VSEC

Let’s dig into the relative performance of VSE Corporation (NASDAQ:VSEC) and its peers as we unravel the now-completed Q2 maintenance and repair distributors earnings season. Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Maintenance and repair distributors that boast reliable selection and quickly deliver products to customers can benefit from this theme. While e-commerce hasn’t disrupted industrial distribution as much as consumer retail, it is still a real threat, forcing investment in omnichannel capabilities to serve customers everywhere. Additionally, maintenance and repair distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand. The 9 maintenance and repair distributors stocks we track reported an exceptional Q2. As a group, revenues beat analysts’ consensus estimates by 4%. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ:VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets. VSE Corporation reported revenues of $449.1 million, up 65% year on year. This print exceeded analysts’ expectations by 4.8%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates. VSE Corporation pulled off the fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 8.9% since reporting and currently trades at $196.50. We think VSE Corporation is a good business, but is it a buy today? Read our full report here, it’s free. Serving the pharmaceutical, industrial manufacturing, energy, and chemical process industries, Transcat (NASDAQ:TRNS) provides measurement instruments and supplies. Transcat reported revenues of $92.95 million, up 21.6% year on year, outperforming analysts’ expectations by 7.4%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates. Transcat achieved the biggest analyst estimate beat in the group. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 6.9% since reporting. It currently trades at $85.56. Is now the time to buy Transcat? Access our full analysis of the earnings results here, it’s free. Founded in 1967, Fastenal (NASDAQ:FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally. Fastenal reported revenues of $2.39 billion, up 14.7% year on year, exceeding analysts’ expectations by 1.9%. It may have had the worst quarter among its peers, but its results were still good as it also locked in EPS in line with analysts’ estimates. Interestingly, the stock is up 1.8% since the results and currently trades at $47.90. Read our full analysis of Fastenal’s results here. Founded as a supplier of motors, W.W. Grainger (NYSE:GWW) provides maintenance, repair, and operating (MRO) supplies and services to businesses and institutions. W.W. Grainger reported revenues of $5.02 billion, up 10.3% year on year. This result beat analysts’ expectations by 1.2%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ organic revenue estimates and full-year EPS guidance beating analysts’ expectations. W.W. Grainger had the weakest performance against analyst estimates among its peers. The stock is down 6.4% since reporting and currently trades at $1,284. Read our full, actionable report on W.W. Grainger here, it’s free. Founded in NYC’s Little Italy, MSC Industrial Direct (NYSE:MSM) provides industrial supplies and equipment, offering vast and reliable selection for customers such as contractors MSC Industrial reported revenues of $1.05 billion, up 7.8% year on year. This print surpassed analysts’ expectations by 1.6%. It was a very strong quarter as it also put up a beat of analysts’ EPS estimates. The stock is down 2.1% since reporting and currently trades at $116.47. Read our full, actionable report on MSC Industrial here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

VSE Corporation’s second quarter results were well received by the market, reflecting significantly stronger performance than anticipated by analysts. Management attributed this outperformance to a combination of organic growth across both aviation repair and distribution businesses, as well as early contributions from two recently completed acquisitions. CEO John Cuomo cited the integration of PAG and NorthStar as central to the company’s evolving platform, emphasizing that “the strength of the platform is already evident in our financial performance.” Cuomo highlighted that both new business wins and expanded capabilities in the engine aftermarket were key to driving record revenue and profitability in the quarter. Is now the time to buy VSEC? Find out in our full research report (it’s free). Revenue: $449.1 million vs analyst estimates of $428.5 million (65% year-on-year growth, 4.8% beat) Adjusted EPS: $1.75 vs analyst estimates of $0.93 (87.5% beat) Adjusted EBITDA: $86.02 million vs analyst estimates of $77.28 million (19.2% margin, 11.3% beat) Operating Margin: 10.9%, up from 8.3% in the same quarter last year Market Capitalization: $6.79 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Kenneth Herbert (RBC Capital Markets) pressed for clarity on what underpinned the raised revenue outlook. CEO John Cuomo explained it was “more the core business confidence than anything,” with both acquisitions and legacy operations performing well. Sheila Kahyaoglu (Jefferies) asked how much of margin expansion was attributed to integration synergies versus core improvement. Cuomo clarified that synergy realization would be more visible next year, and recent margin gains were primarily from core operations. Louie Dipalma (William Blair) questioned the drivers of organic growth acceleration despite flat industry travel volumes. Cuomo broke down growth as stemming from price, volume, new contract wins, and strength in both commercial and general aviation, especially engine-related offerings. Kristine Liwag (Morgan Stanley) sought details on free cash flow conversion and inventory risk. CFO Adam Cohn responded that distribution drove most inventory build, but strict policies and a focus on core platforms minimized obsolescence risk. Louis Raffetto (Wells Fargo) asked about lessons from PAG’s repair-distribution model. Cuomo highlighted opportunities in tying MRO shops closely with exchange pools and leveraging alternative sourcing to address supply chain gaps. In the coming quarters, our team will be watching (1) the pace and impact of integration and synergy realization from recent acquisitions, (2) progress in expanding MRO capacity and throughput for engine aftermarket services, and (3) improvements in free cash flow conversion as working capital needs moderate. Advances in proprietary solution offerings and successful execution on new distribution programs will also be key indicators of sustainable growth. VSE Corporation currently trades at $241.47, up from $215.75 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 5:00 p.m. ET President and Chief Executive Officer - John Cuomo Chief Financial Officer - Adam Cohn Vice President, Investor Relations and Treasury - Michael Perlman Need a quote from a Motley Fool analyst? Email [email protected] Operator: Good day, and thank you for standing by. Welcome to the VSE Corporation's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michael Perlman. Please go ahead. Michael Perlman: Thank you. Welcome to VSE Corporation's Second Quarter 2026 Results Conference Call. We will begin with remarks from John Cuomo, President and CEO; followed by a financial update from Adam Cohn, our Chief Financial Officer. The presentation we are sharing today is on our website, and we encourage you to follow along accordingly. