VSE Corporation (Nasdaq: VSEC) reported the following unaudited
consolidated financial results for the three and twelve month periods
ended December 31, 2012.
*Revenue and operating income from our subsidiary, ICRC, a
construction management company, has been excluded from the table above
for all periods and in the narrative below because ICRC's financial
results are reported as discontinued operations.
"In 2012 our operating income and operating margins have improved," said
Maurice "Mo" Gauthier, VSE CEO. "Our government clients' budgetary
uncertainties will continue to present challenges for our industry, but
we believe the demand for our key programs centered on legacy systems
and equipment sustainment will endure. Our diversification strategy
continues to be successful, and we are exploring opportunities to
further expand our customer base and market offerings through both
internal efforts and potential acquisitions. Revenue from our DoD
customers comprised 57% of our total revenue in 2012 as compared to 83%
in 2010. We believe we are positioned to continue to withstand industry
challenges in the coming years."
Mr. Gauthier continued, "We have made two key strategic decisions
concerning our operations. We decided to divest and sell our subsidiary
ICRC, and thereby eliminate our Infrastructure Group. Due to the
expiration of ICRC's MARAD contract in 2012, we determined that the
expected financial results of our remaining construction management
services business would not justify the continuation of its operations.
Also, we are combining the operations of our Akimeka and G&B
subsidiaries to more efficiently leverage their synergies and provide
more cost efficient IT solutions to our clients."
Revenues were $137 million in the fourth quarter of 2012 compared to
$140 million in the fourth quarter of 2011. For the full year of 2012,
revenues were $547 million in 2012 compared to $581 million in 2011.
Revenues decreased approximately $34 million, or 6%, for the year ended
December 31, 2012 as compared to the prior year. The revenue decrease
was primarily due to a decrease in revenues associated with our expiring
R2 contract of approximately $72M. The decline in revenue was partially
offset by an increase in work on our U.S. Army Reserve vehicle
refurbishment program and the inclusion of revenues from our Supply
Chain Management Group, established in June 2011.
Operating income was $11.8 million in the fourth quarter of 2012
compared to $11.1 million in the fourth quarter of 2011. For the full
year of 2012, operating income was $51.1 million, compared to $36.1
million in 2011. The full year increase was primarily attributable to
the inclusion of our Supply Chain Management Group.
Fourth quarter income from continuing operations was $6.5 million, or
$1.22 per share, compared to $6 million, or $1.14 per diluted share for
the fourth quarter of 2011. Income from continuing operations was $27.4
million for the full year of 2012, or $5.15 per diluted share, compared
to $20.2 million, or $3.83 per diluted share for 2011.
Net income was $21.3 million for the full year of 2012, or $4.01 per
share, compared to $20.6 million, or $3.90 per share for 2011. We
recorded a one-time loss of approximately $6 million for discontinued
operations of the Infrastructure Group for 2012.
Bookings were $539 million for 2012 compared to $493 million for 2011.
Funded contract backlog at December 31, 2012 was $250 million, compared
to $282 million at December 31, 2011. Federal budget constraints and
contract protests have affected the timeliness of awards in our market.
Operational Highlights in 2012
Please refer to VSE's Annual Report on Form 10-K for the year ended
December 31, 2012, which we expect to file with the U.S. Securities and
Exchange Commission (SEC) on or about March 6, 2013, for additional
information regarding our financial condition and results of operations.
Established in 1959, VSE is a diversified federal services company with
experience in solving issues of global significance with integrity,
agility, and value. VSE is dedicated to making our clients successful by
delivering talented people and innovative solutions for logistics,
engineering, IT services, construction management, consulting and supply
chain management. For additional information regarding VSE services and
products, please see the Company's web site at www.vsecorp.com
or contact Randy Hollstein, VSE Corporate Vice President of Sales and
Marketing, at (703) 329-3206.
VSE encourages investors and others to review the detailed reporting and
disclosures contained in VSE's public filings with the SEC 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.
This news release contains statements that 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 SEC, including VSE's Annual Report on Form 10-K for the
year ended December 31, 2011 and subsequent reports filed with the SEC.
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