VSE (NASDAQ: VSEC) lifts 2026 outlook after $2.025B PAG acquisition
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
VSE Corporation reported record first quarter 2026 results, led by strong aviation aftermarket growth and major acquisitions. Revenue rose to $324.6 million, up 26.8% from 2025, while GAAP net income from continuing operations increased to $29.1 million, up 108.0%. Diluted EPS from continuing operations was $1.04, with Adjusted EPS of $1.17. Adjusted EBITDA grew 37.4% to $55.4 million, lifting Adjusted EBITDA margin to 17.1%.
VSE closed two strategic deals: the acquisition of NorthStar Technologies on April 1, 2026 and the acquisition of Precision Aviation Group for $2.025 billion in cash and equity on May 5, 2026, significantly expanding engine services, repair capabilities, and global footprint. To support PAG, the company completed follow-on equity and tangible equity unit offerings and put in place a new $900 million Term Loan B and an upsized $500 million revolver.
As of March 31, 2026, VSE held $1.239 billion in cash and cash equivalents and total debt of $366.3 million, resulting in negative net debt. Free cash flow was $(68.7) million for the quarter, reflecting working capital and investment needs. The company raised its full year 2026 revenue growth outlook to a range of 57% to 61% and now expects full year Adjusted EBITDA margin between 18.1% and 18.5%, both primarily due to including PAG while keeping expectations for the underlying business unchanged.
Positive
- Record Q1 growth and profitability: Revenue rose 26.8% to $324.6 million, net income from continuing operations increased 108.0% to $29.1 million, and Adjusted EBITDA grew 37.4% to $55.4 million with margin expanding to 17.1%.
- Transformative PAG acquisition and strengthened balance sheet: The $2.025 billion Precision Aviation Group deal significantly expands scale, while equity and tangible equity unit offerings plus new debt facilities leave VSE with negative net debt at March 31, 2026 and higher 2026 revenue and margin guidance.
Negative
- Negative free cash flow: Free cash flow was $(68.7) million for the quarter, as net cash used in operating activities of $(62.3) million and $6.5 million of capital expenditures reflected working capital build and investment needs.
Insights
VSE combines strong Q1 growth with a transformative aviation acquisition and higher 2026 guidance.
VSE Corporation delivered double-digit top- and bottom-line expansion in Q1 2026. Revenue grew 26.8% to $324.6 million, while net income from continuing operations rose 108.0% to $29.1 million. Adjusted EBITDA increased 37.4% to $55.4 million, lifting margin to 17.1%, helped by higher-margin distribution and repair mix and acquisition synergies.
The acquisition of Precision Aviation Group for $2.025 billion and the earlier purchase of NorthStar Technologies materially expand scale, engine services and global repair capabilities. To fund PAG and refinance debt, VSE raised equity and tangible equity units and put in place a new $900 million Term Loan B plus a larger $500 million revolver, ending Q1 with $1.239 billion in cash and negative net debt.
Management now expects full year 2026 revenue growth of 57% to 61% versus a prior 19% to 23% range, and Adjusted EBITDA margin of 18.1% to 18.5% versus 16.8% to 17.3%. These changes are attributed to including PAG and do not change the outlook for the existing business. Future filings may provide more detail on integration progress, synergy realization and the evolution of Adjusted Net Leverage, which management expects to be below 3.0x pro forma and to improve as Adjusted EBITDA and cash generation grow.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 revenue: $324.6 million
Q1 2026 net income from continuing operations: $29.1 million
Q1 2026 Adjusted EBITDA: $55.4 million
+5 more
8 metrics
Q1 2026 revenue
$324.6 million
Three months ended March 31, 2026; up 26.8% year-over-year
Q1 2026 net income from continuing operations
$29.1 million
Three months ended March 31, 2026; up 108.0% year-over-year
Q1 2026 Adjusted EBITDA
$55.4 million
Three months ended March 31, 2026; up 37.4% year-over-year; 17.1% margin
Precision Aviation Group purchase price
$2.025 billion
Acquisition consideration in cash and equity on May 5, 2026
Cash and cash equivalents
$1.239 billion
Balance as of March 31, 2026
Total debt outstanding
$366.3 million
Principal amount of debt as of March 31, 2026
Free cash flow
$(68.7) million
Three months ended March 31, 2026, including operating cash flow and capex
2026 revenue growth guidance
57%–61%
Updated full year 2026 consolidated revenue growth outlook including PAG
Key Terms
Adjusted EBITDA, tangible equity units, Adjusted Net Leverage, MRO, +1 more
5 terms
Adjusted EBITDA financial
"Adjusted EBITDA(2) of $55.4 million increased 37.4%"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
tangible equity units financial
"completed follow-on equity and tangible equity unit offerings"
Adjusted Net Leverage financial
"Pro forma for the acquisition, Adjusted Net Leverage(2) is now expected to be below 3.0x"
Adjusted net leverage measures a company’s debt load relative to its ongoing cash earnings after making standard accounting tweaks — for example, removing one‑time cash items or adding persistent obligations like leases. Think of it as a household’s mortgage balance compared with steady monthly income: it shows how comfortably a company can service debt from regular operations. Investors use it to compare financial risk across businesses and to gauge creditworthiness.
