Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 26, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
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 | 3361 Enterprise Way | |
Entity Address, City or Town | Miramar, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33025 | |
City Area Code | 954 | |
Local Phone Number | 430-6600 | |
Title of 12(b) Security | Common Stock, par value $0.05 per share | |
Trading Symbol | VSEC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 18,420,008 | |
Entity Central Index Key | 0000102752 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 18,993 | $ 7,768 |
Receivables (net of allowance of $5.0 million and $3.4 million, respectively) | 168,238 | 127,958 |
Contract assets | 28,575 | 8,049 |
Inventories | 532,371 | 500,864 |
Other current assets | 48,198 | 36,389 |
Current assets held-for-sale | 0 | 93,002 |
Total current assets | 796,375 | 774,030 |
Noncurrent assets: | ||
Property and equipment (net of accumulated depreciation of $42.6 million and $37.4 million, respectively) | 72,571 | 58,076 |
Intangible assets (net of accumulated amortization of $74.0 million and $135.6 million, respectively) | 165,389 | 114,130 |
Goodwill | 390,135 | 351,781 |
Operating lease right-of-use assets | 34,419 | 28,684 |
Other assets | 35,409 | 23,637 |
Total assets | 1,494,298 | 1,350,338 |
Current liabilities: | ||
Current portion of long-term debt | 30,000 | 22,500 |
Accounts payable | 144,645 | 173,036 |
Accrued expenses and other current liabilities | 49,159 | 36,383 |
Dividends payable | 1,842 | 1,576 |
Current liabilities held-for-sale | 0 | 53,391 |
Total current liabilities | 225,646 | 286,886 |
Noncurrent liabilities: | ||
Long-term debt, less current portion | 433,508 | 406,844 |
Deferred compensation | 7,561 | 7,939 |
Long-term operating lease obligations | 36,515 | 24,959 |
Deferred tax liabilities | 4,317 | 6,985 |
Other long-term liabilities | 5,435 | 0 |
Total liabilities | 712,982 | 733,613 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Common stock, par value $0.05 per share, authorized 23,000,000 shares; issued and outstanding 18,420,008 and 15,756,918, respectively | 921 | 788 |
Additional paid-in capital | 403,666 | 229,103 |
Retained earnings | 371,872 | 384,702 |
Accumulated other comprehensive income | 4,857 | 2,132 |
Total stockholders' equity | 781,316 | 616,725 |
Total liabilities and stockholders' equity | $ 1,494,298 | $ 1,350,338 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 5,000 | $ 3,400 |
Accumulated depreciation | 42,600 | 37,400 |
Accumulated amortization | $ 73,971 | $ 135,630 |
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) | 18,420,008 | 15,756,918 |
Common stock, outstanding (in shares) | 18,420,008 | 15,756,918 |
Consolidated Statements of (Los
Consolidated Statements of (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |||
Revenues: | ||||||
Total revenues | $ 265,959 | $ 205,223 | $ 507,498 | $ 393,810 | ||
Costs and operating expenses: | ||||||
Selling, general and administrative expenses | 4,117 | 1,519 | 7,116 | 3,564 | ||
Lease abandonment costs | 12,857 | 0 | 12,857 | [1] | 0 | [1] |
Amortization of intangible assets | 4,360 | 3,601 | 7,741 | 7,540 | ||
Total costs and operating expenses | 259,827 | 184,586 | 477,192 | 356,395 | ||
Operating income | 6,132 | 20,637 | 30,306 | 37,415 | ||
Interest expense, net | 9,826 | 7,366 | 19,013 | 13,346 | ||
(Loss) income from continuing operations before income taxes | (3,694) | 13,271 | 11,293 | 24,069 | ||
(Benefit) provision for income taxes | (917) | 3,182 | 1,970 | 5,860 | ||
Net (loss) income from continuing operations | (2,777) | 10,089 | 9,323 | 18,209 | ||
Loss from discontinued operations, net of tax | 0 | (1,234) | (18,711) | (237) | ||
Net (loss) income | $ (2,777) | $ 8,855 | $ (9,388) | [1] | $ 17,972 | [1] |
Basic | ||||||
Continuing operations (in dollars per share) | $ (0.16) | $ 0.78 | $ 0.57 | $ 1.42 | ||
Discontinued operations (in dollars per share) | 0 | (0.10) | (1.14) | (0.02) | ||
Basic earnings (loss) per share (in dollars per share) | (0.16) | 0.68 | (0.57) | 1.40 | ||
Diluted | ||||||
Continuing operations (in dollars per share) | (0.16) | 0.78 | 0.56 | 1.42 | ||
Discontinued operations (in dollars per share) | 0 | (0.10) | (1.13) | (0.02) | ||
Diluted earnings (loss) per share (in dollars per share) | $ (0.16) | $ 0.68 | $ (0.57) | $ 1.40 | ||
Weighted average shares outstanding: | ||||||
Basic (in shares) | 17,152,661 | 12,886,100 | 16,468,288 | 12,865,394 | ||
Diluted (in shares) | 17,202,115 | 12,916,998 | 16,571,033 | 12,921,826 | ||
Dividends declared per share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.20 | ||
Products | ||||||
Revenues: | ||||||
Total revenues | $ 188,579 | $ 165,997 | $ 375,758 | $ 320,443 | ||
Costs and operating expenses: | ||||||
Costs and operating expenses | 166,055 | 147,139 | 329,038 | 282,388 | ||
Services | ||||||
Revenues: | ||||||
Total revenues | 77,380 | 39,226 | 131,740 | 73,367 | ||
Costs and operating expenses: | ||||||
Costs and operating expenses | $ 72,438 | $ 32,327 | $ 120,440 | $ 62,903 | ||
[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. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |||
Statement of Comprehensive Income [Abstract] | ||||||
Net (loss) income | $ (2,777) | $ 8,855 | $ (9,388) | [1] | $ 17,972 | [1] |
Other comprehensive income, net of tax: | ||||||
Change in fair value of interest rate swap agreements, net of tax | 221 | 2,361 | 2,725 | 363 | ||
Total other comprehensive income, net of tax | 221 | 2,361 | 2,725 | 363 | ||
Comprehensive (loss) income | $ (2,556) | $ 11,216 | $ (6,663) | $ 18,335 | ||
[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. |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income | |
Balance, beginning balance (in shares) at Dec. 31, 2022 | 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 (loss) 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 | 363 | ||||
Dividends declared | (2,579) | (2,579) | ||||
Balance, ending balance (in shares) at Jun. 30, 2023 | 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 (loss) 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 | 2,361 | ||||
Dividends declared | (1,289) | (1,289) | ||||
Balance, ending balance (in shares) at Jun. 30, 2023 | 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 Dec. 31, 2023 | 15,756,918 | 15,757,000 | ||||
Balance, beginning balance at Dec. 31, 2023 | $ 616,725 | $ 788 | 229,103 | 384,702 | 2,132 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (9,388) | [1] | (9,388) | |||
Issuance of common stock (in shares) | 2,430,000 | |||||
Issuance of common stock | 161,693 | $ 122 | 161,571 | |||
TCI Acquisition (in shares) | 127,000 | |||||
Stock issuance in connection with acquisition | 10,000 | $ 6 | 9,994 | |||
Stock-based compensation (in shares) | 106,000 | |||||
Stock-based compensation | 3,003 | $ 5 | 2,998 | |||
Other comprehensive income (loss), net of tax | 2,725 | 2,725 | ||||
Dividends declared | $ (3,442) | (3,442) | ||||
Balance, ending balance (in shares) at Jun. 30, 2024 | 18,420,008 | 18,420,000 | ||||
Balance, ending balance at Jun. 30, 2024 | $ 781,316 | $ 921 | 403,666 | 371,872 | 4,857 | |
Balance, beginning balance (in shares) at Mar. 31, 2024 | 15,834,000 | |||||
Balance, beginning balance at Mar. 31, 2024 | 612,738 | $ 792 | 230,805 | 376,505 | 4,636 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | (2,777) | (2,777) | ||||
Issuance of common stock (in shares) | 2,430,000 | |||||
Issuance of common stock | 161,693 | $ 122 | 161,571 | |||
TCI Acquisition (in shares) | 127,000 | |||||
Stock issuance in connection with acquisition | 10,000 | $ 6 | 9,994 | |||
Stock-based compensation (in shares) | 29,000 | |||||
Stock-based compensation | 1,297 | $ 1 | 1,296 | |||
Other comprehensive income (loss), net of tax | 221 | 221 | ||||
Dividends declared | $ (1,856) | (1,856) | ||||
Balance, ending balance (in shares) at Jun. 30, 2024 | 18,420,008 | 18,420,000 | ||||
Balance, ending balance at Jun. 30, 2024 | $ 781,316 | $ 921 | $ 403,666 | $ 371,872 | $ 4,857 | |