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including those described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward-looking statements. We are using non-GAAP financial measures in our presentation. Where available, the appropriate GAAP financial reconciliations are incorporated into our presentation and posted on our website. All percentages in today's discussion refer to year-over-year progress, except where noted. Before we begin, I'd like to highlight that VSE will host an Investor Day on Wednesday, December 9, at current Tier 59 in New York City. We look forward to sharing more on our strategy and long-term outlook there. State and the date invitations will be sent out later this month with full details follow in September. At the conclusion of our prepared remarks, we will open the line for questions. With that, I'd like to turn the call over to John. John Cuomo: Good morning, everyone, and thank you for joining us today. Let's begin on Slide 3, where I will review our second quarter highlights. The second quarter marked a defining step forward for VSE. We closed 2 strategic acquisitions, delivered record revenue and profitability, including a record consolidated adjusted EBITDA margin and launched integration and synergy capture work streams across the combined platform. Importantly, the quarter demonstrated the underlying strength of our core business and the earnings power of the platform we're building. Let me now walk through our second quarter highlights. First, we completed the acquisition of PAG, the largest transaction of VSE's history and a major milestone in our transformation. Together, PAG, NorthStar and our legacy VSE Aviation businesses create a differentiated global aviation aftermarket platform with greater scale, broader capabilities and deeper customer relevance. We are advancing our strategy to become the world's leading independent provider of aviation aftermarket distribution and repair services while remaining firmly grounded in the OEM-centric strategy that has guided our transformation. Second, the strength of the platform is already evident in our financial performance and progress. We delivered record revenue and profitability in the second quarter, which results above prior expectations. Organic revenue grew approximately 14%, with strength across both repair and distribution, supported by strength in the commercial engine aftermarket, new business wins, expanded capabilities, market share gain and increased share of wallet. Adjusted EBITDA nearly doubled year-over-year, significantly outpacing revenue growth and adjusted EBITDA margins reached a record 19.2% in the quarter. This performance represents a meaningful progress towards our long-term objective of consolidated adjusted EBITDA margins above 20% and supports our decision to raise both revenue and margin guidance for the full year. Finally, integration, execution and synergy capture are underway. We have established clear business plans, integration governance and executive owned work streams across the combined platform. Integration is a core VSE capability and an important competitive differentiator. In the short time since closing, our teams have already begun advancing tangible opportunities in-sourcing joint sales, sales channel alignment and operating efficiency. It remains early but the pace of execution and the quality of the opportunities identified reinforced our confidence in the revenue synergy and margin expansion potential of the combined platform. Let's now move to Slide 4, where I will highlight our recent acquisitions in greater detail. Let me start with the acquisition of PAG, which we closed on May 5. We completed the acquisition from GenX 360 Capital Partners in a transaction valued at approximately $2 billion in cash and equity. The acquisition materially expands VSE scale, global reach, proprietary content and repair capabilities across commercial, business, general aviation, rotorcraft, OEM and defense end markets. We recently hosted our first employee Connection Summit, bringing together leaders from VSE and PAG to accelerate integration planning and commercial collaboration. The team is aligned on sales channel strategy, systems priorities, insourcing and joint commercial opportunities. Execution is now underway across these work streams. While we are still early in the integration, we are encouraged by both the breadth of the opportunities identified and the engagement of the combined teams. Just as important, PAG brings an exceptional team, highly complementary capabilities and a strong customer-focused culture. This combination is strengthening VSE strategically, operationally and commercially. Moving now to our NorthStar acquisition, which closed on April 1. This acquisition adds engine-related MRO, third-party logistics and component support capabilities to our aftermarket offering. NorthStar's teardown kitting and component level capabilities span multiple engine platforms and deepen our role within the OEM aftermarket supply chains. Since completing the acquisition, we have already rebranded the businesses via Aviation Services, aligned its leadership structure and launched key integration initiatives to expand logistics, repair capacity and engine component support. With that, let me provide an update on the current aviation aftermarket environment. Overall, the fundamentals supporting our business remain healthy and continue to reinforce our confidence in the long-term demand environment. The broader macroeconomic and geopolitical environment remains dynamic including volatility in energy prices. We continue to monitor these conditions closely and remain disciplined in our planning. Our updated guidance reflects what we are seeing in the business today, strong first step execution, healthy customer demand and solid program visibility. To date, we have not seen any recent uncertainty translates into any meaningful change in customer demand or operator behavior. Customer activity remains healthy across our platform and the demand signals we see support confidence in the durability of our business. At the same time, we will continue to stay close to our customers and respond quickly if market conditions should change. Global air traffic and fleet utilization remained resilient, an aging installed base, continued constraints on new aircraft and engine availability and the need to keep existing assets operating or sustaining demand for aftermarket parts and repair services. These are durable demand drivers across our platform. In Business and General Aviation, conditions also remain unchanged. The diversity of this customer base and the mission-critical nature support the aftermarket demand. This market provides an important and complementary source of revenue alongside the strength we continue to see in commercial aviation. Taken together, the breadth of our markets, customers, capabilities and revenue streams give us confidence in the resilience of our business as we enter the second half. We remain optimistic about the opportunity ahead while maintaining discipline around execution and external risk. Let's now turn to Slide 5, where I'll briefly walk through our second quarter 2026 financial highlights. We delivered an outstanding quarter headlined by record revenue and profitability. The results reflect strong execution in our core aviation businesses, continued organic momentum and contributions from our recent acquisitions. Our revenue of $449 million increased 65% year-over-year, including 14% organic growth. Revenue growth was driven by new business wins, expanded product and repair capabilities, market share gains, increased share of wallet and contributions from recent acquisitions. Adjusted EBITDA reached a record $86 million in the quarter, increasing 98% year-over-year and significantly outpacing revenue growth. Adjusted EBITDA margin expanded approximately 320 basis points to a record 19.2% in the quarter. The result reflects favorable product and repair mix, strong operating execution, synergies from prior acquisitions and contributions from PAG. The level of profitability exceeded our expectations for the quarter and demonstrates the earning power of the platform, although quarterly mix and timing can create variability from period to period. Adjusted net income of $55 million increased 101% while adjusted diluted earnings per share of $1.75 increased 33% year-over-year. Our record profitability reinforces our confidence in the long-term earnings potential of VSE and our path toward consolidated adjusted EBITDA margins above 20% over time. I'll now turn the call over to Adam to walk through the financial details. Adam Cohn: Thank you, John. Let's turn to Slide 6 of the conference call materials where I will provide a detailed overview of our second quarter consolidated financial results. For the second quarter of 2026, we generated $449 million of revenue, an increase of 65% year-over-year. Both MRO and distribution delivered strong results with MRO revenue increasing 149% and distribution revenue increasing 17% year-over-year. The 149% increase in MRO revenue was driven by