MRO technical
"expanded MRO capacity, invested in new growth opportunities"
MRO stands for Maintenance, Repair, and Operations, referring to the supplies and services companies provide to keep machinery, buildings, and infrastructure functioning smoothly. These essentials are vital for ongoing business activities, much like routine car maintenance keeps a vehicle running reliably. Investors pay attention to MRO companies because their performance reflects the health of industries that rely heavily on regular upkeep and support services.
TTM Acquisition Adjusted EBITDA financial
"TTM Acquisition Adjusted EBITDA includes pre-acquisition portion of EBITDA"
Earnings Snapshot
Revenue: $324.6 million · Guidance included
Q1 2026
Revenue
$324.6 million
+26.8% YoY
Net income from continuing operations
$29.1 million
+108.0% YoY
Diluted EPS from continuing operations
$1.04
+55.2% YoY
Adjusted EBITDA
$55.4 million
+37.4% YoY
Guidance
For full year 2026, VSE expects revenue growth of 57%–61% and Adjusted EBITDA margin of 18.1%–18.5%, reflecting the inclusion of Precision Aviation Group while leaving the underlying business outlook unchanged.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 5, 2026
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||||||||||||
(Address of Principal Executive Offices) | (Zip Code) | ||||||||||||||||
(954 ) 430-6600
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.02 Results of Operations and Financial Condition.
On May 5, 2026, VSE Corporation (the "Company") issued a press release reporting its financial results for the first quarter ended March 31, 2026. Additionally, the Company will make available related materials to be discussed during the Company’s webcast and conference call referred to in such press release. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated by reference.
The information in the preceding paragraph, as well as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. It may only be incorporated by reference into another filing under the Exchange Act or the Securities Act of 1933, as amended if such subsequent filing specifically references this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit | |||||
| Number | |||||
| 99.1 | Press release dated May 5, 2026, entitled, "VSE Corporation Announces First Quarter 2026 Results." | ||||
| 104 | Cover Page Interactive Data File | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
VSE CORPORATION | |||||||||||
(Registrant) | |||||||||||
Date: | May 5, 2026 | By: | /s/ Adam R. Cohn | ||||||||
| Adam R. Cohn | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||
VSE Corporation Announces First Quarter 2026 Results
Record Revenue and Profitability
Updates Full Year 2026 Guidance to Include Precision Aviation Group Acquisition; Underlying Business Outlook Unchanged
MIRAMAR, FLORIDA, May 5, 2026 - VSE Corporation (NASDAQ: VSEC, VSECU, "VSE", or the "Company"), a leading provider of aviation aftermarket distribution and repair services, announced today results for the first quarter 2026.
FIRST QUARTER 2026 RESULTS
(As compared to the First Quarter 2025)(1)
▪Total Revenues of $324.6 million increased 26.8%
▪GAAP Net Income of $29.1 million increased 108.0%
▪GAAP EPS (Diluted) of $1.04 increased 55.2%
▪Adjusted EBITDA(2) of $55.4 million increased 37.4%
▪Adjusted Net Income(2) of $32.6 million increased 101.6%
▪Adjusted EPS (Diluted)(2) of $1.17 increased 50.0%
1 From continuing operations
2 Non-GAAP measures. See additional information at the end of this release regarding non-GAAP financial measures.
MANAGEMENT COMMENTARY
"VSE is off to a record start to 2026, with organic revenue growth of 15% in the quarter, led by strong performance in our distribution business and supported by continued growth in MRO. This growth was driven by robust commercial engine aftermarket activity, strong execution on new programs, and continued market share gains," said John Cuomo, President and Chief Executive Officer of VSE Corporation. "In the first quarter, we also advanced key OEM distribution programs, began implementing new business awards, expanded MRO capacity, invested in new growth opportunities, and made meaningful progress on our acquisition integrations.
"On April 1, 2026, we acquired NorthStar Technologies, LLC (“NorthStar”), a provider of MRO and third-party logistics services supporting the engine aftermarket. This acquisition expands our engine service capabilities in the business and general aviation market and strengthens our OEM-focused strategy by deepening integration within OEM aftermarket supply chains while addressing increasing demand for teardown and labor-intensive services.
