $ 131,772 $ 330,081 A summary of revenues by type for each of our operating segments for the three and six months ended June 30, 2023 and 2022 is as follows (in thousands): Three months ended June 30, 2023 Six months ended June 30, 2023 Aviation Fleet Total Aviation Fleet Total Repair $ 35,561 $ — $ 35,561 $ 67,615 $ — $ 67,615 Distribution 89,168 80,494 169,662 170,349 155,846 326,195 Total $ 124,729 $ 80,494 $ 205,223 $ 237,964 $ 155,846 $ 393,810 Three months ended June 30, 2022 Six months ended June 30, 2022 Aviation Fleet Total Aviation Fleet Total Repair $ 25,966 $ — $ 25,966 $ 48,329 $ — $ 48,329 Distribution 79,053 64,742 143,795 149,980 131,772 281,752 Total $ 105,019 $ 64,742 $ 169,761 $ 198,309 $ 131,772 $ 330,081 Contract Balances Contract balances were as follows (in thousands): June 30, December 31, Financial Statement Classification 2023 2022 Contract assets Unbilled receivables $ 6,229 $ 7,409 Contract liabilities Accrued expenses and other current liabilities $ 2,561 $ 963 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following (in thousands): June 30, December 31, 2023 2022 Bank credit facility - term loan $ 95,000 $ 100,000 Bank credit facility - revolving facility 282,000 188,610 Principal amount of long-term debt 377,000 288,610 Less debt issuance costs (1,890) (2,310) Total long-term debt 375,110 286,300 Less current portion (10,000) (10,000) Long-term debt, less current portion $ 365,110 $ 276,300 Borrowings under our term loan and revolving facility mature in October 2025. As of June 30, 2023, the interest rate on our outstanding term loan borrowings and weighted average interest rate on our aggregate outstanding revolving facility was 7.51% and 7.62%, respectively. Interest expense incurred on our term loan and revolving facility was $7.9 million and $14.3 million for the three and six months ended June 30, 2023, respectively, and $3.7 million and $7.1 million for the three and six months ended June 30, 2022, respectively. We had letters of credit outstanding of $0.7 million and $1.0 million as of June 30, 2023 and December 31, 2022, respectively. Future required term loan and revolving facility payments as of June 30, 2023 are as follows (in thousands): Year Ending Term Loan Revolving Facility Total Remainder of 2023 $ 5,000 $ — $ 5,000 2024 10,000 — 10,000 2025 80,000 282,000 362,000 Total $ 95,000 $ 282,000 $ 377,000 We were in compliance with required ratios and other terms and conditions under our credit agreement as of June 30, 2023. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Our derivative instruments designated as cash flow hedges as of June 30, 2023 were (in thousands): Notional Amount Paid Fixed Rate Receive Variable Rate Settlement and Termination Interest rate swaps $150,000 2.8% 1-month term SOFR Monthly through October 31, 2027 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares of common stock outstanding during each period. Shares issued during the period are weighted for the portion of the period that they were outstanding. Our calculation of diluted earnings per common share includes the dilutive effects for the assumed vesting of outstanding stock-based awards. There were no antidilutive common stock equivalents excluded from the diluted per share calculation. The weighted-average number of shares outstanding used to compute basic and diluted EPS were as follows: Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Basic weighted average common shares outstanding 12,886,100 12,778,355 12,865,394 12,760,026 Effect of dilutive shares 30,898 32,723 56,432 47,223 Diluted weighted average common shares outstanding 12,916,998 12,811,078 12,921,826 12,807,249 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies We may have certain claims in the normal course of business, including legal proceedings, against us and against other parties. In our opinion, the resolution of these claims will not have a material adverse effect on our results of operations, financial position or cash flows. Further, from time-to-time, government agencies audit or investigate whether our operations are being conducted in accordance with applicable contractual and regulatory requirements. Government audits or investigations of us, whether relating to government contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon us, or could lead to suspension or debarment from future government contracting. Government investigations often take years to complete and many result in no adverse action against us. We believe, based upon current information, that the outcome of any such government disputes, audits and investigations will not have a material adverse effect on our results of operations, financial condition or cash flows. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The sale of the Federal and Defense segment is intended to allow us to advance our focus on long-term strategic growth areas. Following the completion of the sale transaction, management of our business operations is conducted under two reportable operating segments: Aviation Our Aviation segment provides aftermarket repair and distribution services to commercial, business and general aviation, cargo, military and defense, and rotorcraft customers globally. Core services include parts distribution, engine accessory maintenance, MRO services, rotable exchange and supply chain services. Fleet Our Fleet segment provides parts, inventory management, e-commerce fulfillment, logistics, supply chain support and other services to support the commercial aftermarket medium- and heavy-duty truck market, and the United States Postal Service ("USPS"). Core services include vehicle parts distribution, sourcing, IT solutions, customized fleet logistics, warehousing, kitting, just-in-time supply chain management, alternative product sourcing, and engineering and technical support. We evaluate segment performance based on consolidated revenues and operating income. Net sales of our business segments exclude inter-segment sales as these activities are eliminated in consolidation. Corporate expenses are primarily selling, general and administrative expenses not allocated to segments. Our segment information is as follows (in thousands): Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Revenues: Aviation $ 124,729 $ 105,019 $ 237,964 $ 198,309 Fleet 80,494 64,742 155,846 131,772 Total revenues $ 205,223 $ 169,761 $ 393,810 $ 330,081 Operating income (loss): Aviation $ 15,783 $ 6,450 $ 31,447 $ 14,072 Fleet 7,854 5,366 13,753 11,747 Corporate/unallocated expenses (a) (3,000) (1,281) (7,785) (3,267) Operating income $ 20,637 $ 10,535 $ 37,415 $ 22,552 (a) Certain corporate costs previously allocated to the Federal and Defense business for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Changes in the carrying amount of goodwill by segment for the six months ended June 30, 2023 were as follows (in thousands): Aviation Fleet Total Balance as of December 31, 2022 $ 154,072 $ 63,190 $ 217,262 Acquisitions 4,761 — 4,761 Balance as of June 30, 2023 $ 158,833 $ 63,190 $ 222,023 Goodwill increased during the six months ended June 30, 2023 in connection with the acquisition during the period as discussed in Note (2) "Acquisitions." Intangible Assets Intangible assets consisted of the following (in thousands): Gross carrying value Accumulated amortization Net carrying value June 30, 2023 Contract and customer-related $ 202,940 $ (120,760) $ 82,180 Trade names 8,670 (8,032) 638 Total $ 211,610 $ (128,792) $ 82,818 December 31, 2022 Contract and customer-related $ 199,140 $ (113,796) $ 85,344 Trade names 8,670 (7,456) 1,214 Total $ 207,810 $ (121,252) $ 86,558 The gross carrying amount of contract and customer-related intangibles increased during the six months ended June 30, 2023 in connection with the acquisition during the period as discussed in Note (2) "Acquisitions." As of June 30, 2023, the estimated future annual amortization expense related to intangible assets is as follows (in thousands): Year Ending Remainder of 2023 $ 5,114 2024 9,136 2025 9,074 2026 8,950 2027 7,204 Thereafter 43,340 Total $ 82,818 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 and the level they fall within the fair value hierarchy (in thousands): Amounts Recorded at Fair Value Financial Statement Classification Fair Value Hierarchy Fair Value June 30, 2023 Fair Value December 31, 2022 Non-COLI assets held in Deferred Supplemental Compensation Plan (a) Other assets Level 1 $ 576 $ 539 Interest rate swaps Other assets Level 2 $ 7,103 $ 6,620 (a) Non-Company Owned Life Insurance ("COLI") assets held in our deferred supplemental compensation plan consist of equity funds with fair value based on observable inputs such as quoted