[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. |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per share (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.20 | $ 0.20 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | ||
Cash flows from operating activities: | |||
Net (loss) income | [1] | $ (9,388) | $ 17,972 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | |||
Depreciation and amortization | [1] | 12,868 | 12,011 |
Amortization of debt issuance cost | [1] | 665 | 420 |
Deferred taxes | [1] | (6,925) | (1,533) |
Stock-based compensation | [1] | 4,812 | 3,894 |
Provision for inventory | [1] | 0 | 742 |
Impairment and loss on sale of business segment | [1] | 16,867 | 0 |
Loss on sale of property and equipment | [1] | 421 | 0 |
Lease abandonment charge | [1] | 12,857 | 0 |
Changes in operating assets and liabilities, net of impact of acquisitions: | |||
Receivables | [1] | (38,292) | (21,082) |
Contract assets | [1] | 6,240 | (110) |
Inventories | [1] | (25,408) | (45,580) |
Other current assets and other assets | [1] | (14,584) | (1,274) |
Operating lease assets and liabilities, net | [1] | (362) | (67) |
Accounts payable and deferred compensation | [1] | (47,047) | (27,429) |
Accrued expenses and other liabilities | [1] | (9,312) | (3,055) |
Net cash used in operating activities | [1] | (96,588) | (65,091) |
Cash flows from investing activities: | |||
Purchases of property and equipment | [1] | (11,674) | (6,137) |
Proceeds from the sale of business segment | [1] | 42,118 | 0 |
Proceeds from the payment on notes receivable | [1] | 0 | 1,557 |
Cash paid for acquisitions, net of cash acquired | [1] | (112,264) | (11,711) |
Net cash used in investing activities | [1] | (81,820) | (16,291) |
Cash flows from financing activities: | |||
Borrowings on bank credit facilities | [1] | 419,881 | 322,813 |
Repayments on bank credit facilities | [1] | (386,381) | (234,423) |
Proceeds from issuance of common stock | [1] | 161,692 | 456 |
Payment of taxes for equity transactions | [1] | (2,545) | (1,031) |
Dividends paid | [1] | (3,176) | (2,571) |
Net cash provided by financing activities | [1] | 189,471 | 85,244 |
Net increase in cash and cash equivalents | [1] | 11,063 | 3,862 |
Cash and cash equivalents, beginning of period | [1] | 7,930 | 478 |
Cash and cash equivalents, end of period | [1] | $ 18,993 | $ 4,340 |
[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, 2024 | |
Accounting Policies [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Nature of Operations VSE Corporation (collectively, with its consolidated subsidiaries), "VSE," the "Company," "us," "we," or "our" is a leading provider of aftermarket parts distribution and maintenance, repair and overhaul ("MRO") services for air and land transportation assets for commercial and government markets. We operate in two reportable segments aligned with our operating segments: Aviation and Fleet. 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 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, 2023 ("2023 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, 2024, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024. In February 2024, we entered into two separate agreements to sell substantially all of the Federal and Defense segment assets. See Note (3) "Discontinued Operations" for further information. The consolidated financial statements reflect the Federal and Defense segment's results of operations as discontinued operations for all periods presented, and the related assets and liabilities as held-for-sale as of December 31, 2023. 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, valuation allowances on deferred tax assets, fair value of goodwill and other intangible assets and contingencies. Underwritten Public Offering In May 2024, we entered into an underwriting agreement with certain underwriters, relating to the issuance and sale of up to 2,429,577 shares of the Company's common stock at a public offering price of $71.00 per share. On May 17, 2024, the Company issued 2,429,577 shares pursuant to the agreement, which included the exercise by the underwriters of their option to purchase additional shares. We received proceeds of approximately $162.0 million in connection with the offerings, net of issuance costs. We used substantially all of the proceeds of the public offering to repay outstanding borrowings under our revolving credit facility, including amounts borrowed to pay the purchase price of the acquisition of Turbine Controls, LLC ("TCI"), and for general corporate purposes. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Acquisitions | Acquisitions Turbine Controls, LLC On April 24, 2024, we completed the acquisition of TCI for a total consideration of $122.2 million, consisting of cash consideration of $113.7 million, which included $1.57 million as an estimated net working capital adjustment, and in-kind payment in the form of shares of the Company's common stock with a value equal to $10.0 million. The purchase price of this acquisition was funded by borrowings under our revolving credit facility. TCI is a leading provider of aftermarket maintenance, repair and overhaul ("MRO") support services for complex engine components, as well as engine and airframe accessories, across commercial and military applications. The acquisition presents an opportunity for VSE's Aviation segment to accelerate its MRO strategy, including expanding our repair capability offerings and adding several new OEM relationships. The purchase price for TCI was allocated on a preliminary basis, among assets acquired and liabilities assumed at fair value based on the best available information on the acquisition date, with the excess purchase price recorded as goodwill. The fair values of the non-financial assets acquired, and liabilities assumed, were determined based on preliminary estimates, assumptions, and other information compiled by management, including independent valuations utilizing established industry valuation techniques. We have not yet finalized the determination of the fair values allocated to various assets and liabilities, including, but not limited to, working capital and income taxes. Therefore, the allocation of the total consideration for the acquisition to the tangible and identifiable intangible assets acquired, and liabilities assumed, is preliminary until we obtain final information regarding their fair values, which could potentially result in changes to the TCI opening balance sheet. The preliminary purchase price allocation is as follows (in thousands): Receivables $ 9,122 Contract assets 16,193 Inventories 5,512 Other current assets 570 Other assets 214 Property and equipment, net 6,434 Intangible asset - customer related 59,000 Goodwill 40,093 Operating lease right-of-use assets 7,832 Total assets acquired 144,970 Accounts payable (9,764) Accrued expense and other current liabilities (5,619) Long-term operating lease obligations (7,339) Total liabilities assumed (22,723) Net assets acquired, excluding cash $ 122,248 Cash consideration, net of cash acquired $ 112,248 VSE Common stock, at fair value 10,000 Total $ 122,248 Goodwill resulting from the acquisition of TCI reflects the strategic advantage of expanding our MRO services to new customers. The value attributed to goodwill and customer relationships is deductible for income tax purposes. The estimated value attributed to the customer relationship intangible assets is being amortized on a straight-line basis using a useful life of 10 years. We incurred $0.5 million and $2.0 million of acquisition-related expenses related to the TCI acquisition during the three and six months ended June 30, 2024, respectively, which are included in selling, general and administrative expenses. The operating results of TCI were included in our consolidated results of operations from the date of acquisition. Our consolidated revenues and operating income include $23.5 million and $1.8 million, respectively, for the three and six months ended June 30, 2024, from the acquisition of TCI. Operating income does not include the impact of acquisition-related expenses incurred by VSE Corporation. The following unaudited pro forma financial information presents the combined results of operations for TCI and VSE Corporation for the three and six months ended June 30, 2024, and 2023, respectively. The unaudited consolidated pro forma results of operations are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Revenue 273,070 225,469 539,280 433,012 (Loss) income from continuing operations (2,791) 8,597 10,045 15,117 The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of TCI as though it had occurred on January 1, 2023 and includes adjustments for intangible asset amortization; interest expense and debt issuance costs on long-term debt; and acquisition and other transaction costs. The unaudited pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had occurred on January 1, 2023, nor is it indicative of future operating results. 