"On May 5, 2026, we completed the acquisition of Precision Aviation Group (“PAG”), further expanding our global footprint, strengthening our repair capabilities, and enhancing our ability to deliver integrated, end-to-end solutions to our customers. With the addition of PAG, a robust pipeline of organic growth opportunities, and multiple strategic initiatives advancing in parallel, we believe we are well-positioned to drive continued above-market revenue growth, margin expansion, improved cash generation, and long-term shareholder value throughout the year," concluded Cuomo.
"Our first quarter results reflect meaningful progress across our key financial priorities," said Adam Cohn, Chief Financial Officer of VSE Corporation. "In connection with the acquisition of Precision Aviation Group, we completed follow-on equity and tangible equity unit offerings and a debt refinancing that enhanced our liquidity profile and financial flexibility. Pro forma for the acquisition, Adjusted Net Leverage(2) is now expected to be below 3.0x and to improve throughout the year, supported by continued Adjusted EBITDA growth and strong cash flow generation."
RECENT DEVELOPMENTS
•ACQUIRED PAG: On May 5, 2026, VSE acquired PAG from GenNx360 Capital Partners for $2.025 billion in cash and equity. The acquisition significantly expands VSE’s scale, increases its proprietary solutions content, and further strengthens its position as a mission-critical partner serving a diverse customer base across commercial, business and general aviation, rotorcraft, OEM, and defense markets. The business is expected to be immediately accretive to VSE's Adjusted EBITDA margin.
•ACQUIRED NORTHSTAR: On April 1, 2026, VSE acquired NorthStar, a provider of MRO, third-party logistics, and engine kitting services supporting the aftermarket. NorthStar delivers teardown, kitting, and other labor- and technically intensive services across multiple engine platforms. The acquisition enhances VSE’s position within OEM aftermarket supply chains, expands its service capabilities in business and general aviation, and provides strong demand visibility through an established backlog and customer integration. The business operates under a capital-light model and supports increasing demand for engine teardown and component-level services.
•COMPLETED FOLLOW-ON EQUITY AND TANGIBLE EQUITY UNIT OFFERINGS AND REFINANCING OF TERM LOAN A AND REVOLVER: In connection with the PAG acquisition, VSE completed follow-on equity and tangible equity unit offerings and entered into a credit agreement amendment providing for a new $900 million Term Loan B and an upsized $500 million revolving credit facility. The new Term Loan B refinanced and replaced the Company's existing Term Loan A. The new capital structure provides enhanced flexibility and scalability to support future growth, with an attractive interest rate, and extended maturity, strengthening VSE’s cash flow profile.
FIRST QUARTER RESULTS
The Company's revenue increased 27% year-over-year to a record $324.6 million in the first quarter of 2026. The year-over-year revenue increase was attributable to strong commercial engine end-market activity, the execution of previously awarded distribution agreements, new product introductions, new repair capabilities and capacity expansion, and contributions from recent acquisitions. Distribution and repair revenue increased 26% and 28%, respectively, in the first quarter of 2026, versus the prior-year period. The Company reported operating income of $32.7 million in the first quarter, compared to $24.5 million in the same period of 2025. Adjusted EBITDA(2) increased by 37% in the first quarter to $55.4 million, versus $40.4 million in the prior-year period. Adjusted EBITDA margin was 17.1%, an increase of approximately 130 basis points versus the prior-year period, driven primarily by greater mix of higher-margin product and repair activity, higher-margin OEM licensed manufacturing sales, and continued synergy realization from recent acquisitions.
FINANCIAL RESOURCES AND LIQUIDITY
As of March 31, 2026, the Company's total debt outstanding was $366.3 million and the Company's then-current $400.0 million revolving credit facility was undrawn. The Company had approximately $1.2 billion of cash and cash equivalents on hand, of which a majority was used to fund the PAG acquisition at closing on May 5.
UPDATED FULL YEAR 2026 CONSOLIDATED GUIDANCE
REVENUE
VSE is updating its full year 2026 revenue guidance to reflect the inclusion of PAG, which closed on May 5, 2026. The Company now expects full year revenue growth in the range of 57% to 61%, compared to its prior outlook of 19% to 23%. This increase is driven by the addition of PAG and reflects no change in expectations for VSE’s underlying business. The updated revenue guidance is presented net of intercompany eliminations.
ADJUSTED EBITDA MARGIN
VSE is also updating its full year 2026 Adjusted EBITDA margin outlook to reflect the addition of PAG. The Company now expects Adjusted EBITDA margin in the range of 18.1% to 18.5%, compared to its prior outlook of 16.8% to 17.3%. Consistent with the revenue update, this change is driven by the inclusion of PAG and does not reflect any change in expectations for the underlying business.