prices for identical assets in active markets and changes in fair value are recorded as selling, general and administrative expenses. The carrying amounts of cash and cash equivalents, receivables, accounts payable and amounts included in other current assets and accrued expenses and other current liabilities that meet the definition of a financial instrument approximate fair value due to their relatively short maturity. The carrying value of our outstanding debt obligations approximates its fair value. The fair value of long-term debt is calculated using Level 2 inputs based on interest rates available for debt with terms and maturities similar to our existing debt arrangements. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete items that are recorded in the period in which they occur. Our tax rate is affected by discrete items that may occur in any given year but may not be consistent from year to year. Our effective tax rate for continued operations was 24.0% and 24.3% for the three and six months ended June 30, 2023, respectively, and 28.6% and 26.7% for the three and six months ended June 30, 2022, respectively. The effective tax rate was lower for the three and six months ended June 30, 2023 compared to the same period of prior year primarily due to book income in connection with the fair market value increase in our COLI plan in the period ended June 30, 2023 that was reversed for tax purposes as opposed to book expense in the same period in 2022. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Desser Aerospace Acquisition In July 2023, we completed our previously announced acquisition of Desser-Graham Partnership, L.P. ("Desser Aerospace"), pursuant to the terms of the purchase agreement dated May 3, 2023, for a preliminary purchase price of $124.0 million, subject to post-closing adjustments. Concurrent with the closing of the transaction, we sold, in a separate transaction, Desser Aerospace’s propriety solutions businesses to Loar Group Inc. (“Loar”) for cash consideration of $30.0 million (the “Loar Sale”). During the three and six months ended June 30, 2023, we incurred $0.6 million and $1.7 million, respectively, of acquisition-related expenses, which are included in selling, general and administrative expenses. Credit Agreement Amendment In July 2023, we entered into a fifth amendment to our credit agreement which, among other things, provided for the following: (i) the extension of a new term loan in the aggregate principal amount of $90.0 million, which will mature on the same date as the existing term loan; (ii) a reduction in our capacity to incur incremental revolving or term loan credit facilities from $100.0 million to $25.0 million; (iii) quarterly amortization payments for the new term loan in the amount of $2.25 million; (iv) an increase in the maximum Total Funded Debt to EBITDA Ratio from 4.50x to 5.00x, with such ratios decreasing thereafter; (v) the addition of a tier to the top of the pricing grid if the Total Funded Debt to EBITDA ratio exceeds 4.50x; and (vi) expressly permitting the Desser acquisition and the Loar Sale. The net proceeds received under the new term loan were used to fund a portion of the cash consideration for the Desser Aerospace acquisition. Interest Rate Swap Derivative In July 2023, we executed a fixed interest rate swap that hedges the variability in interest payments on $100.0 million of floating rate debt. We have designated, and will account for, this fixed interest rate swap as a cash flow hedge. Underwritten Public Offering In July 2023, we entered into an underwriting agreement with William Blair & Company, L.L.C and RBC Capital Markets, acting as representatives of several underwriters, relating to the issuance and sale of 2,475,000 shares of the Company's common stock at a public offering price of $48.50 per share. Under the terms of the agreement, we granted the underwriters an option, exercisable for 30 days, to purchase up to an additional 371,250 shares of common stock. The offering closed on July 24, 2023 and we received net proceeds of $112.7 million in connection with the offering, net of issuance costs. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Pay vs Performance Disclosure | ||||||
Net income | $ 8,855 | $ 7,548 | $ 17,972 | [1] | $ 13,792 | [1] |
