Exhibit 99.1
VSE Reports Second Quarter 2004 Results
Company Earns $0.38 Per Share in Quarter
Alexandria, Virginia, July 29, 2004 - VSE Corporation (Nasdaq: VSEC)
reported the following consolidated financial results for the three- and six-
month periods ended June 30, 2004 and 2003:
VSE Corporation and Subsidiaries
Consolidated Statements of Income (unaudited)
(dollars in thousands, except share data)
_________________________________________________________________________________________
Three Months Six Months
2004 2003 2004 2003
---- ---- ---- ----
Revenues, principally from contracts $ 54,042 $ 29,368 $ 96,652 $ 55,830
Costs and expenses of contracts 52,431 28,608 93,894 54,373
--------- --------- --------- ---------
Gross profit 1,611 760 2,758 1,457
Selling, general and administrative expenses 245 48 257 90
Interest income, net (26) (15) (45) (31)
--------- --------- --------- ---------
Income before income taxes 1,392 727 2,546 1,398
Provision for income taxes 538 291 984 530
--------- --------- --------- ---------
Net income $ 854 $ 436 $ 1,562 $ 868
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Weighted average shares outstanding:
Basic 2,221,559 2,188,635 2,218,887 2,187,841
Diluted 2,305,911 2,220,333 2,296,262 2,222,576
Earnings per share:
Basic $ .38 $ .20 $ .70 $ .40
Diluted .37 .20 .68 .39
Financial Results
VSE revenues increased about $24.7 million (up 84%) for the quarter and
about $40.8 million (up 73%) for the six months compared to the same periods of
last year, primarily due to a higher volume of work in the company's BAV ship
transfer division and in its Communications and Engineering (CED) and Fleet
Maintenance divisions.
VSE net income increased about $418 thousand (up 96%) for the quarter and
about $694 thousand (up 80%) for the six months compared to the same periods of
last year, primarily due to the increase in revenues, to higher profit margins
in the Systems Engineering Division, Fleet Maintenance Division, and Energetics
based in part on the Company's ability to spread corporate costs over a larger
revenue base, and to the elimination in 2004 of any significant losses on
residual Telecommunications Technologies Division work. The increase in net
income for the six-month period was partially offset by losses incurred on the
CED Rapid Response support contract and by an increase in selling, general and
administrative expenses primarily attributable to costs associated with vacant
facilities.
Commenting on the financial results, VSE Chairman, President and CEO/COO
Don Ervine said, "Second quarter revenues of about $54 million are a near record
for the company. Net earnings of about $854 thousand for the quarter ($.38 per
share) are keeping pace with the increase in revenues, and margins in some of
our work are benefited by the higher volume."
"Looking forward, we are focused on executing our plan to deliver high
quality products and services while increasing revenues and profit. One
indicator is the increase in our funded backlog from about $83 million at the
end of 2003 to about $150 million at the end of June 2004. We have a number of
proposals in preparation for new and repeat work, and we continue to seek
opportunities for growth, including potential acquisitions."
"I look forward to reporting on our progress in the months ahead."
VSE provides diversified services to the engineering, energy and
environment, defense, 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.
VSE shares are traded on Nasdaq under the symbol "VSEC."
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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