2 Non-GAAP measures. See additional information at the end of this release regarding non-GAAP financial measures.
FIRST QUARTER RESULTS
| Three months ended March 31, | ||||||||||||||||||||
| (in thousands, except per share data) | 2026 | 2025 | % Change | |||||||||||||||||
| Revenues | $ | 324,580 | $ | 256,045 | 26.8 | % | ||||||||||||||
| Operating income | $ | 32,748 | $ | 24,504 | 33.6 | % | ||||||||||||||
| Net income from continuing operations | $ | 29,055 | $ | 13,968 | 108.0 | % | ||||||||||||||
| EPS (Diluted) | $ | 1.04 | $ | 0.67 | 55.2 | % | ||||||||||||||
NON-GAAP MEASURES
In addition to the financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this earnings release also contains non-GAAP financial measures. These measures provide useful information to investors.
VSE considers Adjusted Net Income, Adjusted EPS (Diluted), EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Acquisition Adjusted EBITDA, TTM Adjusted EBITDA, TTM Acquisition Adjusted EBITDA, net debt, net leverage ratio, adjusted net leverage ratio, and free cash flow as non-GAAP financial measures and important indicators of performance and useful metrics for management and investors to evaluate VSE’s business' ongoing operating performance on a consistent basis across reporting periods. These non-GAAP financial measures, however, should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. Adjusted Net Income represents Net Income adjusted for acquisition-related costs, other discrete items, and related tax impact. Management believes these acquisition-related costs and other discrete items provide useful information about nonrecurring costs and benefits to help users meaningfully evaluate and compare the Company's quarterly and year-to-date performance against prior periods. Adjusted EPS (Diluted) is computed by dividing net income, adjusted for the discrete items as identified above and the related tax impacts, by the diluted weighted average number of common shares outstanding. EBITDA represents net income before interest expense, income taxes, amortization of intangible assets and depreciation and other amortization. Management believes EBITDA provides useful information about the Company's operating performance as it isolates non-cash depreciation and amortization charges as well as interest expense and income taxes, which are non-operating items. Adjusted EBITDA represents EBITDA (as defined above) adjusted for non-cash stock-based compensation and discrete items as identified above. Adjusted EBITDA margin represents estimated operating income before depreciation and amortization expenses as a percentage of revenue. Acquisition Adjusted EBITDA represents Adjusted EBITDA plus the pre-acquisition portion of EBITDA for the trailing twelve months. TTM Adjusted EBITDA represents Adjusted EBITDA as defined above for the trailing twelve months. TTM Acquisition Adjusted EBITDA includes pre-acquisition portion of EBITDA for the trailing twelve months that is not included in historical results. Net debt is defined as principal amount of debt less debt issuance costs and less cash and cash equivalents. Free cash flow represents operating cash flow less capital expenditures. Capital expenditures includes purchases of property and equipment. Net leverage ratio is calculated as net debt divided by TTM Adjusted EBITDA. Adjusted Net leverage ratio is calculated as net debt divided by TTM Acquisition Adjusted EBITDA.
Additionally, VSE Adjusted EBITDA margin is presented as a forward-looking non-GAAP financial measure based solely on information available to VSE as of the date of this earnings release and may differ materially from VSE’s actual operating results as a result of developments that occur after the date of this earnings release. The determination of the amounts that are excluded from this non-GAAP financial measure is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense, income amounts or anticipated synergies recognized in a given period. VSE is unable to present a quantitative reconciliation of forward-looking VSE Adjusted EBITDA to net income because certain information regarding the Company’s provision for income taxes is not available, and management cannot reliably predict all of the necessary components of net income at this time without unreasonable effort or expense. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The unavailable information could have significant impact on the Company’s future financial results. Reconciliations of these measures to the most directly comparable GAAP measures and other information relating to these non-GAAP measures is included in the supplemental schedules attached. These non-GAAP measures, however, have limitations as analytical tools and should not be considered in isolation or as a substitute for performance prepared in accordance with GAAP.
