VSE Reports Consolidated Financial Results for 2003
Company Earns $2.0 million ($0.92 a share);
CEO Anticipates Continued Improvement in 2004
Alexandria, Virginia, February 23, 2004 - VSE Corporation (Nasdaq: VSEC)
reported consolidated financial results for the three- and twelve-month periods
ended December 31, 2003 and 2002, as follows:
VSE Corporation and Subsidiaries
Consolidated Statements of Income
(dollars in thousands, except share data)
- --------------------------------------------------------------------------------------------
Three Months Twelve Months
2003 2002 2003 2002
Revenues, principally from contracts $ 42,238 $ 31,110 $ 134,459 $ 134,379
Costs and expenses of contracts 41,043 30,303 130,898 132,306
--------- --------- --------- ---------
Gross profit 1,195 807 3,561 2,073
Selling, general and administrative expenses 194 206 352 328
Interest (income) expense, net (20) (19) (69) 24
Impairment - intangible asset -- 576 -- 576
--------- --------- --------- ---------
Income before income taxes 1,021 44 3,278 1,145
Provision for income taxes 401 42 1,267 493
--------- --------- --------- ---------
Net income $ 620 $ 2 $ 2,011 $ 652
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Weighted average shares outstanding:
Basic 2,192,426 2,182,783 2,189,197 2,172,384
Diluted 2,239,722 2,204,862 2,230,226 2,196,390
Earnings per share:
Basic $ .28 $ .00 $ .92 $ .30
Diluted $ .28 $ .00 $ .90 $ .30
Financial Results
Consolidated revenues were substantially the same for the years ended
December 31, 2003 and 2002.During 2003 revenues decreased in some VSE divisions
and subsidiaries and increased in others. Revenue decreases were recorded in
the BAV Division, which performed work in 2002 that was not repeated in 2003,
and in the Telecommunications Technology Division (TTD), which began to phase
out operations in 2003. These decreases were offset by revenue increases from
the start up of the Communications and Engineering Division (CED) and an
increase in the revenues of the company's other active divisions compared to the
prior year.
Consolidated net income for 2003 increased about 208% (about $1.36 million)
compared to consolidated net income in 2002. This improvement was primarily due
to the phase out of TTD operations and a reduction of losses associated with
this division. Margin improvements reported in most of VSE's operating divisions
were partially offset by operating losses associated with CED contract billing
rates that do not recover all allocable costs required by VSE's government cost
accounting system, and to a lesser extent by start up costs associated with CED.
CEO Comments
VSE Chairman, President and CEO/COO Don Ervine said, "The financial results
reported today are in line with recent news releases indicating a positive trend
in VSE operations and results. We were able to offset declines in BAV revenues
in 2003 with new work in other areas, to improve margins in some divisions, and
to reduce the losses associated with TTD operations. TTD is expected to complete
all operations in 2004."
"We expect continued improvement in 2004. As recently announced, we
received a BAV delivery order for about $100 million to support the reactivation
and transfer of four KIDD-class destroyers, and we were awarded a new contract
to continue our support to the Naval Sea Systems Command Shipbuilding Support
Office. We continue to see an increase in work orders issued under the
U.S. Army Rapid Response support contract awarded to VSE earlier this year.
Based on these increases, a funded backlog of about $83 million at year end, and
the number of proposals pending evaluation or to be submitted this year, we
anticipate continued strength in consolidated revenues and net income in 2004."
VSE provides diversified services to the engineering, energy and
environment, security, and defense, services and homeland security markets from
more than 15 locations across the United States and around the world. For more
information on VSE services and products, please see the Company's web site at
www.vsecorp.com or contact Len Goldstein, Director of Business and New Product
Development at (703) 317-5202.
News Contact: C. S. Weber, CAO, (703) 329-4770
This news release contains statements which, to the extent they are not
recitations of historical fact, constitute "forward looking statements" under
federal securities laws. All such statements are intended to be subject to the
safe harbor protection provided by applicable securities laws. For discussions
identifying some important factors that could cause actual VSE results to differ
materially from those anticipated in the forward looking statements in this news
release, see VSE's public filings with the Securities and Exchange Commission.
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