VSE Corporation (NASDAQ: VSEC), a leader in aftermarket distribution and repair services, released its financial results for the third quarter of 2024, showcasing substantial growth in its Aviation segment and continued advancement in its Fleet segment.
Management Commentary
“We are thrilled to report our third quarter 2024 results, highlighted by our Aviation segment’s best-ever quarterly performance, with revenue surpassing $200 million,” stated John Cuomo, President and CEO of VSE Corporation. “This 34% year-over-year growth, along with record profitability, reflects strong contributions across our Aviation business. Key growth drivers include new distribution awards, expanded maintenance, repair, and overhaul (MRO) capabilities, the launch of our OEM-licensed manufacturing program, and added contributions from our recent Turbine Controls (TCI) acquisition.”
Cuomo added, “This quarter, we also completed integrating Desser Aerospace’s U.S. distribution business, launched a new Aviation e-commerce platform, made significant progress in establishing OEM-licensed manufacturing, and began distributing new products through our European Distribution Center in Hamburg, Germany. Our Aviation segment is on track for continued success through strategic repositioning and focused execution.”
In the Fleet segment, VSE continued its customer diversification strategy, with commercial customers accounting for 64% of revenue in the quarter. Activity with the United States Postal Service (USPS), temporarily reduced due to a system integration, has since stabilized, positioning the company for stronger revenue and profitability in the fourth quarter.
Chief Financial Officer Adam Cohn commented, “Our third quarter 2024 results demonstrate our commitment to financial discipline. We achieved positive free cash flow, reduced debt, and maintained an adjusted net leverage ratio within our target range of 3.0 to 3.5 times. Following a successful equity offering in October 2024, VSE is well-positioned with sufficient liquidity and flexibility for the acquisition of Kellstrom Aerospace in the fourth quarter. As we move forward, I am excited to drive stronger free cash flow and enhance shareholder value by executing on our strategic priorities.