NON-GAAP FINANCIAL INFORMATION
Adjusted Net Income from Continuing Operations and Adjusted EPS
| Three months ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | ||||||||||||||||||||
| Net income from continuing operations | $ | 29,055 | $ | 13,968 | 108.0 | % | |||||||||||||||||
| Adjustments to income from continuing operations: | |||||||||||||||||||||||
Acquisition, integration and restructuring costs | 5,325 | 2,865 | 85.9 | % | |||||||||||||||||||
Divestiture-related restructuring costs | 68 | 63 | 7.9 | % | |||||||||||||||||||
| Interest income on note receivable | (694) | — | — | % | |||||||||||||||||||
| 33,754 | 16,896 | 99.8 | % | ||||||||||||||||||||
| Tax impact of adjusted items | (1,172) | (731) | 60.3 | % | |||||||||||||||||||
Adjusted net income from continuing operations | $ | 32,582 | $ | 16,165 | 101.6 | % | |||||||||||||||||
| Weighted average dilutive shares | 27,834 | 20,740 | 34.2 | % | |||||||||||||||||||
| GAAP EPS (Diluted) | $ | 1.04 | $ | 0.67 | 55.2 | % | |||||||||||||||||
| Adjusted EPS (Diluted) | $ | 1.17 | $ | 0.78 | 50.0 | % | |||||||||||||||||
EBITDA and Adjusted EBITDA
| Three months ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | ||||||||||||||||||||
| Net income from continuing operations | $ | 29,055 | $ | 13,968 | 108.0 | % | |||||||||||||||||
| Interest (income) expense, net | (1,402) | 7,939 | NM (1) | ||||||||||||||||||||
| Provision for income taxes | 5,095 | 2,597 | 96.2 | % | |||||||||||||||||||
| Amortization of intangible assets | 9,050 | 6,134 | 47.5 | % | |||||||||||||||||||
| Depreciation and other amortization | 3,697 | 3,040 | 21.6 | % | |||||||||||||||||||
| EBITDA | 45,495 | 33,678 | 35.1 | % | |||||||||||||||||||
Acquisition, integration and restructuring costs | 5,325 | 2,865 | 85.9 | % | |||||||||||||||||||
| Divestiture-related restructuring costs | 68 | 63 | 7.9 | % | |||||||||||||||||||
Stock-based compensation | 4,542 | 3,747 | 21.2 | % | |||||||||||||||||||
| Adjusted EBITDA | $ | 55,430 | $ | 40,353 | 37.4 | % | |||||||||||||||||
(1) Percentage change is not meaningful (NM). | |||||||||||||||||||||||
Free Cash Flow (1)
Three months ended | ||||||||||||||
| (in thousands) | March 31, 2026 | March 31, 2025 | ||||||||||||
| Net cash used in operating activities | $ | (62,264) | $ | (46,632) | ||||||||||
| Capital expenditures | (6,457) | (2,875) | ||||||||||||
| Free cash flow | $ | (68,721) | $ | (49,507) | ||||||||||
(1) Amounts include the results of both continuing and discontinued operations for the three months ended March 31, 2025. | ||||||||||||||
Net Debt
| (in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Principal amount of debt | $ | 366,342 | $ | 296,250 | |||||||
| Debt issuance costs | (5,367) | (3,446) | |||||||||
| Cash and cash equivalents | (1,239,407) | (69,358) | |||||||||
| Net Debt | $ | (878,432) | $ | 223,446 | |||||||
Net Leverage Ratio
| ($ in thousands) | March 31, 2026 | December 31, 2025 | |||||||||
| Net Debt | $ | (878,432) | $ | 223,446 | |||||||
TTM Adjusted EBITDA (1) | $ | 198,001 | $ | 182,924 | |||||||
Net Leverage Ratio (2) | NM | 1.2 | x | ||||||||
TTM Acquisition Adjusted EBITDA (3) | $ | 217,995 | $ | 209,128 | |||||||
Adjusted Net Leverage Ratio (2) | NM | 1.1 | x | ||||||||
| (1) TTM Adjusted EBITDA is defined as Adjusted EBITDA for the most recent twelve (12) month period. (2) Net Leverage Ratio and Adjusted Net Leverage Ratio as of March 31, 2026 are not meaningful due to cash and cash equivalents exceeding debt. (3) TTM Acquisition Adjusted EBITDA includes pre-acquisition portion of EBITDA for the trailing twelve months that is not included in historical results. | |||||||||||
CONFERENCE CALL
A conference call will be held Wednesday, May 6, 2026 at 8:30 A.M. ET to review the Company’s financial results, discuss recent events and conduct a question-and-answer session.
An audio webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of VSE’s website at https://ir.vsecorp.com. To listen to the live broadcast, go to the site at least 15 minutes prior to the scheduled start time to register, download and install any necessary audio software. A replay of the audio webcast will be available at the same location following the conclusion of the call.
ABOUT VSE CORPORATION
VSE is a leading provider of aviation distribution and repair services for the commercial and business and general aviation (B&GA) aftermarkets. Headquartered in Miramar, Florida, VSE is focused on significantly enhancing the productivity and longevity of its customers' high-value, business-critical assets. VSE’s aftermarket parts distribution and maintenance, repair, and overhaul (MRO) services support engine component and engine and airframe accessory part distribution and repair services for commercial and B&GA operators. For more detailed information, please visit VSE's website at www.vsecorp.com.