expanded repair capabilities and capacity, strong growth in engine content, market share gains, increased share of wallet with existing OEM partners and contributions from recent acquisitions, primarily PAG and Aero 3. The 17% increase in distribution revenue was driven by solid execution on new business wins, product line expansion, market share gains, strong commercial engine end market demand and contributions from the Aero 3 acquisition. Excluding recent acquisitions, organic revenue increased approximately 14% year-over-year, reflecting strong underlying demand and execution across the business. This growth rate is net of intercompany eliminations between VSE and PAG since the May 5 closing. Consolidated adjusted EBITDA increased 98% to $86 million. Adjusted EBITDA margin was 19.2%, an increase of approximately 320 basis points from the prior year period. The expansion was driven primarily by a greater mix of higher-margin products and repair activity, synergies from previously completed acquisitions and contributions from PAG. Adjusted net income was $55 million and adjusted diluted earnings per share was $1.75 per share. For the current and prior year periods, adjusted net income and adjusted diluted earnings per share have been updated to exclude amortization of intangible assets and stock-based compensation. Turning to Slide 7 and our balance sheet. During the quarter, we closed on a $900 million term loan B and upsized our revolving credit facility to $500 million. These new facilities replaced our prior term loan A and revolver structure. And together, they strengthen our balance sheet and give us the flexibility to execute against our strategic priorities. At the end of the second quarter, total debt outstanding was $967 million, including our new term loan B and the debt portion of the tangible equity units. Debt issuance costs were approximately $20 million, and we had approximately $75 million of cash and cash equivalents on hand, resulting in a net debt of approximately $872 million. We had no borrowings under our recently upside $500 million revolving credit facility. During the second quarter, we generated approximately $19 million of free cash flow, a significant improvement from the first quarter and from the second quarter of last year. The improvements were driven by strong profitability, better working capital performance and a continued shift in portfolio mix towards MRO. Second quarter free cash flow was also absorbed by approximately $10 million of PAG related cash transaction expenses. Excluding those expenses, free cash flow conversion was approximately 34% of adjusted EBITDA. We expect cash generation to strengthen in the second half as earnings grow integration progresses and working capital investments begin to scale. At quarter end, our adjusted net leverage ratio was 2.4x, stronger than the pro forma guidance we outlined at the time of the PAG closing. We expect leverage to continue to improve in the second half of the year, supported by stronger free cash flow generation. This will increase our financial flexibility as we execute integration priorities and maintain a disciplined approach to capital allocation. Let's now turn to Slide 8 to review our updated consolidated company guidance for full year 2026, starting with revenue. Based on the strength of our first half execution, continued double-digit organic growth and increasing visibility into customer demand and program activity, we are raising our full year 2026 revenue guidance. We now expect full year revenue growth of 61% to 64%, up from our prior outlook of 57% to 61%. We are also increasing our full year 2026 adjusted EBITDA margin outlook, reflecting record first half profitability, continued operating execution and the early benefits from our recent acquisitions. We now expect full year adjusted EBITDA margin of 18.7% to 19% compared with prior outlook of 18.1% to 18.5%. On free cash flow, inclusive of PAG, we expect meaningful improvement in the second half driven by earnings growth, lower transaction-related cash costs and improved working capital efficiency as investments in programs scale. Stronger cash generation remains an important priority and is expected to support continued deleveraging. I would now like to provide an update on several additional modeling assumptions post PAG acquisition, which are also detailed in the appendix of the presentation. For full year 2026, interest expense net of interest income is projected at approximately $36 million to $39 million. Depreciation and amortization is expected to be approximately $96 million to $100 million in aggregate. The effective tax rate is projected at approximately 25%. Stock-based compensation is expected to be approximately $18 million to $19 million. And capital expenditures are expected to be approximately 2% to 2.5% of revenue. With that, I'll turn the call back over to John. John Cuomo: Thanks, Adam. I'd like to conclude by briefly reviewing our 2026 priorities on Slide 9. First, we are focused on executing acquisition integration and accelerating the realization of synergies. . Second, we are implementing newly awarded distribution programs across our core platforms. The recently launched Pratt & Whitney Canada APU agreement ramped ahead of our expectations in the second quarter. We are also advancing our CFM engine initiatives. We took delivery of 7 CFM 56 engines during the quarter and began processing those assets through our in-house repair and tear down operations. Third, we are expanding our MRO capacity and technical capabilities to capture incremental demand specifically across the engine aftermarket. Fourth, we are advancing and converting our organic pipeline into revenue and margin contribution. Fifth, we are continuing to enhance our systems and our processes to support scale, integration and efficient growth including the targeted use of AI and data dripping tools to improve operational efficiency, optimize workflows and support decision-making across the platform. And finally, with the PAG acquisition now closed, we are advancing integration across sales channels, in-sourcing, systems, organizational alignment and joint commercial opportunities. We are confident in the combined strength of the platform and see meaningful revenue synergy and margin expansion potential as the integration progresses. We remain disciplined measure progress against clear milestones and prioritize actions that create durable value for customers and shareholders. In closing, this was an exceptional quarter for VSE. We delivered record revenue record profitability, including record adjusted EBITDA margins, generated approximately 14% organic growth, improved free cash flow, advanced integration and raise both revenue and adjusted EBITDA margin guidance. More importantly than any single quarter, these results demonstrate that our strategy continues to work. Our core businesses are performing exceptionally well. Our market position continues to strengthen and our expanded platform is creating new opportunities for growth, efficiency and long-term value creation. While we remain disciplined in managing the business through an evolving external environment, I have never been more confident in VSE's long-term competitive position, the quality of our team and the long-term opportunity to create value for our shareholders. Thank you for your continued support and confidence in VSE. Operator, we are now ready to take questions. Kenneth Herbert: Nice results. Maybe, John, just to kick off, the guidance raise in terms of the revenues, can you provide any more specifics around was that maybe better execution on recent acquisitions that you're expecting? Is it legacy business, distribution MRO. What should we think about underlying sort of the increased confidence in the second half and full year revenue outlook? . John Cuomo: Yes. I mean, it's honestly a little bit of everything. So if you look at our first quarter, we had really -- our stronger phase of our organic growth is actually on the distribution side in the legacy business. Second quarter, it kind of flipped a little bit in our MRO businesses were slightly stronger. Our acquisitions are all performing well. Just the teams continued to perform. We had a [indiscernible] year that are