VSE Investor Overview & 10-Year Retrospective FY 2014 - - PowerPoint PPT Presentation

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VSE Investor Overview & 10-Year Retrospective FY 2014 - - PowerPoint PPT Presentation

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VSE Investor Overview & 10-Year Retrospective FY 2014 Christine Kaineg, VSE Investor Relations 703-329-3263 or crkaineg@vsecorp.com 1 Lines of Business Logistics Service life extension and performance enhancement of aging mission critical

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VSE Investor Overview

& 10-Year Retrospective

FY 2014

Christine Kaineg, VSE Investor Relations 703-329-3263 or crkaineg@vsecorp.com

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Lines of Business

Logistics

Service life extension and performance enhancement of aging mission critical fleets, including vehicles, ships and aircraft on commercial and federal markets.

Supply Chain Management

(~70% of Revenue)

  • Total life cycle end‐to‐end product

movement including complete logistics visibility and asset tracking. Warehouse management with extensive facilities expertise and large scale inventory control procedures.

Maintenance, Repair and Overhaul (~20% of Revenue)

  • One of the nation's leading providers of

maintenance, reset, overhaul and modernization support, ensuring land, sea and air systems are capable of performing their operational missions throughout their lifecycle.

Energy, IT & Management Consulting Services (~10% of Revenue)

Professional competencies in strategic planning, clean energy solutions, policy analysis, performance metrics, project management, enterprise architecture, data mining, public protection/security, and technical and software engineering

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Market Segment Overview

Supply Chain Management

  • Logistics
  • Field Support
  • Warehouse

Management

  • Program

Management

  • Demand Forecasting
  • Source/Procurement
  • Customer Inventory

Management Aviation Services

  • Logistics
  • Maintenance, Repair

and Overhaul

  • Parts Supply
  • Warehouse

Management Federal Services

  • Logistics
  • Sustainment
  • Engineering
  • Platform

Modernization

  • Research &

Development

  • Program

Management

  • Foreign Military Sales

(FMS)

  • Reverse Engineering

IT and Consulting Services

  • IT Services
  • Management

Consulting

  • Process Improvement
  • Medical Logistics
  • Energy and

Environment Consulting Services

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Diverse Groups & Subsidiaries

Federal Services Group

Maintenance, Repair and Overhaul, Equipment and Vehicle Repair/Reset; Foreign Military Sales; Ship Transfer, Modernization and Repair; Aircraft Maintenance, Corrosion Control; Engineering; Advanced Technologies; Transportation Coordination; Procurement/Sourcing; Warehouse Management; Government Seized and Forfeited Property; Munitions & Ordnance Engineering; Facility Decontamination; Prognostics/Diagnostics

Energetics

Grid Modernization, Energy Efficiency, Clean Energy, Energy Policy, and Infrastructure Protection and Resilience

VSE Aviation, Inc.

Maintenance, repair and overhaul and parts supply for corporate and regional jet aircraft engines and engine

  • accessories. Includes Prime Turbines, CT

Aerospace, Kansas Aviation and Air Parts & Supply Co.

Wheeler Bros., Inc.

Supply Chain Management, Procurement Legacy System Repair Parts; Reverse Engineering; Material Planning and Sourcing; Logistics Visibility and Asset Tracking; Warehouse Management

Akimeka

Information Technology Services and Solutions– Medical Logistics; Medical Command & Control; E‐health; Information Assurance; Recovery Case; Public Safety; Web‐Based Technologies; Enterprise Architecture; Data Migration, Management Mining and Warehousing

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EPS growing from $1.29 to $3.61 CAGR = 10.8%

VSE 10-Year Financial Data

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2005 – 2014 CAGRs: Revenue CAGR = 4.2% Net Income CAGR = 12.1% Shareholders Equity CAGR = 23.3%

VSE Trajectory 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Revenue ($M) $280.1 $364.0 $603.2 $937.4 $974.2 $811.0 $580.8 $546.8 $471.6 $424.1 Net Income ($M) $6.2 $7.8 $14.1 $19.0 $24.0 $23.7 $20.5 $21.3 $22.8 $19.4 Net Margin 2.2% 2.1% 2.3% 2.0% 2.5% 2.9% 3.5% 3.9% 4.8% 4.6% Shareholders' Equity (BOY) $23M $30M $38M $56M $76M $101M $124M $144M $164M $187M VSE Return on Equity (ROE) 26.8% 25.8% 36.9% 33.8% 31.6% 23.4% 16.6% 14.8% 13.9% 10.4% Long Term Debt ($M) $0M $0M $0M $0M $0M $11M $145M $116M $65M $23M Split adjusted Earnings Per Share $1.33 $1.64 $2.85 $3.75 $4.68 $4.56 $3.93 $4.03 $4.29 $3.62 Diluted Earnings Per Share $1.29 $1.61 $2.82 $3.74 $4.67 $4.53 $3.90 $4.01 $4.28 $3.61 Dividends $0.115 $0.135 $0.155 $0.175 $0.195 $0.23 $0.27 $0.31 $0.35 $0.39

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$280.1 $364.0 $603.2 $937.4 $974.2 $811.0 $580.8 $546.8 $471.6 $424.1

$200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 $1,000.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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Mergers, Divestitures & Acquisitions