[1](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. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Our accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to SEC Form 10-Q and Article 10 of SEC Regulation S-X. Therefore, such financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K"). In our opinion, all adjustments, including normal recurring items, considered necessary for a fair presentation of results for the interim periods have been included in the accompanying unaudited consolidated financial statements. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. On May 1, 2023, we entered into a definitive agreement to sell our Federal and Defense segment. The consolidated financial statements present the Federal and Defense segment's results of operations as discontinued operations, and the related assets and liabilities as held-for-sale for all periods presented. See Note (3) "Discontinued Operations" for further discussion. Following the completion of the sale transaction, our operations are conducted under two operating segments: Aviation and Fleet. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates affecting the financial statements include fair value measurements, inventory provisions, collectability of receivables, estimated profitability of long-term contracts, valuation allowances on deferred tax assets, fair value of goodwill and other intangible assets and contingencies. |
Earnings Per Share | Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares of common stock outstanding during each period. Shares issued during the period are weighted for the portion of the period that they were outstanding. Our calculation of diluted earnings per common share includes the dilutive effects for the assumed vesting of outstanding stock-based awards. |
Business Segments | Aviation Our Aviation segment provides aftermarket repair and distribution services to commercial, business and general aviation, cargo, military and defense, and rotorcraft customers globally. Core services include parts distribution, engine accessory maintenance, MRO services, rotable exchange and supply chain services. Fleet Our Fleet segment provides parts, inventory management, e-commerce fulfillment, logistics, supply chain support and other services to support the commercial aftermarket medium- and heavy-duty truck market, and the United States Postal Service ("USPS"). Core services include vehicle parts distribution, sourcing, IT solutions, customized fleet logistics, warehousing, kitting, just-in-time supply chain management, alternative product sourcing, and engineering and technical support. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The results of operations from discontinued operations for the three and six months ended June 30, 2023 and 2022, consist of the following (in thousands): For the three months ended June 30, For the six months ended June 30, 2023 2022 2023 2022 Revenues $ 67,039 $ 71,953 $ 133,885 $ 142,871 (Loss) income from discontinued operations before income taxes $ (1,779) $ 3,616 $ (621) $ 3,514 Provision for income taxes (545) 823 (384) 766 Net (loss) income from discontinued operations $ (1,234) $ 2,793 $ (237) $ 2,748 The assets and liabilities reported as held for sale consist of the following (in thousands): June 30, December 31, 2023 2022 Assets Cash and cash equivalents $ 178 $ 173 Accounts receivable, net 12,385 14,340 Unbilled receivables 32,188 30,898 Inventories 453 270 Other current assets 8,760 9,244 Property and equipment, net 6,612 7,467 Intangible assets, net 3,505 4,066 Goodwill 31,575 31,575 Operating lease right-of-use assets 11,369 12,854 Other assets 34 51 Total assets held-for-sale (a) $ 107,059 $ 110,938 Liabilities Accounts payable $ 27,810 $ 31,096 Accrued expenses and other current liabilities 20,609 21,833 Long-term operating lease obligations 11,186 13,186 Deferred tax liabilities 4,465 4,635 Total liabilities held-for-sale (a) $ 64,070 $ 70,750 (a) Amounts have been classified as current for the current period consolidated balance sheet and as current and non-current in the consolidated balance sheet for the prior year period. Selected financial information related to cash flows from discontinued operations is as follows (in thousands): For the six months ended June 30, 2023 2022 Depreciation and amortization $ 1,437 $ 1,917 Purchases of property and equipment $ 92 $ 144 Stock-based compensation $ 73 $ 20 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | A summary of revenues by customer for each of our operating segments for the three and six months ended June 30, 2023 and 2022 is as follows (in thousands): Three months ended June 30, 2023 Six months ended June 30, 2023 Aviation Fleet Total Aviation Fleet Total Commercial $ 123,820 $ 38,037 $ 161,857 $ 235,880 $ 70,581 $ 306,461 Other government 909 42,457 43,366 2,084 85,265 87,349 Total $ 124,729 $ 80,494 $ 205,223 $ 237,964 $ 155,846 $ 393,810 Three months ended June 30, 2022 Six months ended June 30, 2022 Aviation Fleet Total Aviation Fleet Total Commercial $ 103,349 $ 26,007 $ 129,356 $ 195,261 $ 53,863 $ 249,124 DoD — 1,264 1,264 — 2,993 2,993 Other government 1,670 37,471 39,141 3,048 74,916 77,964 Total $ 105,019 $ 64,742 $ 169,761 $ 198,309 $ 131,772 $ 330,081 A summary of revenues by type for each of our operating segments for the three and six months ended June 30, 2023 and 2022 is as follows (in thousands): Three months ended June 30, 2023 Six months ended June 30, 2023 Aviation Fleet Total Aviation Fleet Total Repair $ 35,561 $ — $ 35,561 $ 67,615 $ — $ 67,615 Distribution 89,168 80,494 169,662 170,349 155,846 326,195 Total $ 124,729 $ 80,494 $ 205,223 $ 237,964 $ 155,846 $ 393,810 Three months ended June 30, 2022 Six months ended June 30, 2022 Aviation Fleet Total Aviation Fleet Total Repair $ 25,966 $ — $ 25,966 $ 48,329 $ — $ 48,329 Distribution 79,053 64,742 143,795 149,980 131,772 281,752 Total $ 105,019 $ 64,742 $ 169,761 $ 198,309 $ 131,772 $ 330,081 Contract balances were as follows (in thousands): June 30, December 31, Financial Statement Classification 2023 2022 Contract assets Unbilled receivables $ 6,229 $ 7,409 Contract liabilities Accrued expenses and other current liabilities $ 2,561 $ 963 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following (in thousands): June 30, December 31, 2023 2022 Bank credit facility - term loan $ 95,000 $ 100,000 Bank credit facility - revolving facility 282,000 188,610 Principal amount of long-term debt 377,000 288,610 Less debt issuance costs (1,890) (2,310) Total long-term debt 375,110 286,300 Less current portion (10,000) (10,000) Long-term debt, less current portion $ 365,110 $ 276,300 |
Schedule of Term Loan Payments | Future required term loan and revolving facility payments as of June 30, 2023 are as follows (in thousands): Year Ending Term Loan Revolving Facility Total Remainder of 2023 $ 5,000 $ — $ 5,000 2024 10,000 — 10,000 2025 80,000 282,000 362,000 Total $ 95,000 $ 282,000 $ 377,000 We were in compliance with required ratios and other terms and conditions under our credit agreement as of June 30, 2023. |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | Our derivative instruments designated as cash flow hedges as of June 30, 2023 were (in thousands): Notional Amount Paid Fixed Rate Receive Variable Rate Settlement and Termination Interest rate swaps $150,000 2.8% 1-month term SOFR Monthly through October 31, 2027 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The weighted-average number of shares outstanding used to compute basic and diluted EPS were as follows: Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Basic weighted average common shares outstanding 12,886,100 12,778,355 12,865,394 12,760,026 Effect of dilutive shares 30,898 32,723 56,432 47,223 Diluted weighted average common shares outstanding 12,916,998 12,811,078 12,921,826 12,807,249 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Our segment information is as follows (in thousands): Three months ended June 30, Six months ended June 30, 2023 2022 2023 2022 Revenues: Aviation $ 124,729 $ 105,019 $ 237,964 $ 198,309 Fleet 80,494 64,742 155,846 131,772 Total revenues $ 205,223 $ 169,761 $ 393,810 $ 330,081 Operating income (loss): Aviation $ 15,783 $ 6,450 $ 31,447 $ 14,072 Fleet 7,854 5,366 13,753 11,747 Corporate/unallocated expenses (a) (3,000) (1,281) (7,785) (3,267) Operating income $ 20,637 $ 10,535 $ 37,415 $ 22,552 (a) Certain corporate costs previously allocated to the Federal and Defense business for segment reporting purposes did not qualify for classification within discontinued operations and have been reallocated to continuing operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by Operating Segment | Changes in the carrying amount of goodwill by segment for the six months ended June 30, 2023 were as follows (in thousands): Aviation Fleet Total Balance as of December 31, 2022 $ 154,072 $ 63,190 $ 217,262 Acquisitions 4,761 — 4,761 Balance as of June 30, 2023 $ 158,833 $ 63,190 $ 222,023 |