kind of ramping slightly ahead of schedule. So I'd say it's a little puts and takes from across the board rather than kind of one strong initiative. But I would say on the revenue side, it's more the core business confidence than anything our modeling on our acquisitions is pretty firm. But I'd say our confidence on the core business is driving the revenue guidance. Kenneth Herbert: Okay. Very helpful. And maybe really nice gross margins in the second quarter. And maybe, Adam, as we think about sort of moving forward, how do we think about incremental gross margin opportunities, both within PAG and across the organization as we think about that underpinning what should be continued margin expansion. But what are you looking at today as you look at some of the opportunities on gross margins? And how do we think about the right run rate there for the margins in the second half of this year, but more importantly, exiting '26? Adam Cohn: Yes. Thanks for the question, Ken. Yes, the margin performance was exceptionally strong in the quarter, really driven by the strong organic growth that John alluded to, especially in some of our higher-margin hedging focused businesses. So we saw very strong incrementals in the second quarter. I think right now, just given the organic growth visibility, we feel strong about the margins heading into the second half of the year, and you see that embedded into our updated guidance for 18.7% to 19% for full year. But we continue to see very strong margins, especially in the engine focused businesses. Sheila Kahyaoglu: John, you're now 90 days into owning PAG. So maybe can you update us on how that integration is going? I know you're very thorough with those. How much of the synergy realization is contributing to the full year margin rate versus organic improvement? John Cuomo: Yes. I mean Sheila, it's funny because I've read some of the pre-notes last night about kind of acceleration of synergies. And that's really not what drove the margin. We really let businesses run for a solid 90-100 days, I kind of call it a 100-day plan, you watched the business that you acquire, and then you validate some of your initial integration assumptions. So we really haven't kicked off. We've got things in action. But you'll see the synergy realization more in '27 than you are going to see in '26. We had -- this is mostly our core business. Obviously, we're trying to start some in-sourcing earlier, which will drive some margin improvement. But I'd say the majority of confidence in our raise is really based on the core business at this point. I mean, I feel very good about the business we've acquired. I'm not finding anything that's concerning at all. It's going to deviate from our plans, but that's not what's driving the back end of the year guidance increase. Sheila Kahyaoglu: Okay. Great. Maybe I'll stick with a follow-up on PAG. In that case, can you talk about what part of the business has been better than you expected versus when you first bought it? And how do you think about the opportunities within the business? John Cuomo: Yes. I think the part that better is -- and it's interesting, the CEO of PAG was very excited during the diligence of how the businesses can come together and where all of the in-sourcing and other opportunities can come. I think that is, I think, more -- we'll be able to accelerate that to a faster and greater pace than I had initially thought. I think some of the core technical capabilities of where we can drive proprietary content over time, I think some of those areas are greater than probably I had anticipated. But all in all, it's an outstanding team, love the culture of extremely customer-centric, the nimbleness and the agility of what they bring to the table is absolutely just second to month. So very excited about what's ahead and excited about accelerating some of our kind of themes around the integration some of those proprietary content concepts sooner than later. Louie Dipalma: To clarify the previous answer, is the updated margin expansion outlook mostly related to operating leverage and the upside on the revenue line? . Adam Cohn: Yes. Yes, it's really some multi of factors, [indiscernible] very strong margins in the second quarter, and we feel good about the organic growth in the second half of the year. I think we continue to see more in-sourcing opportunities, especially on the repair side, and that's really having an impact on our margins. And then we feel good about the PAG acquisition as well. It's performing in line with our expectations. But obviously, you're going to get a margin uplift in the third quarter as you have full quarter contributions from PAG. Louie Dipalma: Can you remind investors what were the original synergy expectations for the PAG acquisition if none of them have been realized yet? Adam Cohn: We had about $15 million of run rate synergies was our initial expectation. Louie Dipalma: Okay. And one other question in terms of the strong organic growth, organic growth actually accelerated from last year, even though industry travel volumes and aircraft retirements have been pretty flattish versus 2025. How do you explain that outperformance in terms of the organic growth acceleration. Would most of it be attributed to the new business wins, such as the Pratt & Whitney Canada APU win and the CFM56 or I guess how, in general, do you explain the acceleration versus last year? John Cuomo: Yes, I appreciate the question. And Louie, the one thing I'd add on top of it is we had a contract that expires. So we have hold to sell on top of the growth. So if you actually [indiscernible] core organic growth is actually even stronger. When you look at it, it's really what drives the growth, right? It's price and volume. We are still seeing -- remember, our business mix is slightly different than a lot of our competitors that are out there. Everyone talks about the commercial market. Half of our business is in general in Asia as well. And 50% of our business is engine related in totality. So first of all, the commercial markets are still very healthy. Are they growing at a staff of the rate of last year? No, but they're still quite healthy and robust. It's not a 0 growth game. The second is our business in general aviation markets are continuing to grow at a nice pace. The third is the engine side of both markets is growing faster than in the component side, and that's 50% of our business. And then we have new business wins. And then there's a little bit of a price element in there as well. So it's -- you kind of break it down into those -- all those individual buckets and is a little hard for each, but it's just a nice to see the core business starting to come together in performance we had planned. Louie Dipalma: Great. And are there expected to be any changes to that trend in the second half of the year? John Cuomo: No, not at this time. John Godyn: John, in your prepared remarks, you described the long-term vision as being the world's leading provider of aftermarket distribution and aftermarket services. And I know this isn't the first quarter you've had that sentence in there. But when I just take a step back and I think about what that means, it doesn't feel like that's a $7 billion enterprise value company. When I think of what that means across the coverage of AV, I can easily bring store companies that are 10x larger that might kind of fit that category and are still growing. So maybe you can just kind of reflect on that vision for a moment. and where this all goes from here in the fullness of time, it does kind of feel like we're at the beginning of the beginning. John Cuomo: Yes, I appreciate the question, John, and I'll answer half of it because I got to leave a little bit from my Investor Day in December. But the -- look at life in terms of chapters. And as you start a new chapter, you're continuing the story from the chapter before, but the reason you start a new chapter is there is kind of an impetus for some change in for what's next. When we look at our market, which is centered in OEM centricity, and you look at a $200 million aftermarket that's still 75% or so an OEM direct to end user. And that's where we're gaining most of our share. We still see a tremendous amount of upside in the opportunity set in