Exhibit 99.1
VSE CORPORATION
VSE REPORTS THIRD QUARTER 2005 RESULTS
Company Earns $0.66 Per Share Diluted in Quarter
Alexandria, Virginia, October 28, 2005 - VSE Corporation (Nasdaq: VSEC)
reported the following consolidated financial results for the periods ended
September 30, 2005 and 2004:
VSE Corporation and Subsidiaries
Consolidated Statements of Income (unaudited)
(in thousands, except share and per share amounts)
- ------------------------------------------------------------------------------------------------
Three Months Nine Months
2005 2004 2005 2004
---- ---- ---- ----
Revenues, principally from contracts $ 76,600 $ 62,223 $ 215,201 $ 158,869
Costs and expenses of contracts 73,883 60,620 207,354 154,505
--------- --------- --------- ---------
Gross profit 2,717 1,603 7,847 4,364
Selling, general and administrative expenses 173 192 340 450
Interest income, net (43) (31) (84) (76)
--------- --------- --------- ---------
Income before income taxes 2,587 1,442 7,591 3,990
Provision for income taxes 1,000 557 2,935 1,542
--------- --------- --------- ---------
Income from continuing operations 1,587 885 4,656 2,448
Loss from discontinued operations, net of tax - - - (1)
--------- --------- --------- ---------
Net income $ 1,587 $ 885 $ 4,656 $ 2,447
========= ========= ========= =========
Weighted average shares outstanding:
Basic 2,348,228 2,225,307 2,313,058 2,221,043
Diluted 2,417,056 2,301,040 2,382,986 2,297,866
Earnings per share:
Basic - Income from continuing operations $ .68 $ .40 $ 2.01 $ 1.10
Basic - Loss from discontinued operations .00 .00 .00 .00
--------- --------- --------- ---------
Basic - Net income $ .68 $ .40 $ 2.01 $ 1.10
========= ========= ========= =========
Diluted - Income from continuing operations $ .66 $ .38 $ 1.95 $ 1.06
Diluted - Loss from discontinued operations .00 .00 .00 .00
--------- --------- --------- ---------
Diluted - Net income $ .66 $ .38 $ 1.95 $ 1.06
========= ========= ========= =========
Financial Results
VSE revenues increased about $14.4 million (up 23%) and $56.3 million
(up 35%) for the three and nine-month periods compared to the same periods of
last year, primarily due to work on the Army's Trailer Ballistic Protection
System program and to an increase in work in VSE's BAV, Communications and
Engineering, Fleet Maintenance, and Systems and Engineering Divisions.
- more -
VSE Corporation News Release (continued)
VSE net income increased about $702 thousand (up 79%) and $2.2 million
(up 90%) for the three and nine-month periods compared to the same periods of
last year, primarily due to the profits associated with the additional revenues
and to an increase in gross margins. The increase in gross margins was
attributed to allocating fixed corporate costs over a larger revenue base and to
an increase in the percentage of work performed on time and materials and firm
fixed price contracts, which tend to have higher profit margins than cost
reimbursement contracts.
VSE typically has three quarterly reporting periods during the year that
include a recognition of BAV award fee income and one quarterly reporting period
that does not. The three-month periods ended September 30, 2005 and 2004 do not
include BAV award fee income.
CEO Comments
Commenting on the financial results, VSE Chairman, President and CEO/COO
Don Ervine said, "VSE third quarter revenues of about $76.6 million are a record
high quarter for the company, and earnings of about $1.6 million for the quarter
($.66 per share diluted) are keeping pace with the increase in revenues. Our
funded backlog at September 30, 2005, was about $212 million compared to about
$168 million at December 31, 2004."
"We continue to find promising opportunities to bid in the markets we
serve, and we expect to win a share of the work which will become available. Our
growth over the last two years has been the result of good marketing teamwork
and the versatility of our managers and employees in identifying and responding
to emerging customer requirements in a timely and professional manner. I look
forward to reporting on our continued progress in the months ahead."
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.
VSE provides diversified services to the engineering, energy and
environment, defense, and homeland security markets from more than 20 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.