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 operating results are included in our Aviation segment beginning on the acquisition date. The acquisition was not material to our consolidated financial statements. During the six months ended June 30, 2023, we incurred $0.2 million of acquisition-related expenses related to the acquisition of Precision Fuel, which are included in selling, general and administrative expenses. Desser Aerospace On July 3, 2023, we completed the acquisition of Desser Holding Company LLC ("Desser Aerospace"), a global aftermarket solutions provider of specialty distribution and MRO services. We purchased Desser Aerospace for a cash consideration of $133.7 million , which included $9.5 million as an estimated net working capital adjustment (subject to post-closing adjustments). Concurrent with the closing of the transaction, we immediately sold, in a separate transaction, Desser Aerospace’s propriety solutions businesses to Loar Group Inc. (“Loar”) for a cash consideration of $31.8 million , which included $1.8 million as an estimated net working capital adjustment (the “Loar Sale”). During the six months ended June 30, 2024, we adjusted the purchase price allocation as a result of certain measurement period adjustments to acquired assets and liabilities assumed due to updated valuation reports received from our external valuation specialist, revisions to internal estimates, and new information obtained about facts and circumstances that existed as of the acquisition date. The measurement period adjustments included: a decrease in deferred tax liabilities of $1.6 million and an increase in inventories of $0.1 million These adjustments resulted in a decrease to goodwill of $1.7 million . We completed the purchase accounting valuation for Desser Aerospace during the second quarter of 2024. The final purchase price allocation is as follows (in thousands): Receivables $ 7,383 Inventories 31,228 Other current assets 515 Property and equipment 2,527 Intangible assets 21,950 Goodwill 53,942 Operating lease right-of-use assets 6,679 Total assets acquired 124,224 Accounts payable (10,128) Accrued expenses and other current liabilities (5,793) Long-term operating lease obligations (5,937) Deferred tax liabilities (2,666) Total liabilities assumed (24,524) Net assets acquired, excluding cash $ 99,700 Cash consideration $ 101,870 Post-close adjustment (2,170) Total $ 99,700 Goodwill resulting from the acquisition of Desser Aerospace reflects the strategic advantage of expanding our specialty distribution and MRO services to new customers. The value attributed to goodwill and customer relationships is not fully deductible for income tax purposes. The estimated value attributed to the customer relationship intangible assets is being amortized on a straight-line basis using a weighted average useful life of 8.3 years. We incurred $0.6 million and $1.7 million of acquisition-related expenses related to the Desser Aerospace acquisition during the three and six ended June 30, 2023 , respectively, which are included in selling, general and administrative expenses. The following unaudited pro forma financial information presents the combined results of operations for Desser Aerospace and VSE Corporation for the three and six months ended June 30, 2024 and 2023, respectively. The unaudited consolidated pro forma results of operations are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Revenue $ 265,959 229,066 $ 507,498 441,565 (Loss) Income from continuing operations $ (2,777) 11,001 $ 9,323 20,353 The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of Desser Aerospace as though it had occurred on January 1, 2023 and includes adjustments for intangible asset amortization; interest expense and debt issuance costs on long-term debt; acquisition and other transaction costs; and certain costs allocated from the former parent. The unaudited pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had occurred on January 1, 2023, nor is it indicative of future operating results. Honeywell Fuel Control Systems On September 27, 2023, our Aviation segment entered into an Asset Purchase and License Agreement with Honeywell International Inc., for a purchase price of $105.0 million, to exclusively manufacture, sell, market, distribute, and repair certain Honeywell fuel control systems (the "Honeywell FCS Acquisition"). The purchase price of this acquisition was funded by borrowings under our revolving credit facility. This agreement expands existing distribution and MRO capabilities supporting certain Honeywell’s fuel control systems and associated subcomponents. The acquisition was accounted for as a business combination under ASC 805, Business Combinations. The purchase price for the acquisition was allocated on a preliminary basis, among assets acquired, at fair value based on the best available information on the acquisition date, with the excess purchase price recorded as goodwill. The fair values of the non-financial assets acquired were determined based on preliminary estimates, assumptions, and other information compiled by management, including independent valuations utilizing established industry valuation techniques. We have not yet finalized the purchase price allocation related to this acquisition due to the fact that while legal control has occurred, we have not received physical possession of the prepaid inventory and property and equipment, and thus these assets will be subject to settlement adjustments upon transfer as outlined in the Asset Purchase and License Agreement with Honeywell. Therefore, the allocation of the total consideration for the acquisition is preliminary until we obtain final information regarding their fair values, which could potentially result in changes in the fair values and an adjustment to goodwill. There were no changes in the preliminary purchase price allocation for the three and six months ended June 30, 2024. The adjusted preliminary purchase price allocation is as follows (in thousands): Other current assets (a) $ 12,000 Property and equipment 2,714 Intangible assets 16,200 Goodwill 74,086 Total assets acquired $ 105,000 Cash consideration $ 105,000 Total consideration $ 105,000 (a) Represents prepaid inventory consisting of finished goods acquired but not in our physical possession as of the acquisition date. The pro-forma impact of the acquisition is not material to the Company’s results of operations. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations In February 2024, we entered into two separate agreements to sell substantially all the Federal and Defense segment's operational assets ("FDS Sale") for a cash consideration of $44.0 million, including amounts in escrow, subject to post-closing adjustments. The FDS Sale is consistent with our long-term strategic growth strategy focused on higher margin and higher growth aftermarket parts distribution and MRO businesses. We recorded a pre-tax loss on the FDS sale of $12.7 million and transaction fees of $2.5 million during the first quarter of 2024, which are included in loss from discontinued operations, net of tax in the consolidated statements of (loss) income. The components of loss from discontinued operations, net of tax for the three and six months ended June 30, 2024 and 2023, consist of the following (in thousands): For the three months ended June 30, For the six months ended June 30, 2024 2023 2024 2023 Revenues $ — $ 67,039 $ 26,268 $ 133,885 Costs and operating expenses — 68,818 34,629 134,506 Loss from discontinued operations — (1,779) (8,361) (621) Other FDS impairment — — 4,204 — Loss on the sale of discontinued operations — — 12,663 — Total loss before income taxes — (1,779) (25,228) (621) Provision for income taxes — (545) (6,517) (384) Loss from discontinued operations, net of tax $ — $ (1,234) $ (18,711) $ (237) The assets and liabilities reported as held-for-sale consist of the following (in thousands): December 31, 2023 Assets Cash and cash equivalents $ 162 Receivables, net 10,805 Contract assets 25,109 Inventories 472 Other current assets 6,154 Property and equipment, net 6,102 Intangible assets, net 3,505 Goodwill 31,575 Operating lease right-of-use assets 9,097 Other assets 21 Total assets held-for-sale $ 93,002 Liabilities Accounts payable $ 20,893 Accrued expenses and other current liabilities 19,537 Long-term operating lease obligations 8,942 Deferred tax liabilities 4,019 Total liabilities held-for-sale $ 53,391 Certain assets and liabilities previously reported as held-for-sale were excluded from the FDS sale and were reclassified as held and used, at their respective fair values, on the consolidated balance sheets during the first quarter of 2024. The reclassification related to our Alexandria, VA headquarters office space and consisted of an operating lease right-of-use-asset of $7.1 million, property and equipment of $2.6 million, and an operating lease obligation of $11.0 million. During the second quarter of 2024, we vacated the headquarters office space and, as a result, wrote down the associated lease right-of-use asset and property and equipment. See Note (13) "Lease Abandonment and Other Restructuring Costs" for further information. The FDS sale resulted in the divestiture of certain government contracts requiring novation. Until the novation process is finalized, we continue to receive cash collections related to these contracts, which are due to the purchaser. As of June 30, 2024, we have recorded a $7.0 million liability for these collections within accrued expenses and other current liabilities on our consolidated balance sheets. Selected financial information related to cash flows from discontinued operations is as follows (in thousands): For the six months ended June 30, 2024 2023 Depreciation and amortization $ 150 $ 1,437 Purchases of property and equipment $ — $ 92 Stock-based compensation $ — $ 73 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2024 | |
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 government customers. A summary of revenues by customer for each of our operating segments for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands): Three months ended June 30, 2024 Six months ended June 30, 2024 Aviation Fleet Total Aviation Fleet Total Commercial $ 191,296 $ 46,484 $ 237,780 $ 349,280 $ 91,083 $ 440,363 Other government 1,532 26,647 28,179 5,931 61,204 67,135 Total $ 192,828 $ 73,131 $ 265,959 $ 355,211 $ 152,287 $ 507,498 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 A summary of revenues by type for each of our operating segments for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands): Three months ended June 30, 2024 Six months ended June 30, 2024 Aviation Fleet Total Aviation Fleet Total Repair $ 75,370 $ — $ 75,370 $ 126,044 $ — $ 126,044 Distribution 117,458 73,131 190,589 229,167 152,287 381,454 Total $ 192,828 $ 73,131 $ 265,959 $ 355,211 $ 152,287 $ 507,498 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 Contract Balances Contract balances were as follows (in thousands): June 30, December 31, Financial Statement Classification 2024 2023 Billed and billable receivables Receivables, net $ 168,238 $ 127,958 Contract assets - unbilled receivables Contract assets $ 28,575 $ 8,049 Contract liabilities Accrued expenses and other current liabilities $ 3,138 $ 2,785 For the six months ended June 30, 2024 and 2023, we recognized revenue that was previously included in the beginning balance of contract liabilities of $1.7 million and $0.8 million, respectively. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following (in thousands): June 30, December 31, 2024 2023 Bank credit facility - term loan $ 292,500 $ 300,000 Bank credit facility - revolving facility 174,000 133,000 Principal amount of long-term debt 466,500 433,000 Less: debt issuance costs (2,992) (3,656) Total long-term debt 463,508 429,344 Less: current portion (30,000) (22,500) Long-term debt, less current portion $ 433,508 $ 406,844 Borrowings under our term loan and revolving facility mature in October 2026. As of June 30, 2024, the interest rate on our outstanding term loan borrowings and weighted average interest rate on our aggregate outstanding revolving facility was 8.18% and 8.20%, respectively. We had letters of credit outstanding of $0.8 million as of June 30, 2024 and December 31, 2023. Future required term loan and revolving facility payments as of June 30, 2024 are as follows (in thousands): Year Ending Term Loan Revolving Facility Total Remainder of 2024 $ 15,000 $ — $ 15,000 2025 30,000 — 30,000 2026 247,500 174,000 421,500 Total $ 292,500 $ 174,000 $ 466,500 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2024 | |
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, 2024 were as follows (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 Interest rate swaps $100,000 4.5% 1-month term SOFR Monthly through July 31, 2026 We are party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of our floating rate debt. For the three and six months ended June 30, 2024, we reclassified $1.2 million and $2.3 million, respectively, from accumulated other comprehensive income to interest expense, net. We estimate that we will reclassify $3.5 million of unrealized gains from accumulated other comprehensive income into earnings in the twelve months following June 30, 2024. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2024 | |
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. The antidilutive common stock equivalents excluded from the diluted per share calculation are not material. 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, 2024 2023 2024 2023 Basic weighted average common shares outstanding 17,152,661 12,886,100 16,468,288 12,865,394 Effect of dilutive shares 49,454 30,898 102,745 56,432 Diluted weighted average common shares outstanding 17,202,115 12,916,998 16,571,033 12,921,826 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
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 condition, 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, 2024 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The sale of our Federal and Defense segment allows us to focus on a long-term strategic growth strategy focused on higher margin and higher growth aftermarket parts distribution and MRO businesses. Following the sale of our Federal and Defense segment, management of our business operations is conducted under two reportable operating segments: Aviation Our Aviation segment provides aftermarket MRO and distribution services to commercial, business and general aviation, cargo, military and defense, and rotorcraft customers globally. Core services include parts distribution, MRO services including engine components and accessories, fuel controls, avionics, pneumatics, hydraulics, wheel and brake, and 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, 2024 2023 2024 2023 Revenues: Aviation $ 192,828 $ 124,729 $ 355,211 $ 237,964 Fleet 73,131 80,494 152,287 155,846 Total revenues $ 265,959 $ 205,223 $ 507,498 $ 393,810 Operating income: Aviation $ 24,468 $ 15,783 $ 46,778 $ 31,447 Fleet 2,211 7,854 8,828 13,753 Corporate/unallocated expenses (a) (20,547) (3,000) (25,300) (7,785) Operating income $ 6,132 $ 20,637 $ 30,306 $ 37,415 (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, 2024 | |