our distribution business, our [indiscernible] overhaul business and equally or more important is our newer and more growing proprietary solutions business, where we own IP in kind of a few different ways. So I think you're looking at it the right way. I look at things in terms of kind of 3-year bucket, but I like to look even bigger than that. And we just see the enormous kind of firepower in the market, the opportunities regardless of little blips and ups and downs, when market takes, that's not overly concerning to us. We were looking long term of where there are gaps in markets that need to be filled and how we at VSE have something unique go and build those markets. So I appreciate the question and you'll see a lot more clarity around the puts and takes and what will financially and kind of from a forecast perspective over the next 3-plus years, help kind of solidify the confidence in that story as we get into December. John Godyn: We'll look out for that. If I could ask one more on PAG. After the deal was announced, one of the things that we chatted a bit about but I felt like it was underappreciated was the value of the earn-out in motivating the team. I recall you describing as the earn-out objectives being kind of a very high bar. It does seem like we're executing quite well toward that. Any thoughts on the achievability of the earnout this year and if that view has changed? John Cuomo: Yes. I think the top end is the high bar. We expect -- I mean I have high expectations and want them to achieve some element of the earn-out because it means the business is performing at or better than we had forecast. Adam, you want to kind of share how you modeled it in [indiscernible]? Adam Cohn: Yes. I mean if you look at the balance sheet, within the earnings release, you could see there's about $34 million of fair value on the earnout in terms of total expectation -- total opportunity about $25 million. So I think we're well aligned is based on 2026 adjusted EBITDA, and that's kind of where our expectations are right now. John Godyn: Yes. So the bottom line is it sounds like you're on track to achieve it? John Cuomo: [indiscernible]. Kristine Liwag: John, there's clear momentum in revenue growth and margin expansion from the core and you've got the incrementals from acquisition. Anything those questions are fairly well asked. I was wondering if you could talk about how you think about the free cash flow generation, strength of the company and that free cash flow conversion to EBITDA. What are the puts and takes in working capital with this combined entity. And when you compare your business to other aerospace defense, kind of suppliers in that ecosystem. Is there a path for you to get to a free cash flow to EBITDA conversion north of 70% over time? John Cuomo: [indiscernible] there. I mean yes, I'll just talk anecdotally and then I'll let Adam kind of walk through the math for you. And we'll work on against the 3-year guidance towards the back end of the year. As we've owned the business for 100 days. So I don't always like to overstate kind of my expectations until I just kind of continue to watch it perform. Our businesses from a CapEx perspective are quite light, our MRO distribution business, which is about $700 million, $800 million the business is only about 1% of sales at the top end. Our MRO businesses tend to be 2% to 3%, depending on how much investment we're making in the capacity expansion on the organic side. And the inventory on the working capital is really what drives this free cash flow generation. Because of all of the supply chain constraints in the market, we have been pretty prudent. You see some others talk about kind of missing a quarter because of inventory. So we're trying to be hedge ourselves on floor parts and make sure we're ahead of the curve. That said, as the business continues to grow, as those markets type to stabilize, and the business mix continues to shift more towards our proprietary solution and MRO businesses, what that does is just naturally drive a stronger free cash flow generation. So you want to talk a little bit about the back end of the year, Adam? Adam Cohn: Yes. No. I mean you mentioned it really well. There's going to be less working capital intensity in the back half of the year, and that's just in line with the seasonality of our business, especially this year where we had a couple of new programs that occurred in the first quarter, and you saw a heavy inventory use. You saw less use in the second quarter, we talked about a conversion particularly if you exclude some of the PAG related cash transaction costs, we're even expecting stronger free cash flow in the second half of the year as the working capital intensity continues to reduce, we have full quarter contributions from PAG. There's obviously going to be some offset with interest expense as we have the full run rate from the term loan B that we issued in the second quarter. But overall, we feel good about the conversion in the back half of the year. And then as John said, during the Investor Day, we'll share some more about longer-term free cash flow conversion targets. So we feel really good about the outlook. Kristine Liwag: Great. Super helpful. And following up on that inventory comment. So how much of that inventory increase is driven by part availability to support your MRO business versus filling up the distribution channels? And also following up on that distribution, sorry, I guess, a 3-part question. Yesterday, we saw Honeywell taken inventory obsolescence charge. Is there a risk in your distribution side of potential obsolescence risk? Adam Cohn: Yes. Yes. Good question. I would say in terms of inventory intensity, it's probably double in distribution than it is from an MRO perspective. So more of the organic growth in distribution is driving the inventory build, especially in the first half of the year. And then I would say in terms of outlook, no, we feel really good about it. We have very rigid strict policies around our health of our inventory. We're constantly assessing our programs and demand. So we feel very good. We don't feel like there's any risk. John Cuomo: And I know, like I kind of joke or [indiscernible] that we talk fast, so we kind of move fast, but there's a tremendous amount of discipline in our business. And some of our sales teams struggle where we don't take a distribution opportunity because it's exactly to your point, we feel like it has some obsolescence risk. When you look at our core distribution business, we are on looking at real, modern, solid platforms that have a lot of longevity in them, and we are not doing kind of one-off programs. And that's where I think people get into inventory obsolescence risk. When you're supporting whether it's lead or [indiscernible] engine where you're on the airframes of 737 MAX, A350, you're on core product lines, you have a lot of confidence in your inventory on the balance sheet. Louis Raffetto: John, I think when you talk about PAG initially, one of the things that you like most about it was kind of how they leverage the repair distribution model. I think you said maybe they even do it better than you guys. Can you just sort of expand on what you see them do and sort of maybe the difference between what you do and they do and how you can leverage what you're learning from them? John Cuomo: Yes. I think what they do very, very well is how they tie inside of their MRO shops, their exchange pool. So yes, there are a number of the larger customers who have inventory on the shelf. But -- and this has been a period of COVID where kind of holding inventory has not been a mapping. But for 90% of the cycles I've been through your end users don't want to hold inventory. So having those exchanges very closely tied with the MRO shop is helping them get the order. And I think that there is just a tremendous opportunity in how we tie the exchange pool to the MRO shops. The second thing is, I think as we continue to expand our [ DER ] repair capabilities is how do we utilize kind of our in-house kind of alternative sourcing models, whether it's creating our own products or using USM to create repair where we have gaps in supply chain. I think [indiscernible] those really, really well, and we look forward to kind