Acquired Acquired Acquired Divested Acquired

  • Jan. 2015

Acquired Merged

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Debt (End of Year)

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Enterprise Value

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Shareholders’ Equity

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VSE Snapshot

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Chart depicts split adjusted annual dividends per share

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$280.1 $364.0 $603.2 $937.4 $974.2 $811.0 $580.8 $546.8 $471.6 $424.1

$200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0 $1,000.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

11 Won Iraq/Afghanistan War Support Contracts (CECOM R2 and Tanker Coating)

Revenue & Key Events Timeline

Iraq/Afghanistan War support contract bookings reach nearly $1B (CECOM R2)

U.S. enters recession leading to financial & budget crisis . Withdrawal from middle east begins to accelerate. Acquisition of WBI (June 2011) Acquisition of VSE Aviation, Inc. (Jan 2015) Acquisition of Akimeka, LLC (Aug 2010) Acquisition of ICRC (June 2007) Acquisition of G&B (2008)

2005-2014 Revenue CAGR = 4.2% NASDAQ CAGR: 8.07%

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Revenue & Profit by Lines of Business

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Revenue Profit by Capability

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2014 Financial Summary

Source: 2014 VSE Annual Report

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2014 Financial Summary

Source: 2014 VSE Annual Report All per share data has been adjusted for stock splits

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2014 Financial Summary

Source: 2014 VSE Annual Report All per share data has been adjusted for stock splits

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2014 Financial Summary

Source: 2014 VSE Annual Report ROE is calculated as Net Income divided by Beginning of Year Shareholders Equity All per share data has been adjusted for stock splits

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VSE Corporation Proprietary Information

“Proud of Our Past. Excited About the Future.”

VSE Investor Relations: Christine Kaineg 6348 Walker Lane Alexandria, Virginia 22310 Phone: (703) 329-3263 Email: crkaineg@vsecorp.com

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Summary Income Statement

In thousands, except share and per share amounts

FY 2014 FY 2013

For years ending December 31 $ $ Revenues 424,071 471,638 Contract Costs 383,001 424,250 Selling, General and Administrative 4,140 3,285 Gross Profit 41,070 47,388 32,947 38,314 Net Income 19,365 Interest Expense Income (net) 3,983 5,789 22,852 Income Before Taxes Basic Earnings Per Share 3.62 4.29 Diluted Earnings Per Share 3.61 4.28 Discontinued Operations ‐ ‐

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Summary Balance Sheet

In thousands, except share and per share amounts

164,261 29,141 186,803 Total Liabilities and Stockholders' Equity 355,330 380,529 Goodwill and Intangibles (net) TOTAL LIABILITY & EQUITY FY 2014 FY 2013 STOCKHOLDERS' EQUITY FY 2014 FY 2013 $ $ $ $ Total Stockholders' Equity 205,489 Total Liabilities 149,841 193,726 Long Term Lease Obligations 24,584 25,721 52,669 56,418 Bank Debt 23,563 64,487 LIABILITIES FY 2014 FY 2013 $ $ 49,363 39,315 Total Assets 355,330 380,529 52,911 57,738 Inventories Receivables (net) 59,391 78,387 Cash and Cash Equivalents 263 220 ASSETS FY 2014 FY 2013 $ $ Property and Equipment (net) Other Accounts Payable & Accrued Expenses Other 49,025 25,061 174,309 30,560

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Selected Quarterly Data

In thousands, except share and per share amounts

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Stock Trends

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Year End Stock Price & Annual Range

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2005-2014 STOCK PRICE CAGR = 12.1 % NASDAQ CAGR: 8.07% Chart shows annual high/low stock price range All per share data has been adjusted for stock splits

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CEO, President, and COO

M.A. Gauthier

IT, Energy & Management Consulting Segment

Energetics

  • N. Margolis

Akimeka

  • J. T. Harris

CFO T.R. Loftus Executive Vice President Contracts & Procurement C.R. Douglas Vice President Human Resources

  • T. Bailey

Vice President General Counsel Corporate Secretary

  • T. M. Kiernan

Vice President

Operational Structure (Corporate Level)

Federal Services Group J.R. Brown

Includes: Global Maritime Services J.R. Brown ELD/SED: J.M. Coritz FSS/CED: J.C. Pettit VSE International Corp. H.W. Jones

Supply Chain Segment

Wheeler Bros., Inc.

  • C. Wheeler

VSE Aviation, Inc.

  • P. Goffredi

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2.2% 2.1% 2.3% 2.0% 2.5% 2.9% 3.5% 3.9% 4.8% 4.6% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Net Margin

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2005-2014 NET MARGIN CAGR = 7.6%

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P/E Range w/ Year End P/E

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 High P/E 15.91 15.80 23.86 13.24 10.46 11.77 8.44 6.73 12.17 20.70 Low P/E 7.94 6.08 11.68 6.05 4.16 5.84 5.35 5.18 5.17 11.33 Year End P/E Ratio 15.85 10.31 17.15 10.45 9.62 7.23 6.18 6.27 11.20 18.22 15.85 10.31 17.15 10.45 9.62 7.23 6.18 6.27 11.20 18.22 0.00 5.00 10.00 15.00 20.00 25.00 30.00

All per share data has been adjusted for stock splits