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, 2024 were as follows (in thousands): Aviation Fleet Total Balance as of December 31, 2023 $ 288,591 $ 63,190 $ 351,781 Acquisitions 40,093 — 40,093 Measurement period adjustment (1,739) — (1,739) Balance as of June 30, 2024 $ 326,945 $ 63,190 $ 390,135 Goodwill increased during the six months ended June 30, 2024 in connection with the acquisition of TCI during the period, offset by a decrease in connection with a measurement period adjustment for the Desser Aerospace acquisition. See Note (2) "Acquisitions" for further information on these acquisitions. Intangible Assets Intangible assets consisted of the following (in thousands): Cost Accumulated Amortization Net Intangible Assets June 30, 2024 Contract and customer-related $ 230,690 $ (65,301) $ 165,389 Trade names 8,670 (8,670) — Total $ 239,360 $ (73,971) $ 165,389 December 31, 2023 Contract and customer-related $ 241,090 $ (127,022) $ 114,068 Trade names 8,670 (8,608) 62 Total $ 249,760 $ (135,630) $ 114,130 The gross carrying amount of contract and customer-related intangibles decreased during the six months ended June 30, 2024 due to intangible assets with a cost of $69.4 million being fully amortized and no longer reflected in the intangible asset values as of June 30, 2024, partially offset by an increase in connection with the acquisition during the period as discussed in Note (2) "Acquisitions." As of June 30, 2024, the estimated future annual amortization expense related to intangible assets is as follows (in thousands): Year Ending Amount Remainder of 2024 $ 9,618 2025 19,235 2026 19,111 2027 17,365 2028 16,531 Thereafter 83,529 Total $ 165,389 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2024 | |
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 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, 2024 Fair Value December 31, 2023 Non-COLI assets held in Deferred Supplemental Compensation Plan (a) Other assets Level 1 $ 615 $ 594 Interest rate swaps Other assets Level 2 $ 6,471 $ 2,840 (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, 2024 | |
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. |
Lease Abandonment and Other Res
Lease Abandonment and Other Restructuring Costs | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Lease Abandonment and Other Restructuring Costs | Lease Abandonment and Other Restructuring Costs In connection with the FDS sale as described in Note (3) "Discontinued Operations", we implemented changes during the second quarter of 2024 that resulted in one-time charges primarily related to the lease abandonment of our headquarters office space and certain other corporate restructuring actions. On June 28, 2024, we ceased use of our 95,000 sq. ft. leased office space in Alexandria, VA. We relocated our VA based corporate staff to a 4,000 sq. ft. office space in Vienna, VA under a new short-term lease. During the three and six months ended June 30, 2024, we recognized one-time lease abandonment costs of $12.9 million, which comprised of a reduction in our operating lease right-of-use assets of $6.7 million, exit costs of $3.7 million, and a non-cash write-off of certain property and equipment of $2.5 million. These one-time costs are included within lease abandonment costs on our consolidated statements of (loss) income. As of June 30, 2024, we had a lease abandonment liability of $13.9 million, which will be reduced as lease payments are made through the end of the April 2027 lease term. During the three and six months ended June 30, 2024, we incurred $3.8 million of corporate restructuring expenses, which are included in selling, general and administrative expenses, primarily related to the cancellation of contracts and leasing agreements associated with the FDS Sale. As of June 30, 2024, approximately $1.1 million of these costs are included within accrued expenses and other current liabilities on our consolidated balance sheets. Our corporate restructuring activities related to the FDS Sale are substantially complete, and we do not expect to incur additional material costs associated with these activities. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |||
Pay vs Performance Disclosure | ||||||
Net (loss) income | $ (2,777) | $ 8,855 | $ (9,388) | [1] | $ 17,972 | [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, 2024 | |
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, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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 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, 2023 ("2023 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, 2024, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024. In February 2024, we entered into two separate agreements to sell substantially all of the Federal and Defense segment assets. See Note (3) "Discontinued Operations" for further information. The consolidated financial statements reflect the Federal and Defense segment's results of operations as discontinued operations for all periods presented, and the related assets and liabilities as held-for-sale as of December 31, 2023. 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 | 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, 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 MRO and distribution services to commercial, business and general aviation, cargo, military and defense, and rotorcraft customers globally. Core services include parts distribution, MRO services including engine components and accessories, fuel controls, avionics, pneumatics, hydraulics, wheel and brake, and 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. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary purchase price allocation is as follows (in thousands): Receivables $ 9,122 Contract assets 16,193 Inventories 5,512 Other current assets 570 Other assets 214 Property and equipment, net 6,434 Intangible asset - customer related 59,000 Goodwill 40,093 Operating lease right-of-use assets 7,832 Total assets acquired 144,970 Accounts payable (9,764) Accrued expense and other current liabilities (5,619) Long-term operating lease obligations (7,339) Total liabilities assumed (22,723) Net assets acquired, excluding cash $ 122,248 Cash consideration, net of cash acquired $ 112,248 VSE Common stock, at fair value 10,000 Total $ 122,248 Receivables $ 7,383 Inventories 31,228 Other current assets 515 Property and equipment 2,527 Intangible assets 21,950 Goodwill 53,942 Operating lease right-of-use assets 6,679 Total assets acquired 124,224 Accounts payable (10,128) Accrued expenses and other current liabilities (5,793) Long-term operating lease obligations (5,937) Deferred tax liabilities (2,666) Total liabilities assumed (24,524) Net assets acquired, excluding cash $ 99,700 Cash consideration $ 101,870 Post-close adjustment (2,170) Total $ 99,700 The adjusted preliminary purchase price allocation is as follows (in thousands): Other current assets (a) $ 12,000 Property and equipment 2,714 Intangible assets 16,200 Goodwill 74,086 Total assets acquired $ 105,000 Cash consideration $ 105,000 Total consideration $ 105,000 (a) Represents prepaid inventory consisting of finished goods acquired but not in our physical possession as of the acquisition date. |