Schedule of Intangible Assets | Intangible assets consisted of the following (in thousands): Gross carrying value Accumulated amortization Net carrying value June 30, 2023 Contract and customer-related $ 202,940 $ (120,760) $ 82,180 Trade names 8,670 (8,032) 638 Total $ 211,610 $ (128,792) $ 82,818 December 31, 2022 Contract and customer-related $ 199,140 $ (113,796) $ 85,344 Trade names 8,670 (7,456) 1,214 Total $ 207,810 $ (121,252) $ 86,558 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of June 30, 2023, the estimated future annual amortization expense related to intangible assets is as follows (in thousands): Year Ending Remainder of 2023 $ 5,114 2024 9,136 2025 9,074 2026 8,950 2027 7,204 Thereafter 43,340 Total $ 82,818 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 and the level they fall within the fair value hierarchy (in thousands): Amounts Recorded at Fair Value Financial Statement Classification Fair Value Hierarchy Fair Value June 30, 2023 Fair Value December 31, 2022 Non-COLI assets held in Deferred Supplemental Compensation Plan (a) Other assets Level 1 $ 576 $ 539 Interest rate swaps Other assets Level 2 $ 7,103 $ 6,620 (a) Non-Company Owned Life Insurance ("COLI") assets held in our deferred supplemental compensation plan consist of equity funds with fair value based on observable inputs such as quoted prices for identical assets in active markets and changes in fair value are recorded as selling, general and administrative expenses. |
Nature of Operations and Basi_3
Nature of Operations and Basis of Presentation (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 2 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Feb. 01, 2023 | Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 222,023 | $ 222,023 | $ 217,262 | |
Acquisition related expenses | $ 600 | 1,700 | ||
Precision Fuel | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 11,700 | |||
Goodwill | 4,800 | |||
Acquisition related expenses | $ 200 | |||
Precision Fuel | Net Tangible Assets, Excluding Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 3,100 | |||
Precision Fuel | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 3,800 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Federal And Defense Segment $ in Millions | May 01, 2023 USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Consideration on disposal | $ 100 |
Proceeds from sale of business | 50 |
Earn-out payments to be received | $ 50 |
Discontinued Operations - Incom
Discontinued Operations - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
(Loss) income from discontinued operations, net of tax | $ (1,234) | $ 2,793 | $ (237) | $ 2,748 |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Federal And Defense Segment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues | 67,039 | 71,953 | 133,885 | 142,871 |
(Loss) income from discontinued operations before income taxes | (1,779) | 3,616 | (621) | 3,514 |
Provision for income taxes | (545) | 823 | (384) | 766 |
(Loss) income from discontinued operations, net of tax | $ (1,234) | $ 2,793 | $ (237) | $ 2,748 |
Discontinued Operations - Balan
Discontinued Operations - Balance Sheet (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Federal And Defense Segment - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 178 | $ 173 |
Accounts receivable, net | 12,385 | 14,340 |
Unbilled receivables | 32,188 | 30,898 |
Inventories | 453 | 270 |
Other current assets | 8,760 | 9,244 |
Property and equipment, net | 6,612 | 7,467 |
Intangible assets, net | 3,505 | 4,066 |
Goodwill | 31,575 | 31,575 |
Operating lease right-of-use assets | 11,369 | 12,854 |
Other assets | 34 | 51 |
Total assets of discontinued operations | 107,059 | 110,938 |
Liabilities | ||
Accounts payable | 27,810 | 31,096 |
Accrued expenses and other current liabilities | 20,609 | 21,833 |
Long-term operating lease obligations | 11,186 | 13,186 |
Deferred tax liabilities | 4,465 | 4,635 |
Total liabilities of discontinued operations | $ 64,070 | $ 70,750 |
Discontinued Operations - Cash
Discontinued Operations - Cash Flows Statement (Details) - Federal And Defense Segment - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and amortization | $ 1,437 | $ 1,917 |