of expanding on that in part of our focus. Louis Raffetto: And maybe just your latest thoughts on M&A, not trying to rush anything, obviously, but you've done several deals now, but you're certainly on track to be below, I think, 2x leverage by the end of the year. And I know you've got a list of other patients still like to do? John Cuomo: Yes, it is a very, very active market at the back end of the year has a tremendous amount of opportunities. So be an interesting kind of back end of the year to see how those opportunities kind of fall out. There are numbers that are interesting to us. They didn't ask [indiscernible] is an interesting model as well. I think valuations are very, very high. And they're actually multiples are expanding and not contracting. The competitive landscape has kind of increased as well. So there's a lot of factors to look into -- does the capability fit, do -- how confident do we feel about '27 and '28 and then kind of the valuation work. There are certain deals that I think we're able to absorb in our organization today while we're integrating PAG. And there might be a few others that might be a little bit too complex for us right now. So we'll stay with things that we feel like we can absorb and definitely not risk anything in the franchise or anything in our integration plan. But it doesn't preclude us from doing another one. Jeff Van Sinderen: In your prepared comments, John, I think you mentioned expanding MRO capacity capabilities for the engine aftermarket, which obviously is a really strong market right now. Can you speak more about some of the initiatives you're planning and working on towards that end? John Cuomo: Yes. I mean, from an organic perspective, I mean, we have 3 facilities that we're building a new facility for 1 of our engine shops, and we'll move that shop, and that will give us probably a 50% increase in capacity. And then for our other 2 stronger and poker shops, we're working on kind of expanding existing facilities. The other thing as we get into 2027, we'll talk more about kind of that new capability as the shops when we will have the labor, the space and the equipment to support those. So as we look at kind of the next generation of engines, specifically on the commercial side, and we want to support our OEM partners with backshop work, we need to make sure we've got both the capacity and the labor to be able to step in and support that. So there are some strong organic initiatives in front of us right now. Jeff Van Sinderen: Okay. Great. And then maybe if we can just touch on supply chain for a moment. Just wondering sort of the latest you're seeing there, how you feel like it's evolving? Any impact do you expect on inventory management around supply chain? . John Cuomo: Let's start with the [indiscernible] side of things. I don't expect any -- a spoke about kind of stronger free cash flow generation at the back end of the year. So nothing really different on our side. I think from the actual -- like what's happening in the market, it continues to be kind of a lockable -- 1 area gets fixed and another area kind of has an element of concern. As OEM production continues to ramp, which is a good thing for the market in general, it also creates the same supply that it's a little bit more constraints as well. I'd say, in total, the puts and takes, I'd say there had there's not much of a difference from my perspective. Over the last 12 months, there's improvements in some areas and weakness in others. So you just have to be ahead of the curve, but not making that materially changing any of our kind of forecasting at this point. Scott Deuschle: I joined a bit late, so I apologize if any of these were already addressed. But John, the sales beat on my math was about half organic and half inorganic. So I was wondering if you could talk a bit about where that inorganic outperformance came from, but then maybe what's most surprising you on the upside on some of these recent deals? John Cuomo: I'm sorry, there's a math on your inorganic and organic. I think that -- yes, organic growth is about 14%. We had contributions from the acquisitions. I'd say the acquisitions performed relatively in line with our expectations. Do they slightly be, yes, the core business was the bigger beat than the acquisition on the M&A side of the beat on the top line. I don't know that question [indiscernible]. Scott Deuschle: No, that's helpful. Yes. And then, John, the Honeywell is having some challenges with its supply chain now kind of looks like they're needing to make some [indiscernible] by meeting their aftermarket demand in order to support their OE customers. And so I guess the question I have for you is whether that might create an inroad for you to be able to do more for them given their constraints in serving market and given your existing relationship? And then can you say whether you've had any recent discussions to that effect? John Cuomo: Yes. I mean I think that we have certain platforms that have a lot of Honeywell content. 737, the NGs, we are one of the largest providers of kind of parts and services on that airplane. So I do hope that there's opportunities. We look at our supplier partners as customers, and I hope this way that we can help them solve some of those issues. As far as kind of detailed discussions, I'd rather not to kind of speak about how we have those conversations. But we've read the releases as well. And we'll see having anything we can do to support them. There are ways to take some of the kind of service material parts from some of the part out of some of the 737s and hopefully, put it through our repair facilities and maybe we can provide some opportunities [indiscernible] with that product. But I haven't had -- I don't know the details specifically of where their gaps are at this point. Jonathan Siegmann: Good quarter. Just a lot of questions have been answered already. So forgive maybe a more general one, but we have conversations with investors that have a perception that business jet services may be a relatively less attractive part of the aerospace market. Just would really appreciate hearing your comments, John, countering why this vertical is attractive and why it's a good fit for your company's capabilities? . John Cuomo: Yes. I mean, I appreciate the question. We hear that sometimes, too. And I think that the commercial market has a lot of the effectiveness around the big engines. There are more [indiscernible] flying than there are CFM56, but everyone likes to talk about the [indiscernible] opportunities. The -- we find the business in general aviation market. You have a few fractions that have a large fleet. But other than that, you have 15,000-plus end users. And it goes everything from a true large business, large cabin business aircraft to a small GA aircraft to [indiscernible]. And those end users tend to have very few aircraft, they tend to do some stock less inventory. So there's a long tail of end users, that don't have exchanges or inventory on their shelves, and they tend to have a stronger need for a stronger platform of management overall and inventory-centric aftermarket support. There's a lot of so many different variants to those aircraft and engine types that again, we find a great opportunity for someone like ourselves to support our OEM partners in managing that tail. And then with regards to the kind of market trends, where the volume comes from is less of the large cabin and more on the mid- and light cabin aircraft because those are the ones that are charging the most take off the landing the most. And you tend to see a lot of consistency, even a little bit of ups and downs in the market on those kind of in that sector. So we've been talking about this market for the last 6 years. And we'll continue to talk about it for at least the next 6 and will continue to be a really strong part of our business. So I appreciate the question, and we see a tremendous opportunity for our business. John Cuomo: Thanks, everybody, for the support this morning for the analysts. I know it's a very busy year these days. So I appreciate you all making time for us and to our shareholders. Thanks again for the conference and speak to you all early November. Thanks and have a great day. Operator: Thank you. And this does conclude today's conference call. Thank you for your participation. You may now disconnect. Before you buy stock in Vse, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vse wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Vse. The Motley Fool has a disclosure policy. VSE (VSEC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in VSE Corporation? Here are five stocks we like better. Record Q2 performance: Revenue rose 65% year over year to $449 million, while adjusted EBITDA nearly doubled to $86 million and margins expanded to a record 19.2%, driven by organic growth, acquisitions and strong aviation aftermarket demand. Acquisitions strengthen aviation capabilities: The Precision Aviation Group and NorthStar acquisitions expanded VSE’s global repair, distribution, engine-support and logistics platform. Management expects most PAG synergies to materialize in 2027, while core-business momentum remains the primary near-term growth driver. Full-year outlook raised: VSE now expects 2026 revenue growth of 61%–64% and an adjusted EBITDA margin of 18.7%–19%, up from prior guidance of 57%–61% growth and 18.1%–18.5% margins. 