Business Acquisition, Pro Forma Information | The unaudited consolidated pro forma results of operations are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Revenue 273,070 225,469 539,280 433,012 (Loss) income from continuing operations (2,791) 8,597 10,045 15,117 Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Revenue $ 265,959 229,066 $ 507,498 441,565 (Loss) Income from continuing operations $ (2,777) 11,001 $ 9,323 20,353 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | The components of loss from discontinued operations, net of tax for the three and six months ended June 30, 2024 and 2023, consist of the following (in thousands): For the three months ended June 30, For the six months ended June 30, 2024 2023 2024 2023 Revenues $ — $ 67,039 $ 26,268 $ 133,885 Costs and operating expenses — 68,818 34,629 134,506 Loss from discontinued operations — (1,779) (8,361) (621) Other FDS impairment — — 4,204 — Loss on the sale of discontinued operations — — 12,663 — Total loss before income taxes — (1,779) (25,228) (621) Provision for income taxes — (545) (6,517) (384) Loss from discontinued operations, net of tax $ — $ (1,234) $ (18,711) $ (237) The assets and liabilities reported as held-for-sale consist of the following (in thousands): December 31, 2023 Assets Cash and cash equivalents $ 162 Receivables, net 10,805 Contract assets 25,109 Inventories 472 Other current assets 6,154 Property and equipment, net 6,102 Intangible assets, net 3,505 Goodwill 31,575 Operating lease right-of-use assets 9,097 Other assets 21 Total assets held-for-sale $ 93,002 Liabilities Accounts payable $ 20,893 Accrued expenses and other current liabilities 19,537 Long-term operating lease obligations 8,942 Deferred tax liabilities 4,019 Total liabilities held-for-sale $ 53,391 Certain assets and liabilities previously reported as held-for-sale were excluded from the FDS sale and were reclassified as held and used, at their respective fair values, on the consolidated balance sheets during the first quarter of 2024. The reclassification related to our Alexandria, VA headquarters office space and consisted of an operating lease right-of-use-asset of $7.1 million, property and equipment of $2.6 million, and an operating lease obligation of $11.0 million. During the second quarter of 2024, we vacated the headquarters office space and, as a result, wrote down the associated lease right-of-use asset and property and equipment. See Note (13) "Lease Abandonment and Other Restructuring Costs" for further information. The FDS sale resulted in the divestiture of certain government contracts requiring novation. Until the novation process is finalized, we continue to receive cash collections related to these contracts, which are due to the purchaser. As of June 30, 2024, we have recorded a $7.0 million liability for these collections within accrued expenses and other current liabilities on our consolidated balance sheets. Selected financial information related to cash flows from discontinued operations is as follows (in thousands): For the six months ended June 30, 2024 2023 Depreciation and amortization $ 150 $ 1,437 Purchases of property and equipment $ — $ 92 Stock-based compensation $ — $ 73 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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, 2024 and 2023 is as follows (in thousands): Three months ended June 30, 2024 Six months ended June 30, 2024 Aviation Fleet Total Aviation Fleet Total Commercial $ 191,296 $ 46,484 $ 237,780 $ 349,280 $ 91,083 $ 440,363 Other government 1,532 26,647 28,179 5,931 61,204 67,135 Total $ 192,828 $ 73,131 $ 265,959 $ 355,211 $ 152,287 $ 507,498 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 A summary of revenues by type for each of our operating segments for the three and six months ended June 30, 2024 and 2023 is as follows (in thousands): Three months ended June 30, 2024 Six months ended June 30, 2024 Aviation Fleet Total Aviation Fleet Total Repair $ 75,370 $ — $ 75,370 $ 126,044 $ — $ 126,044 Distribution 117,458 73,131 190,589 229,167 152,287 381,454 Total $ 192,828 $ 73,131 $ 265,959 $ 355,211 $ 152,287 $ 507,498 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 Contract balances were as follows (in thousands): June 30, December 31, Financial Statement Classification 2024 2023 Billed and billable receivables Receivables, net $ 168,238 $ 127,958 Contract assets - unbilled receivables Contract assets $ 28,575 $ 8,049 Contract liabilities Accrued expenses and other current liabilities $ 3,138 $ 2,785 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following (in thousands): June 30, December 31, 2024 2023 Bank credit facility - term loan $ 292,500 $ 300,000 Bank credit facility - revolving facility 174,000 133,000 Principal amount of long-term debt 466,500 433,000 Less: debt issuance costs (2,992) (3,656) Total long-term debt 463,508 429,344 Less: current portion (30,000) (22,500) Long-term debt, less current portion $ 433,508 $ 406,844 |
Schedule of Term Loan Payments | Future required term loan and revolving facility payments as of June 30, 2024 are as follows (in thousands): Year Ending Term Loan Revolving Facility Total Remainder of 2024 $ 15,000 $ — $ 15,000 2025 30,000 — 30,000 2026 247,500 174,000 421,500 Total $ 292,500 $ 174,000 $ 466,500 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | Our derivative instruments designated as cash flow hedges as of June 30, 2024 were as follows (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 Interest rate swaps $100,000 4.5% 1-month term SOFR Monthly through July 31, 2026 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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, 2024 2023 2024 2023 Basic weighted average common shares outstanding 17,152,661 12,886,100 16,468,288 12,865,394 Effect of dilutive shares 49,454 30,898 102,745 56,432 Diluted weighted average common shares outstanding 17,202,115 12,916,998 16,571,033 12,921,826 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Segment Information | Our segment information is as follows (in thousands): Three months ended June 30, Six months ended June 30, 2024 2023 2024 2023 Revenues: Aviation $ 192,828 $ 124,729 $ 355,211 $ 237,964 Fleet 73,131 80,494 152,287 155,846 Total revenues $ 265,959 $ 205,223 $ 507,498 $ 393,810 Operating income: Aviation $ 24,468 $ 15,783 $ 46,778 $ 31,447 Fleet 2,211 7,854 8,828 13,753 Corporate/unallocated expenses (a) (20,547) (3,000) (25,300) (7,785) Operating income $ 6,132 $ 20,637 $ 30,306 $ 37,415 (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, 2024 | |
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, 2024 were as follows (in thousands): Aviation Fleet Total Balance as of December 31, 2023 $ 288,591 $ 63,190 $ 351,781 Acquisitions 40,093 — 40,093 Measurement period adjustment (1,739) — (1,739) Balance as of June 30, 2024 $ 326,945 $ 63,190 $ 390,135 |
Schedule of Intangible Assets | Intangible assets consisted of the following (in thousands): Cost Accumulated Amortization Net Intangible Assets June 30, 2024 Contract and customer-related $ 230,690 $ (65,301) $ 165,389 Trade names 8,670 (8,670) — Total $ 239,360 $ (73,971) $ 165,389 December 31, 2023 Contract and customer-related $ 241,090 $ (127,022) $ 114,068 Trade names 8,670 (8,608) 62 Total $ 249,760 $ (135,630) $ 114,130 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of June 30, 2024, the estimated future annual amortization expense related to intangible assets is as follows (in thousands): Year Ending Amount Remainder of 2024 $ 9,618 2025 19,235 2026 19,111 2027 17,365 2028 16,531 Thereafter 83,529 Total $ 165,389 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 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, 2024 Fair Value December 31, 2023 Non-COLI assets held in Deferred Supplemental Compensation Plan (a) Other assets Level 1 $ 615 $ 594 Interest rate swaps Other assets Level 2 $ 6,471 $ 2,840 (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) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | ||
May 17, 2024 shares | May 31, 2024 USD ($) $ / shares shares | Feb. 29, 2024 agreement | Jun. 30, 2024 segment | |
Product Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Public offering, issued (in shares) | shares | 2,429,577 | 2,429,577 | ||
Public offering, price (in dollars per share) | $ / shares | $ 71 | |||
Public offering proceeds | $ | $ 162 | |||
Discontinued Operations, Held-for-Sale | Federal And Defense Segment | ||||
Product Information [Line Items] | ||||
Number of agreements | agreement | 2 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Apr. 24, 2024 | Sep. 27, 2023 | Jul. 03, 2023 | Feb. 01, 2023 | Jun. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | |
Business Acquisition [Line Items] | |||||||
Decrease in goodwill | $ 1,739 | ||||||
Turbine Controls, Inc. ("TCI") | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 122,200 | ||||||
Purchase price | 113,700 | ||||||
Working capital adjustment | 1,570 | ||||||
Acquisition related expenses | $ 500 | 2,000 | |||||
Revenues | 23,500 | 23,500 | |||||
Operating income | 1,800 | $ 1,800 | |||||
Measurement period adjustments, increase in purchase price | 10,000 | ||||||
Turbine Controls, Inc. ("TCI") | Common Stock | |||||||
Business Acquisition [Line Items] | |||||||
Share consideration, VSE common stock | $ 10,000 | ||||||
Turbine Controls, Inc. ("TCI") | Customer Relationships | |||||||
Business Acquisition [Line Items] | |||||||
Useful life (in years) | 10 years | ||||||
Precision Fuel | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 11,700 | ||||||
Acquisition related expenses | $ 200 | ||||||
Desser Aerospace | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 99,700 | ||||||
Purchase price | 133,700 | ||||||
Working capital adjustment | 9,500 | ||||||
Acquisition related expenses | $ 600 | $ 1,700 | |||||
Measurement period adjustments, increase in purchase price | (2,170) | ||||||
Measurement period adjustments, increase in inventories | 100 | ||||||
Adjustment to deferred tax liabilities | 1,600 | ||||||
Decrease in goodwill | $ 1,700 | ||||||
Desser Aerospace | Customer Relationships | |||||||
Business Acquisition [Line Items] | |||||||
Useful life (in years) | 8 years 3 months 18 days | ||||||
Loar | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | 31,800 | ||||||
Working capital adjustment | $ 1,800 | ||||||
Honeywell International | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 105,000 |
Acquisitions - Fair Value of Ac
Acquisitions - Fair Value of Acquired Assets and Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |||||
Apr. 24, 2024 | Jul. 03, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | ||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 390,135 | $ 351,781 | ||||
Cash consideration | [1] | $ 112,264 | $ 11,711 | |||
Turbine Controls, Inc. ("TCI") | ||||||
Business Acquisition [Line Items] | ||||||
Receivables | $ 9,122 | |||||
Contract assets | 16,193 | |||||
Inventories | 5,512 | |||||
Other current assets | 570 | |||||
Other assets | 214 | |||||
Property and equipment | 6,434 | |||||
Intangible assets | 59,000 | |||||
Goodwill | 40,093 | |||||
Operating lease right-of-use assets | 7,832 | |||||
Total assets acquired | 144,970 | |||||
Accounts payable | (9,764) | |||||
Accrued expenses and other current liabilities | (5,619) | |||||
Long-term operating lease obligations | (7,339) | |||||
Total liabilities assumed | (22,723) | |||||
Net assets acquired, excluding cash | 122,248 | |||||
Cash consideration | 112,248 | |||||
Post-close adjustment | 10,000 | |||||
Total | 122,248 | |||||
Total | $ 122,200 | |||||
Desser Aerospace | ||||||
Business Acquisition [Line Items] | ||||||
Receivables | $ 7,383 | |||||
Inventories | 31,228 | |||||
Other current assets | 515 | |||||
Property and equipment | 2,527 | |||||
Intangible assets | 21,950 | |||||
Goodwill | 53,942 | |||||
Operating lease right-of-use assets | 6,679 | |||||
Total assets acquired | 124,224 | |||||
Accounts payable | (10,128) | |||||
Accrued expenses and other current liabilities | (5,793) | |||||
Long-term operating lease obligations | (5,937) | |||||
Deferred tax liabilities | (2,666) | |||||
Total liabilities assumed | (24,524) | |||||
Net assets acquired, excluding cash | 99,700 | |||||
Cash consideration | 101,870 | |||||
Post-close adjustment | (2,170) | |||||
Total | $ 99,700 | |||||
[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. |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Turbine Controls, Inc. ("TCI") | ||||
Business Acquisition [Line Items] | ||||
Revenue | $ 273,070 | $ 225,469 | $ 539,280 | $ 433,012 |
(Loss) Income from continuing operations | (2,791) | 8,597 | 10,045 | 15,117 |
Desser Aerospace And VSE | ||||
Business Acquisition [Line Items] | ||||
Revenue | 265,959 | 229,066 | 507,498 | 441,565 |
(Loss) Income from continuing operations | $ (2,777) | $ 11,001 | $ 9,323 | $ 20,353 |
Acquisitions - Adjusted Purchas
Acquisitions - Adjusted Purchase Price (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Sep. 27, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | ||
Business Acquisition [Line Items] | |||||
Goodwill | $ 390,135 | $ 351,781 | |||
Cash consideration | [1] | $ 112,264 | $ 11,711 | ||
Honeywell International | |||||
Business Acquisition [Line Items] | |||||
Other current assets | $ 12,000 | ||||
Property and equipment | 2,714 | ||||
Intangible assets | 16,200 | ||||
Goodwill | 74,086 | ||||
Total assets acquired | 105,000 | ||||
Cash consideration | 105,000 | ||||
Total | $ 105,000 | ||||
[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. |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Feb. 29, 2024 USD ($) agreement | Jun. 30, 2024 USD ($) | Mar. 31, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating lease right-of-use assets | $ 34,419 | $ 34,419 | $ 28,684 | ||||
Alexandria, VA Headquarters | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Operating lease right-of-use assets | 7,100 | 7,100 | |||||
Property and equipment | 2,600 | 2,600 | |||||
Operating lease obligations | 11,000 | 11,000 | |||||
Discontinued Operations, Held-for-Sale | Federal And Defense Segment | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of agreements | agreement | 2 | ||||||
Consideration on disposal | $ 44,000 | ||||||
Discontinued operation, loss from disposal of discontinued operation, before income tax | 0 | $ (12,700) | $ 0 | (12,663) | $ 0 | ||
Transaction fees | $ 2,500 | ||||||
Accrued expenses and other current liabilities | $ 7,000 | $ 7,000 | $ 19,537 |
Discontinued Operations - Incom
Discontinued Operations - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss from discontinued operations, net of tax | $ 0 | $ (1,234) | $ (18,711) | $ (237) | |
Discontinued Operations, Held-for-Sale | Federal And Defense Segment | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Revenues | 0 | 67,039 | 26,268 | 133,885 | |
Costs and operating expenses | 0 | 68,818 | 34,629 | 134,506 | |
Loss from discontinued operations | 0 | (1,779) | (8,361) | (621) | |
Other FDS impairment | 0 | 0 | 4,204 | 0 | |
Loss on the sale of discontinued operations | 0 | $ 12,700 | 0 | 12,663 | 0 |
Total loss before income taxes | 0 | (1,779) | (25,228) | (621) | |
Provision for income taxes | 0 | (545) | (6,517) | (384) | |
Loss from discontinued operations, net of tax | $ 0 | $ (1,234) | $ (18,711) | $ (237) |
Discontinued Operations - Balan
Discontinued Operations - Balance Sheet (Details) - Discontinued Operations, Held-for-Sale - Federal And Defense Segment - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Cash and cash equivalents | $ 162 | |
Receivables, net | 10,805 | |
Contract assets | 25,109 | |
Inventories | 472 | |
Other current assets | 6,154 | |
Property and equipment, net | 6,102 | |
Intangible assets, net | 3,505 | |
Goodwill | 31,575 | |
Operating lease right-of-use assets | 9,097 | |
Other assets | 21 | |
Total assets held-for-sale | 93,002 | |
Liabilities | ||
Accounts payable | 20,893 | |
Accrued expenses and other current liabilities | $ 7,000 | 19,537 |
Long-term operating lease obligations | 8,942 | |
Deferred tax liabilities | 4,019 | |
Total liabilities held-for-sale | $ 53,391 |
Discontinued Operations - Cash
Discontinued Operations - Cash Flows Statement (Details) - Federal And Defense Segment - Discontinued Operations, Held-for-Sale - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation and amortization | $ 150 | $ 1,437 |
Purchases of property and equipment | 0 | 92 |
Stock-based compensation | $ 0 | $ 73 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Disaggregation of Revenue [Line Items] | |||||
Revenues: | $ 265,959 | $ 205,223 | $ 507,498 | $ 393,810 | |