Purchases of property and equipment | 92 | 144 |
Stock-based compensation | $ 73 | $ 20 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 205,223 | $ 169,761 | $ 393,810 | $ 330,081 | |
Unbilled receivables | 6,229 | 6,229 | $ 7,409 | ||
Contract liabilities | 2,561 | 2,561 | $ 963 | ||
Repair | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 35,561 | 25,966 | 67,615 | 48,329 | |
Distribution | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 169,662 | 143,795 | 326,195 | 281,752 | |
Commercial | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 161,857 | 129,356 | 306,461 | 249,124 | |
DoD | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 1,264 | 2,993 | |||
Other government | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 43,366 | 39,141 | 87,349 | 77,964 | |
Aviation | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 124,729 | 105,019 | 237,964 | 198,309 | |
Aviation | Repair | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 35,561 | 25,966 | 67,615 | 48,329 | |
Aviation | Distribution | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 89,168 | 79,053 | 170,349 | 149,980 | |
Aviation | Commercial | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 123,820 | 103,349 | 235,880 | 195,261 | |
Aviation | DoD | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 0 | 0 | |||
Aviation | Other government | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 909 | 1,670 | 2,084 | 3,048 | |
Fleet | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 80,494 | 64,742 | 155,846 | 131,772 | |
Fleet | Repair | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Fleet | Distribution | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 80,494 | 64,742 | 155,846 | 131,772 | |
Fleet | Commercial | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 38,037 | 26,007 | 70,581 | 53,863 | |
Fleet | DoD | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 1,264 | 2,993 | |||
Fleet | Other government | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 42,457 | $ 37,471 | $ 85,265 | $ 74,916 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Jun. 30, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities | $ 0.8 | $ 0.5 |
Debt - Long-term debt (Details)
Debt - Long-term debt (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 377,000 | $ 288,610 |
Less debt issuance costs | (1,890) | (2,310) |
Total long-term debt | 375,110 | 286,300 |
Less current portion | (10,000) | (10,000) |
Long-term debt, less current portion | 365,110 | 276,300 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | 95,000 | 100,000 |
Revolving Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 282,000 | $ 188,610 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jul. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||||
2023 | $ 5,000,000 | $ 5,000,000 | ||||
2024 | 10,000,000 | 10,000,000 | ||||
2025 | $ 362,000,000 | $ 362,000,000 | ||||
Loans Payable And Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate range | 7.51% | 7.51% | ||||
Interest expense, net | $ 7,900,000 | $ 3,700,000 | $ 14,300,000 | $ 7,100,000 | ||
Revolving Facility | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate range | 7.62% | 7.62% | ||||
Letters of credit outstanding | $ 700,000 | $ 700,000 | $ 1,000,000 | |||
2023 | 0 | 0 | ||||
2024 | 0 | 0 | ||||
2025 | 282,000,000 | 282,000,000 | ||||
Revolving Facility | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
2023 | $ 9,500,000 | |||||
2024 | 19,000,000 | |||||
2025 | $ 156,500,000 | |||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
2023 | 5,000,000 | 5,000,000 | ||||
2024 | 10,000,000 | 10,000,000 | ||||
2025 | $ 80,000,000 | $ 80,000,000 |
Debt - Loan Payments (Details)
Debt - Loan Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2023 | $ 5,000 | |
2024 | 10,000 | |
2025 | 362,000 | |
Long-term debt | 377,000 | $ 288,610 |
Long-term debt | 377,000 | 288,610 |
Term Loan | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2023 | 5,000 | |
2024 | 10,000 | |
2025 | 80,000 | |
Long-term debt | 95,000 | |
Long-term debt | 95,000 | |
Revolving Facility | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2023 | 0 | |
2024 | 0 | |
2025 | 282,000 | |
Long-term debt | 282,000 | 188,610 |
