VSE Reports Third Quarter 2008 Results
Company Earns $1.04 Per Share Diluted in Quarter (up 58%)
and $2.68 Per Share Diluted for Nine Months (up 38%)
Alexandria, Virginia, October 29, 2008 - VSE Corporation (Nasdaq: VSEC)
reported the following consolidated financial results for the periods ended
September 30, 2008 and 2007:
VSE Corporation and Subsidiaries
Consolidated Statements of Income (unaudited)
(in thousands, except share and per share amounts)
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Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
---- ---- ---- ----
Revenues $306,811 $174,692 $747,222 $455,025
Costs and expenses of contracts 297,330 168,747 723,097 438,899
-------- -------- -------- --------
Gross profit 9,481 5,945 24,125 16,126
Selling, general and
administrative expenses 758 576 1,829 970
Interest expense (income), net (5) (161) (118) (532)
-------- -------- -------- --------
Income before income taxes 8,728 5,530 22,414 15,688
Provision for income taxes 3,419 2,171 8,738 6,053
-------- -------- -------- --------
Net income $5,309 $3,359 $13,676 $9,635
======== ======== ======== ========
Basic earnings per share $1.05 $0.67 $2.70 $1.96
Basic weighted average shares
outstanding 5,075,830 5,024,416 5,066,837 4,922,056
Diluted earnings per share $1.04 $0.66 $2.68 $1.94
Diluted weighted shares
outstanding 5,099,794 5,063,279 5,093,715 4,977,371
Dividends declared per share $0.045 $0.04 $0.13 $0.115
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Financial Results
VSE revenues increased approximately $132 million (up 76%) and $292
million (up 64%) for the three- and nine-month periods of 2008 compared to the
same periods of 2007. These increases occurred principally in several U.S. Army
programs, including the Army's Equipment Support Program and the Assured
Mobility Systems program, as well as increases in the revenues of several VSE
business units. Additionally, revenues from new VSE subsidiaries Integrated
Concepts and Research Corporation (ICRC) and G&B Solutions, Inc. (G&B) added
to the increase in revenues in 2008.
Selling, general and administrative expenses increased for the three- and
nine-month periods of 2008 compared to the same periods of 2007 primarily due to
the amortization of intangible assets attributable to the ICRC and G&B
acquisitions and the inclusion of the acquired companies' selling, general and
administrative expenses in our results in 2008.
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VSE Corporation News Release (continued)
VSE net income increased approximately $1.9 million (up 58%) and $4.0
million (up 42%) for the three- and nine-month periods of 2008 compared to the
same periods of 2007. The increases in net income were primarily due to the
profits associated with the increases in revenues reported above and to the
profits earned by ICRC and G&B.
VSE's funded backlog was approximately $706 million at September 30, 2008
compared to approximately $408 million at December 31, 2007.
CEO Comments
VSE CEO Mo Gauthier commented, "VSE continues to perform as a growth
company. Our revenues have increased significantly by meeting urgent
requirements from existing and new customers. Profits have increased as our
volume increases, and improving our margins remains a top VSE goal. Our key
indicators are positive, including significant new contract awards, a growing
funded backlog, increases in employees, and identified opportunities to bid and
win new work. We expect to complete a record year in 2008, and the current
prospects for continued growth in 2009 appear to be favorable; however, 2009 is
a federal government transition year and government spending priorities may
change in ways that we cannot predict. We look forward to reporting on our
progress."
VSE Services
VSE provides engineering and consulting services, systems integration,
infrastructure support, and information technology management and solutions,
principally to agencies of the United States Government and other government
prime contractors at locations across the United States and around the world.
For additional information on VSE services and products, please see our web site
at www.vsecorp.com or contact Randy Hollstein, Director of Business Development,
at (703) 329-3206.
The company encourages investors and others to review the detailed
reporting and disclosures contained in VSE public filings for further
information and analysis of VSE's financial condition and results of operations.
The public filings include additional discussion about the status of specific
customer programs and contract awards, risks, revenue sources and funding,
dependence on material customers, and management's discussion of short and long
term business challenges and opportunities.
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 News Contact: Craig Weber -- (703) 329-4770.
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