Please refer to the Form 10-Q that will be filed with the Securities and Exchange Commission ("SEC") on or prior to May 11, 2026 for more details on our first quarter 2026 results. Also, refer to VSE’s Annual Report on Form 10-K for the year ended December 31, 2025 for further information and analysis of VSE’s financial condition and results of operations. VSE encourages investors and others to review the detailed reporting and disclosures contained in VSE’s public filings for additional discussion about the status of 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.
FORWARD LOOKING STATEMENTS
This document contains statements that, to the extent they are not recitations of historical fact, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All such statements are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and this statement is included for purposes of such safe harbor provisions.
“Forward-looking” statements, as such term is defined by the Securities and Exchange Commission (the “SEC”) in its rules, regulations and releases, represent VSE’s expectations or beliefs, including, but not limited to, statements concerning the expected financial and other benefits of the acquisition of PAG, VSE’s operations, economic performance, financial condition, growth and acquisition strategies, investments and future operational plans. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “forecast,” “seek,” “plan,” “predict,” “project,” “could,” “estimate,” “might,” “continue,” “seeking” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements.
These statements speak only as of the date of this document and VSE undertakes no ongoing obligation, other than that imposed by law, to update these statements as a result of new information, future events or otherwise. These statements relate to, among other things, VSE’s future financial condition, results of operations or prospects; VSE’s business and growth strategies; and VSE’s financing plans and forecasts. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, certain of which are beyond VSE’s control, and that actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors, some of which are unknown, including, without limitation, risks related to:
•the performance of the aviation aftermarket;
•global economic and political conditions;
•supply chain delays and disruptions;
•competition from existing and new competitors;
•losses related to investments in inventory and facilities;
•interruptions in VSE’s operations;
•challenges related to workforce management or any failure to attract or retain a skilled workforce;
•VSE’s ability to realize the expected strategic benefits and cost synergies from the acquisition of PAG, after taking into account any business disruption, maintenance of customer, employee, or supplier relationships, management distraction during the integration process or other factors beyond VSE’s control;
•the accuracy of VSE’s assumptions related to the acquisition of PAG;
•the significant expenses that have been incurred and will be incurred in connection with acquisition of PAG;
•VSE’s ability to successfully integrate and achieve the strategic and other objectives, including any expected synergies, relating to recently completed acquisitions, including the acquisition of PAG;
•access to and the performance of third-party package delivery companies;
•prolonged periods of inflation and VSE’s ability to mitigate the impact thereof;
•future business conditions resulting in impairments;
•VSE’s ability to successfully divest businesses and to transition facilities in connection therewith;
•VSE’s work on large government programs;
•health epidemics, pandemics and similar outbreaks;
•compliance with government rules and regulations, including tariffs and environmental and pollution risk;
•VSE’s ability to mitigate the impacts of increased costs related to tariffs;
•litigation and legal actions arising from VSE’s operations;
•technology and cybersecurity threats and incidents;
•VSE’s outstanding indebtedness, including the increase in indebtedness upon completion of the acquisition of PAG;
•market volatility in the debt and equity capital markets;
•VSE’s ability to continue to pay dividends at current levels or at all;
•VSE’s published financial guidance;
•VSE’s preliminary financial estimates, which represent management’s current estimates and are subject to change;
•restrictions and limitations that may stem from financing arrangements VSE enters into or assumes in the future; and
•the other factors identified in VSE’s reports filed or expected to be filed with the SEC, including VSE’s Annual Report on Form 10-K for the year ended December 31, 2025.
You are advised, however, to consult any further disclosures VSE makes on related subjects in VSE’s periodic reports on Forms 10-K, 10-Q or 8-K filed with or furnished to the SEC.