Long-term debt | $ 282,000 | $ 188,610 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Details) - Cash Flow Hedging $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Amount | $ 3,600 | $ 3,600 |
Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Amount | $ 150,000 | $ 150,000 |
Paid Fixed Rate | 2.80% | 2.80% |
Reclassification | $ 800 | $ 1,500 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding (in shares) | 12,886,100 | 12,778,355 | 12,865,394 | 12,760,026 |
Effect of dilutive shares (in shares) | 30,898 | 32,723 | 56,432 | 47,223 |
Diluted weighted average common shares outstanding (in shares) | 12,916,998 | 12,811,078 | 12,921,826 | 12,807,249 |
Business Segments - Segment Inf
Business Segments - Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 205,223 | $ 169,761 | $ 393,810 | $ 330,081 |
Operating income (loss) | 20,637 | 10,535 | 37,415 | 22,552 |
Corporate/unallocated expenses(a) | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | (3,000) | (1,281) | (7,785) | (3,267) |
Aviation | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 124,729 | 105,019 | 237,964 | 198,309 |
Aviation | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | 15,783 | 6,450 | 31,447 | 14,072 |
Fleet | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 80,494 | 64,742 | 155,846 | 131,772 |
Fleet | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | $ 7,854 | $ 5,366 | $ 13,753 | $ 11,747 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Roll Forward (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Balance as of beginning of period | $ 217,262 |
Balance as of end of period | 222,023 |
Aviation | |
Goodwill [Roll Forward] | |
Balance as of beginning of period | 154,072 |
Acquisitions | 4,761 |
Balance as of end of period | 158,833 |
Fleet | |
Goodwill [Roll Forward] | |
Balance as of beginning of period | 63,190 |
Acquisitions | 0 |
Balance as of end of period | 63,190 |
Federal And Defense Segment | |
Goodwill [Roll Forward] | |
Balance as of beginning of period | 217,262 |
Acquisitions | 4,761 |
Balance as of end of period | $ 222,023 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 211,610 | $ 207,810 |
Accumulated amortization | (128,792) | (121,252) |
Net carrying value | 82,818 | 86,558 |
Contract and customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 202,940 | 199,140 |
Accumulated amortization | (120,760) | (113,796) |
Net carrying value | 82,180 | 85,344 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 8,670 | 8,670 |
Accumulated amortization | (8,032) | (7,456) |
Net carrying value | $ 638 | $ 1,214 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Future Expected Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 5,114 | |
2024 | 9,136 | |
2025 | 9,074 | |
2026 | 8,950 | |
2027 | 7,204 | |
Thereafter | 43,340 | |
Net carrying value | $ 82,818 | $ 86,558 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - Other assets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-COLI assets held in Deferred Supplemental Compensation Plan(a) | $ 576 | $ 539 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | $ 7,103 | $ 6,620 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 24% | 28.60% | 24.30% | 26.70% |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jul. 27, 2023 USD ($) $ / shares shares | May 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jul. 26, 2023 USD ($) | |
Subsequent Event [Line Items] | |||||
Acquisition related expenses | $ 600,000 | $ 1,700,000 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Interest payments on derivatives | $ 100,000,000 | ||||
Public offering, issued (in shares) | shares | 2,475,000 | ||||
Public offering, price (in dollars per share) | $ / shares | $ 48.50 | ||||
Public offering, additional shares issued (in shares) | shares | 371,250 | ||||
Public offering proceeds | $ 112,700,000 | ||||
Subsequent Event | Line of Credit | Term Loan | |||||
Subsequent Event [Line Items] | |||||
Principal amount | 90,000,000 | ||||
Quarterly amortization payments | $ 2,250,000 | ||||
Total funded debt to EBITDA ratio | 5 | 4.50 | |||
Subsequent Event | Line of Credit | Revolving Facility | |||||
Subsequent Event [Line Items] | |||||
Principal amount | $ 25,000,000 | $ 100,000,000 | |||
Desser Aerospace | |||||
Subsequent Event [Line Items] | |||||
Preliminary purchase price | $ 124,000,000 | ||||
Loar | |||||
Subsequent Event [Line Items] | |||||
Purchase price | $ 30,000,000 |