Billed and billable receivables | 168,238 | 168,238 | $ 127,958 | ||
Contract assets | 28,575 | 28,575 | 8,049 | ||
Contract liabilities | 3,138 | 3,138 | $ 2,785 | ||
Repair | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 75,370 | 35,561 | 126,044 | 67,615 | |
Distribution | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 190,589 | 169,662 | 381,454 | 326,195 | |
Commercial | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 237,780 | 161,857 | 440,363 | 306,461 | |
Other government | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 28,179 | 43,366 | 67,135 | 87,349 | |
Aviation | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 192,828 | 124,729 | 355,211 | 237,964 | |
Aviation | Repair | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 75,370 | 35,561 | 126,044 | 67,615 | |
Aviation | Distribution | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 117,458 | 89,168 | 229,167 | 170,349 | |
Aviation | Commercial | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 191,296 | 123,820 | 349,280 | 235,880 | |
Aviation | Other government | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 1,532 | 909 | 5,931 | 2,084 | |
Fleet | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 73,131 | 80,494 | 152,287 | 155,846 | |
Fleet | Repair | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 0 | 0 | 0 | 0 | |
Fleet | Distribution | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 73,131 | 80,494 | 152,287 | 155,846 | |
Fleet | Commercial | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | 46,484 | 38,037 | 91,083 | 70,581 | |
Fleet | Other government | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues: | $ 26,647 | $ 42,457 | $ 61,204 | $ 85,265 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Jun. 30, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities | $ 1.7 | $ 0.8 |
Debt - Long-Term debt (Details)
Debt - Long-Term debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 466,500 | $ 433,000 |
Less: debt issuance costs | (2,992) | (3,656) |
Total long-term debt | 463,508 | 429,344 |
Less: current portion | (30,000) | (22,500) |
Long-term debt, less current portion | 433,508 | 406,844 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt | 292,500 | 300,000 |
Revolving Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 174,000 | $ 133,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Loans Payable And Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 8.18% | |
Revolving Facility | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 8.20% | |
Letters of credit outstanding | $ 0.8 | $ 0.8 |
Debt - Loan Payments (Details)
Debt - Loan Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Remainder of 2024 | $ 15,000 | |
2025 | 30,000 | |
2026 | 421,500 | |
Total | 466,500 | $ 433,000 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Remainder of 2024 | 15,000 | |
2025 | 30,000 | |
2026 | 247,500 | |
Total | 292,500 | |
Revolving Facility | ||
Debt Instrument [Line Items] | ||
Remainder of 2024 | 0 | |
2025 | 0 | |
2026 | 174,000 | |
Total | $ 174,000 | $ 133,000 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Reclassification | $ 1,200 | $ 2,300 |
Cash Flow Hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Amount | 3,500 | 3,500 |
Cash Flow Hedging | Interest Rate Swap, 2.8% | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Amount | $ 150,000 | $ 150,000 |
Paid Fixed Rate | 2.80% | 2.80% |
Cash Flow Hedging | Interest Rate Swap, 4.5% | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional Amount | $ 100,000 | $ 100,000 |
Paid Fixed Rate | 4.50% | 4.50% |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding (in shares) | 17,152,661 | 12,886,100 | 16,468,288 | 12,865,394 |
Effect of dilutive shares (in shares) | 49,454 | 30,898 | 102,745 | 56,432 |
Diluted weighted average common shares outstanding (in shares) | 17,202,115 | 12,916,998 | 16,571,033 | 12,921,826 |
Business Segments - Segment Inf
Business Segments - Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) segment | Jun. 30, 2023 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Revenues: | $ 265,959 | $ 205,223 | $ 507,498 | $ 393,810 |
Operating income: | 6,132 | 20,637 | 30,306 | 37,415 |
Corporate/unallocated expenses(a) | ||||
Segment Reporting Information [Line Items] | ||||
Operating income: | (20,547) | (3,000) | (25,300) | (7,785) |
Aviation | ||||
Segment Reporting Information [Line Items] | ||||
Revenues: | 192,828 | 124,729 | 355,211 | 237,964 |
Aviation | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income: | 24,468 | 15,783 | 46,778 | 31,447 |
Fleet | ||||
Segment Reporting Information [Line Items] | ||||
Revenues: | 73,131 | 80,494 | 152,287 | 155,846 |
Fleet | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income: | $ 2,211 | $ 7,854 | $ 8,828 | $ 13,753 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill Roll Forward (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Balance as of beginning of period | $ 351,781 |
Acquisitions | 40,093 |
Measurement period adjustment | (1,739) |
Balance as of end of period | 390,135 |
Aviation | |
Goodwill [Roll Forward] | |
Balance as of beginning of period | 288,591 |
Acquisitions | 40,093 |
Measurement period adjustment | (1,739) |
Balance as of end of period | 326,945 |
Fleet | |
Goodwill [Roll Forward] | |
Balance as of beginning of period | 63,190 |
Acquisitions | 0 |
Measurement period adjustment | 0 |
Balance as of end of period | $ 63,190 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 239,360 | $ 249,760 |
Accumulated Amortization | (73,971) | (135,630) |
Net Intangible Assets | 165,389 | 114,130 |
Contract and customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 230,690 | 241,090 |
Accumulated Amortization | (65,301) | (127,022) |
Net Intangible Assets | 165,389 | 114,068 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 8,670 | 8,670 |
Accumulated Amortization | (8,670) | (8,608) |
Net Intangible Assets | $ 0 | $ 62 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) $ in Millions | Jun. 30, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, gross (excluding goodwill), fully amortized | $ (69.4) |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Expected Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 9,618 | |
2025 | 19,235 | |
2026 | 19,111 | |
2027 | 17,365 | |
2028 | 16,531 | |
Thereafter | 83,529 | |
Net Intangible Assets | $ 165,389 | $ 114,130 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - Other assets - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-COLI assets held in Deferred Supplemental Compensation Plan | $ 615 | $ 594 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | $ 6,471 | $ 2,840 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 24.80% | 24% | 17.40% | 24.30% |
Lease Abandonment and Other R_2
Lease Abandonment and Other Restructuring Costs (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 USD ($) ft² | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) ft² | Jun. 30, 2023 USD ($) | [1] | ||
Restructuring Cost and Reserve [Line Items] | ||||||
Lease abandonment charge | $ 12,857 | $ 0 | $ 12,857 | [1] | $ 0 | |
Contract Termination | Vienna, VA | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Net rentable area (in square foot) | ft² | 4 | 4 | ||||
Lease Abandonment | Contract Termination | Alexandria, VA | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Net rentable area (in square foot) | ft² | 95 | 95 | ||||
Lease abandonment charge | $ 12,900 | |||||
Reduction in operating lease right-of-use assets | 6,700 | |||||
Exit and disposal costs | 3,700 | |||||
Lease abandonment liability | 13,900 | $ 13,900 | ||||
Lease Abandonment | Contract Termination | Alexandria, VA | Leasehold Improvements | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Tangible asset impairment charges | 2,500 | |||||
Cancellation of contracts and leasing agreements | Other Restructuring | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring charges | 3,800 | 3,800 | ||||
Restructuring reserve | $ 1,100 | $ 1,100 | ||||
[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. |