VSE REPORTS FINANCIAL RESULTS FOR 2005
Company Earns $6.2 million ($2.58 per diluted share)
on Revenues of $280 million;
CEO Anticipates Continued Growth in 2006
Alexandria, Virginia, February 23, 2006 - VSE Corporation (Nasdaq: VSEC)
reported consolidated financial results for the three- and twelve-month periods
ended December 31, 2005 and 2004, as follows:
VSE Corporation and Subsidiaries
Consolidated Statements of Income
(dollars in thousands, except share data)
________________________________________________________________________________________________________
Three Months Twelve Months
2005 2004 2005 2004
---- ---- ---- ----
Revenues, principally from contracts $ 64,938 $ 57,142 $ 280,139 $ 216,011
Costs and expenses of contracts 62,426 55,336 269,780 209,841
--------- --------- --------- ---------
Gross profit 2,512 1,806 10,359 6,170
Selling, general and administrative expenses 240 186 580 636
Interest income, net (126) (26) (210) (102)
--------- --------- --------- ---------
Income before income taxes 2,398 1,646 9,989 5,636
Provision for income taxes 885 649 3,820 2,191
--------- --------- --------- ---------
Income from continuing operations 1,513 997 6,169 3,445
Loss from discontinued operations, net of tax - - - (1)
--------- --------- --------- ---------
Net income $ 1,513 $ 997 $ 6,169 $ 3,444
========= ========= ========= =========
Weighted average shares outstanding:
Basic 2,351,452 2,264,029 2,322,736 2,231,848
Diluted 2,418,857 2,345,865 2,392,027 2,309,932
Earnings per share:
Basic - Income from continuing operations $ .64 $ .44 $ 2.66 $ 1.54
Basic - Loss from discontinued operations .00 .00 .00 .00
--------- --------- --------- ---------
Basic - Net income $ .64 $ .44 $ 2.66 $ 1.54
========= ========= ========= =========
Diluted - Income from continuing operations $ .63 $ .43 $ 2.58 $ 1.49
Diluted - Loss from discontinued operations .00 .00 .00 .00
--------- --------- --------- ---------
Diluted - Net income $ .63 $ .43 $ 2.58 $ 1.49
========= ========= ========= =========
________________________________________________________________________________________________________
Financial Results
VSE revenues increased about $7.8 million (up 14%) and $64.1 million
(up 30%) for the three- and twelve-month periods compared to the same periods
of last year. Increases in 2005 were 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 Engineering
Divisions.
-more-
VSE net income increased about $516 thousand (up 52%) and $2.7 million
(up 79%) for the three- and twelve-month periods compared to the same periods
of last year. Increases in 2005 were 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.
CEO Comments
VSE Chairman, President and CEO/COO Don Ervine said, "The financial
results reported today are in line with the positive trend in VSE operations
and results reported over the past four years. Beginning in 2002, VSE revenues
have grown significantly as our customers' needs and funding have grown. With
the increase in revenues, we have been able to allocate our corporate costs
over a larger base and improve our margins on certain time and materials and
fixed price contracts. "
"As previously reported, during the fourth quarter of 2005 we received
new contracts and delivery orders representing potential revenues of up to
$495 million. Our contract funding or "bookings" during all of 2005 increased
to about $390 million, up 28% from 2004, and our funded backlog increased to
about $276 million at the end of 2005, up 64% from the prior year-end. Based on
these new awards, increased bookings, and funded backlog, and on our sense of
VSE's favorable position in several of the markets we serve, we anticipate
continued strength in VSE revenues and net income in 2006."
Safe Harbor
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
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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