VSE Corporation (Nasdaq: VSEC) reported the following unaudited
consolidated financial results for the three-month and twelve-month
periods ended December 31, 2013.
"We continue to focus on newer markets and service offerings during a
challenging time in our traditional markets," said Maurice "Mo"
Gauthier, VSE CEO. "While temporary suspension of our U.S. Army Reserve
("USARC") program and declines in some of our other federal government
work adversely impacted our operating results for the year, the bottom
line impact was largely mitigated by effective cost balancing and
contributions from our newer markets and service offerings. Our success
with these efforts in the Supply Chain Management Group is evidenced by
revenue growth and expansion into adjacent markets. In 2013, we now
derive more than 50% of our revenue from non-DoD customers and our
operating margins continue to improve."
Mr. Gauthier continued, "Bottom line success has led to strong cash
flow, allowing us to reduce our debt by approximately $50 million in
2013 and this positions us to consider a variety of options to increase
Revenues were $122.4 million in the fourth quarter of 2013 compared to
$136.9 million in the fourth quarter of 2012. For the full year,
revenues were $471.6 million in 2013 compared to $546.8 million in 2012.
Our revenues decreased by approximately $75 million or 14% for the year
ended December 31, 2013 as compared to the prior year. The revenue
decrease was due primarily to contract expirations and declines in
services ordered by clients on continuing contracts, including a $26
million reduction attributable to the expiration of a contract at the
end of 2012 to provide mechanical maintenance services for Mine
Resistance Ambush Protected ("MRAP") vehicles and systems in Kuwait; an
$18 million reduction in revenues from our vehicle and equipment
refurbishment work for the U.S. Army Reserve due to the interruption of
contract coverage in the third quarter of 2013; an $18 million reduction
in pass-through work provided on engineering and technical services task
orders; and a $20 million reduction in IT and energy consulting
revenues. These declines were offset partially by a $12 million increase
in Supply Chain Management revenues.
Operating income was $12 million for the fourth quarter of 2013 compared
to $11.8 million in the fourth quarter of 2012. For the full year,
operating income was $44.1 million in 2013 compared to $51.1 million in
2012. The decrease in our 2013 operating income is primarily due to our
Fourth quarter of 2013 income from continuing operations was $6.4
million, or $1.20 per diluted share, and $6.5 million, or $1.22 per
diluted share for the fourth quarter of 2012. For the full year, income
from continuing operations was $24 million for 2013, or $4.49 per
diluted share, compared to $27.4 million, or $5.15 per diluted share for
Net income was $5.4 million for the fourth quarter of 2013, or $1.01 per
diluted share, compared to $2.4 million, or $0.45 per diluted share for
the fourth quarter of 2012. For the full year, net income was $22.9
million for 2013, or $4.28 per diluted share, compared to $21.3 million,
or $4.01 per diluted share for 2012.
Bookings were $501 million and revenue was $472 million for 2013.
Bookings were $539 million and revenue was $547 million for 2012. Funded
contract backlog at December 31, 2013 was $236 million, compared to $268
million at September 30, 2013 and $250 million at December 31, 2012.
As of December 31, 2013, we have not completed a sale of the assets of
our subsidiary Integrated Concepts and Research Corporation and there is
no assurance that we will succeed in selling such assets. Accordingly,
we have abandoned the operations of the subsidiary and have included in
the loss from discontinued operations, net of tax, a charge of
approximately $1 million in the fourth quarter of 2013, which represents
the write-off of their remaining assets.
Operational Highlights in 2013
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 supply chain
management, logistics, engineering, energy, IT services, and consulting.
For additional information regarding VSE services and products, please
see the Company's web site at www.vsecorp.com
or contact Christine Kaineg, VSE Investor Relations, at (703) 329-3263.
Please refer to VSE's Annual Report on Form 10-K for the year ended
December 31, 2013, which we expect to file with the U.S. Securities and
Exchange Commission (SEC) on or about March 5, 2014. 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, 2013 and subsequent reports filed with the SEC.
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