INVESTOR CONTACT
Michael Perlman
VP, Investor Relations & Treasury
T: (954) 547-0480 M: (561) 281-0247
investors@vsecorp.com
VSE Corporation and Subsidiaries
Unaudited Consolidated Balance Sheets
(in thousands except share and per share amounts)
| March 31, | December 31, | |||||||||||||
| 2026 | 2025 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 1,239,407 | $ | 69,358 | ||||||||||
Receivables (net of allowance of $7.3 million and $7.2 million, respectively) | 216,504 | 190,732 | ||||||||||||
Contract assets | 45,723 | 41,468 | ||||||||||||
| Inventories | 625,737 | 553,834 | ||||||||||||
Prepaid expenses and other current assets | 33,569 | 37,937 | ||||||||||||
| Total current assets | 2,160,940 | 893,329 | ||||||||||||
Property and equipment (net of accumulated depreciation of $37.9 million and $34.2 million, respectively) | 93,821 | 91,098 | ||||||||||||
Intangible assets (net of accumulated amortization of $111.8 million and $100.2 million, respectively) | 318,809 | 295,962 | ||||||||||||
| Goodwill | 638,889 | 641,242 | ||||||||||||
| Operating lease right-of-use assets | 48,272 | 50,151 | ||||||||||||
Note receivable | 27,735 | 27,041 | ||||||||||||
| Other assets | 22,197 | 29,755 | ||||||||||||
| Total assets | $ | 3,310,663 | $ | 2,028,578 | ||||||||||
| Liabilities and Stockholders' equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Current portion of long-term debt | $ | 29,924 | $ | 7,500 | ||||||||||
| Accounts payable | 147,910 | 154,506 | ||||||||||||
| Accrued expenses and other current liabilities | 65,550 | 73,161 | ||||||||||||
| Dividends payable | 2,806 | 2,339 | ||||||||||||
| Total current liabilities | 246,190 | 237,506 | ||||||||||||
| Long-term debt, less current portion | 331,051 | 285,304 | ||||||||||||
| Deferred compensation | 4,613 | 5,918 | ||||||||||||
| Long-term operating lease obligations | 41,557 | 43,693 | ||||||||||||
| Deferred tax liabilities | 16,782 | 12,394 | ||||||||||||
| Other long-term liabilities | 4,254 | 4,955 | ||||||||||||
| Total liabilities | 644,447 | 589,770 | ||||||||||||
| Commitments and contingencies | ||||||||||||||
| Stockholders' equity: | ||||||||||||||
Common stock, par value $0.05 per share, authorized 44,000,000 shares; issued and outstanding 28,055,592 and 23,398,046, respectively | 1,403 | 1,170 | ||||||||||||
| Additional paid-in capital | 2,241,751 | 1,041,483 | ||||||||||||
| Retained earnings | 421,891 | 395,643 | ||||||||||||
| Accumulated other comprehensive income | 1,171 | 512 | ||||||||||||
| Total stockholders' equity | 2,666,216 | 1,438,808 | ||||||||||||
| Total liabilities and stockholders' equity | $ | 3,310,663 | $ | 2,028,578 | ||||||||||
VSE Corporation and Subsidiaries
Unaudited Consolidated Statements of Operations
(in thousands except share and per share amounts)
| For the three months ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Revenues: | ||||||||||||||
| Products | $ | 202,350 | $ | 160,551 | ||||||||||
| Services | 122,230 | 95,494 | ||||||||||||
| Total revenues | 324,580 | 256,045 | ||||||||||||
| Costs and operating expenses: | ||||||||||||||
| Products | 164,292 | 136,867 | ||||||||||||
| Services | 112,289 | 86,229 | ||||||||||||
| Selling, general and administrative expenses | 6,201 | 2,311 | ||||||||||||
| Amortization of intangible assets | 9,050 | 6,134 | ||||||||||||
| Total costs and operating expenses | 291,832 | 231,541 | ||||||||||||
| Operating income | 32,748 | 24,504 | ||||||||||||
| Interest (income) expense, net | (1,402) | 7,939 | ||||||||||||
| Income from continuing operations before income taxes | 34,150 | 16,565 | ||||||||||||
| Provision for income taxes | 5,095 | 2,597 | ||||||||||||
| Net income from continuing operations | 29,055 | 13,968 | ||||||||||||
| Loss from discontinued operations, net of tax | — | (22,941) | ||||||||||||
| Net income (loss) | $ | 29,055 | $ | (8,973) | ||||||||||
| Earnings (loss) per share: | ||||||||||||||
| Basic | ||||||||||||||
| Continuing operations | $ | 1.06 | $ | 0.68 | ||||||||||
| Discontinued operations | — | (1.11) | ||||||||||||
| $ | 1.06 | $ | (0.43) | |||||||||||
| Diluted | ||||||||||||||
| Continuing operations | $ | 1.04 | $ | 0.67 | ||||||||||
| Discontinued operations | — | (1.11) | ||||||||||||
| $ | 1.04 | $ | (0.44) | |||||||||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 27,497,210 | 20,617,949 | ||||||||||||
| Diluted | 27,834,475 | 20,740,319 | ||||||||||||
| Dividends declared per share | $ | 0.10 | $ | 0.10 | ||||||||||
VSE Corporation and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
(in thousands)
| For the three months ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
(a) | ||||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income (loss) | $ | 29,055 | $ | (8,973) | ||||||||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||
| Depreciation and amortization | 12,747 | 9,905 | ||||||||||||
| Amortization of debt issuance cost | 440 | 332 | ||||||||||||
| Deferred taxes | 5,415 | (5,764) | ||||||||||||
| Stock-based compensation | 4,581 | 3,522 | ||||||||||||
| Impairment and loss on sale of business segments | — | 33,952 | ||||||||||||
| Loss on sale of property and equipment | 3 | 10 | ||||||||||||
| Gain on settlement of corporate-owned life insurance | (357) | — | ||||||||||||
| Interest income on note receivable | (694) | — | ||||||||||||
| Changes in operating assets and liabilities, net of impact of acquisitions: | ||||||||||||||
| Receivables | (25,772) | (19,393) | ||||||||||||
| Contract assets | (4,755) | (920) | ||||||||||||
| Inventories | (71,544) | (6,359) | ||||||||||||
| Prepaid expenses and other current assets and other assets | 515 | (29,910) | ||||||||||||
| Operating lease assets and liabilities, net | 396 | 372 | ||||||||||||
| Accounts payable and deferred compensation | (10,847) | (10,892) | ||||||||||||
| Accrued expenses and other liabilities | (1,447) | (12,514) | ||||||||||||
| Net cash used in operating activities | (62,264) | (46,632) | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Purchases of property and equipment | (6,457) | (2,875) | ||||||||||||
| Proceeds from the sale of business segments, net of cash divested | — | 2,746 | ||||||||||||
| Cash paid for acquisitions, net of cash acquired | (5,391) | — | ||||||||||||
| Purchases of intangible assets | (16,000) | — | ||||||||||||
| Proceeds from corporate owned life insurance settlements | 760 | — | ||||||||||||
| Net cash used in investing activities | (27,088) | (129) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
Borrowings on bank credit facilities | 47,273 | 74,489 | ||||||||||||
Repayments on bank credit facilities | (49,148) | (39,989) | ||||||||||||
| Proceeds from issuance of common stock, net | 829,457 | — | ||||||||||||
| Proceeds from issuance of tangible equity units, net | 445,386 | — | ||||||||||||
| Payment of debt financing costs | (1,313) | — | ||||||||||||
| Payment of taxes for equity transactions | (8,930) | (4,201) | ||||||||||||
| Dividends paid | (2,340) | (2,060) | ||||||||||||
| Other | (984) | — | ||||||||||||
| Net cash provided by financing activities | 1,259,401 | 28,239 | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | 1,170,049 | (18,522) | ||||||||||||
| Cash and cash equivalents, beginning of period | 69,358 | 29,030 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 1,239,407 | $ | 10,508 | ||||||||||
(a) The cash flows related to discontinued operations and held-for-sale assets and liabilities have not been segregated, and remain included in the major classes of assets and liabilities. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. | ||||||||||||||
FAQ
How did VSE (VSEC) perform financially in the first quarter of 2026?
VSE delivered strong growth in Q1 2026. Revenue reached $324.6 million, up 26.8%, with GAAP net income from continuing operations of $29.1 million, up 108.0%. Diluted EPS from continuing operations was $1.04, and Adjusted EBITDA grew 37.4% to $55.4 million.
What acquisitions did VSE (VSEC) complete around the first quarter of 2026?
VSE completed two aviation-focused acquisitions. It bought NorthStar Technologies on April 1, 2026, expanding engine MRO and logistics services. On May 5, 2026, it acquired Precision Aviation Group for $2.025 billion in cash and equity, significantly broadening global repair capabilities and customer reach.
How did VSE (VSEC) change its full year 2026 guidance after acquiring PAG?
Following the Precision Aviation Group acquisition, VSE raised its 2026 outlook. It now expects revenue growth of 57% to 61%, versus a prior 19% to 23%, and Adjusted EBITDA margin of 18.1% to 18.5%, versus 16.8% to 17.3%, while keeping its underlying business expectations unchanged.
What is VSE’s (VSEC) liquidity and leverage position as of March 31, 2026?
At March 31, 2026, VSE held $1.239 billion in cash and cash equivalents and had $366.3 million of total debt. Net debt was negative, reflecting cash exceeding borrowings. Management expects pro forma Adjusted Net Leverage below 3.0x after the PAG acquisition and to improve with EBITDA growth.
How did VSE’s (VSEC) margins and profitability metrics trend in Q1 2026?
Profitability improved meaningfully in Q1 2026. Operating income rose 33.6% to $32.7 million, and Adjusted EBITDA margin increased to 17.1%, about 130 basis points higher than 2025, helped by a richer mix of higher-margin distribution and repair work and acquisition synergies.
What was VSE’s (VSEC) free cash flow in the first quarter of 2026 and why?
VSE reported free cash flow of $(68.7) million in Q1 2026, combining net cash used in operating activities of $(62.3) million and $6.5 million of capital expenditures. The outflow reflected working capital investments, inventory growth, and continued capital spending to support expansion.