3 Industrials Stocks Standing Out for Growth and Analyst Optimism VSE (NASDAQ:VSEC) reported record second-quarter revenue and profitability for 2026, supported by double-digit organic growth, recent acquisitions and strength in aviation aftermarket repair and distribution activities. The company raised its full-year revenue-growth and adjusted EBITDA margin outlook following the results. Second-quarter revenue rose 65% year over year to $449 million, including approximately 14% organic growth. Adjusted EBITDA increased 98% to a record $86 million, while adjusted EBITDA margin expanded about 320 basis points to 19.2%, also a company record. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth “This second quarter marked a defining step forward for VSE,” President and CEO John Cuomo said, citing the completion of two acquisitions, record operating results and the launch of integration and synergy-capture initiatives. VSE completed its approximately $2 billion cash-and-equity acquisition of Precision Aviation Group, or PAG, on May 5. Cuomo described the purchase as the company’s largest transaction and said it expands VSE’s scale, global reach, proprietary content and repair capabilities across commercial aviation, business and general aviation, rotorcraft, OEM and defense markets. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High The company also closed its NorthStar acquisition on April 1 and has rebranded that operation as VSE Aviation Services. NorthStar adds engine-related maintenance, repair and overhaul, third-party logistics, teardown, kitting and component-support capabilities. Cuomo said VSE has established integration governance and executive-led workstreams involving sales-channel alignment, systems, insourcing and operating efficiency. While integration remains at an early stage, he said the company has identified opportunities to expand proprietary content and connect repair operations more closely with exchange inventory pools. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling However, management said the higher full-year margin outlook was driven predominantly by the core business rather than accelerated PAG synergies. Cuomo said VSE generally allows acquired businesses to operate for roughly 90 to 100 days before validating integration assumptions, and expects more synergy realization in 2027 than in 2026. Chief Financial Officer Adam Cohn said VSE’s original expectation for PAG was approximately $15 million in run-rate synergies. PAG was performing in line with expectations, he said, and will provide a full-quarter contribution in the third quarter. MRO revenue increased 149% year over year in the second quarter, while distribution revenue grew 17%. Cohn attributed MRO growth to expanded repair capacity and capabilities, engine-content demand, market-share gains, increased OEM customer spending and contributions from PAG and Aero-3. Distribution growth was supported by new business wins, product-line expansion, commercial-engine demand and the Aero-3 acquisition. Cuomo said core-business momentum was the principal driver behind the increased revenue forecast. He pointed to business wins that are ramping faster than expected, growth in both business and general aviation and commercial aviation, and the company’s engine-related exposure. The company said its Pratt & Whitney Canada auxiliary power unit distribution agreement ramped ahead of expectations during the quarter. VSE also took delivery of seven CFM56 engines and began processing the assets through in-house repair and teardown operations. Management said global air traffic and fleet utilization remained resilient. An aging aircraft base, limited availability of new aircraft and engines, and operators’ need to keep existing assets in service continue to support aftermarket demand, according to Cuomo. VSE said it has not seen recent macroeconomic or geopolitical uncertainty translate into a meaningful change in customer demand or operator behavior. The company continues to monitor external conditions, including energy-price volatility and supply-chain constraints. Cohn said the record quarterly margin reflected a more favorable mix of higher-margin product and repair activity, strong execution, synergies from prior acquisitions and PAG’s contribution. Management also cited continued insourcing opportunities, particularly on the repair side, as a source of margin improvement. Adjusted net income totaled $55 million, up 101% from the prior-year quarter. Adjusted diluted earnings per share were $1.75, an increase of 33%. VSE said adjusted net income and adjusted diluted EPS for the current and prior-year periods were updated to exclude intangible-asset amortization and stock-based compensation. Free cash flow was approximately $19 million during the quarter, improving from the first quarter and the year-earlier period. The figure included roughly $10 million in PAG-related transaction expenses. Excluding those costs, free cash flow conversion was approximately 34% of adjusted EBITDA, Cohn said. Management expects cash generation to improve in the second half as earnings increase, transaction-related costs decline and working-capital investments scale. Cohn said working-capital intensity was expected to decrease in the back half of the year, though full-quarter PAG contributions will be partly offset by a higher run rate of interest expense tied to the company’s new Term Loan B. At quarter end, VSE had total debt outstanding of $967 million and approximately $75 million in cash and cash equivalents, resulting in net debt of about $872 million. Adjusted net leverage was 2.4 times, and the company had no borrowings outstanding under its $500 million revolving credit facility. VSE raised its full-year 2026 outlook, now forecasting revenue growth of 61% to 64%, compared with its prior expectation of 57% to 61%. The company increased its adjusted EBITDA margin outlook to 18.7% to 19%, from 18.1% to 18.5% previously. Net interest expense is projected at approximately $36 million to $39 million for 2026. Depreciation and amortization are expected to total approximately $96 million to $100 million. The effective tax rate is projected at about 25%. Stock-based compensation is expected to be approximately $18 million to $19 million. Capital expenditures are expected to represent about 2% to 2.5% of revenue. Looking ahead, VSE plans to expand engine-focused MRO capacity through a new facility for one engine shop and expansions at two additional engine-focused locations. Cuomo said the company also remains open to additional acquisitions, though it intends to avoid deals that could disrupt PAG integration or core operations. VSE plans to host an investor day on Dec. 9 in New York, where management said it expects to provide additional detail on its strategy, longer-term outlook and financial targets. VSE Corporation (NASDAQ: VSEC) is a provider of aftermarket distribution and supply chain management services serving both government and commercial markets. The company's solutions span a wide range of industries, with particular emphasis on defense, aerospace and transportation. VSE's core mission is to ensure mission readiness by delivering critical parts, maintenance and technical support for equipment throughout its lifecycle. Through its Distribution Services segment, VSE sources, markets and distributes replacement parts and components for commercial truck, bus, rail and specialty vehicle applications. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "VSE Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. VSE Corporation (NasdaqGS: VSEC) reported Q2 2026 results with substantial year over year revenue and earnings growth. The company delivered an earnings outcome that significantly exceeded market expectations in the quarter. Management highlighted demand and profitability as key factors behind the Q2 2026 performance. The results were viewed by investors as a signal for VSE Corporation's long term growth trajectory as of August 6, 2026. Quarters like VSE Corporation's Q2 2026 can point to wider themes across select industrial and services stocks, so it can be useful to compare this story with companies on 51 high quality undervalued stocks For readers tracking the stock, VSE shares trade at $215.75 and have been volatile in recent months, with a rise of 16.6% over the past week but a decline of 9.4% over the past 30 days. Over longer periods, the stock has delivered gains over 1 year, 3 years and 5 years, and currently carries a value score of 2 on this screener. See which insiders are buying and buying and selling VSE following this latest news. For investors, VSE Corporation’s Q2 2026 beat reinforces that the aviation aftermarket focus is currently translating into higher revenue and profitability, with operating margin at 10.9% and six month results swinging from a loss to a profit. The raised 2026 revenue guidance in the 61% to 64% range suggests management has confidence in the demand backdrop and in integrating recent acquisitions. The market may be fixated on the size of this single quarter beat, while the fuller picture also includes higher leverage and integration risk from acquisitions and greater exposure to aviation cycles following the portfolio shift. From here, the key test for this read is the next couple of quarters of integration progress and margins. Investors can watch whether VSE maintains or improves double digit operating margins while delivering on the updated full year 2026 revenue guidance range without relying on further large acquisitions. For the full picture including more risks and rewards, check out the complete VSE analysis. Alternatively, you can check out the community page for VSE to see how other investors believe this latest news will impact the company's narrative. Do you think there's more to the story for VSE? Head over to our Community to see what others are saying! This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include VSEC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Revenue: $449 million, up 65% year-over-year, including 14% organic growth. Adjusted EBITDA: Record $86 million, up 98% year-over-year. Adjusted EBITDA Margin: Record 19.2%, up approximately 320 basis points year-over-year. Adjusted Net Income: $55 million, up 101% year-over-year. Adjusted Diluted EPS: $1.75, up 33% year-over-year. MRO Revenue: Increased 149% year-over-year. Distribution Revenue: Increased 17% year-over-year. Free Cash Flow: Approximately $19 million in the second quarter. Net Debt: Approximately $872 million at quarter end. Adjusted Net Leverage Ratio: 2.4 times at quarter end. Warning! GuruFocus has detected 5 Warning Sign with VSEC. Is VSEC fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. VSE Corp (NASDAQ:VSEC) delivered record revenue and profitability in Q2 2026, with revenue up 65% year-over-year and adjusted EBITDA nearly doubling to $86 million. The company achieved a record consolidated adjusted EBITDA margin of 19.2%, a 320 basis point improvement year-over-year, driven by favorable product mix and strong operating execution. Organic revenue grew approximately 14% year-over-year, supported by strength in both repair and distribution segments, new business wins, and increased share of wallet. VSE Corp (NASDAQ:VSEC) successfully closed two strategic acquisitions (PAG and NorthStar), creating a differentiated global aviation aftermarket platform with greater scale and capabilities. Management raised full-year 2026 revenue growth guidance to 61%-64% and adjusted EBITDA margin guidance to 18.7%-19%, reflecting strong first-half execution and confidence in the second half. The company generated approximately $19 million of free cash flow in Q2, a significant improvement from the prior year, and ended the quarter with a strong adjusted net leverage ratio of 2.4 times. Integration efforts for PAG are progressing well, with early identification of tangible opportunities in in-sourcing, joint sales, and operational efficiency, reinforcing confidence in synergy potential. The Pratt & Whitney Canada APU agreement ramped ahead of expectations, and the company took delivery of 7 CFM56 engines to begin processing through in-house repair operations. VSE Corp (NASDAQ:VSEC) faces potential variability in quarterly mix and timing, which could cause period-to-period fluctuations in profitability and margins. The broader macroeconomic and geopolitical environment remains dynamic, including volatility in energy prices, which could impact customer demand and operator behavior. The company incurred approximately $10 million in PAG-related cash transaction expenses during Q2, which absorbed some free cash flow generation. Supply chain constraints persist in the market, requiring the company to maintain prudent inventory levels, which can impact working capital and free cash flow conversion. The competitive landscape for M&A has intensified, with valuations expanding, making it more challenging to find attractive acquisition opportunities that fit the company's strategic criteria. While the company is confident in its inventory health, there is inherent risk of inventory obsolescence in the distribution business, particularly if market conditions shift. The company's free cash flow conversion was approximately 34% of adjusted EBITDA in Q2 (excluding transaction expenses), indicating room for improvement in working capital efficiency. Q: Can you provide more specifics on what drove the revenue guidance raise for the second half and full year? Was it better execution on recent acquisitions or the legacy business?A: John Cuomo (President and CEO): It's a little bit of everything. Our first quarter organic growth was stronger on the distribution side, while in the second quarter, our MRO businesses were slightly stronger. All acquisitions are performing well, and some new programs are ramping ahead of schedule. However, the increased confidence in the revenue guidance is primarily driven by the strength of the core business, as our modeling on acquisitions is already firm. Q: How should we think about the incremental gross margin opportunities, both within PAG and across the organization, as we look at the margin expansion underpinning the guidance?A: Adam Cohn (CFO): The margin performance was exceptionally strong in the quarter, driven by strong organic growth, especially in our higher-margin engine-focused businesses. We feel strong about margins heading into the second half, which is reflected in our updated guidance of 18.7% to 19% for the full year. We continue to see very strong margins, especially in the engine-focused businesses. Q: You are now 90 days into owning PAG. How is the integration going, and how much of the synergy realization is contributing to the full-year margin rate versus organic improvement?A: John Cuomo (President and CEO): Synergy realization is not what drove the margin. We are letting the businesses run for a solid 100 days to validate initial integration assumptions. You will see synergy realization more in 2027 than in 2026. The majority of the confidence in our guidance raise is based on the core business. We feel very good about the acquired business and are not finding anything concerning that would deviate from our plans. Q: Can you talk about what part of the PAG business has been better than you expected versus when you first bought it?A: John Cuomo (President and CEO): The part that is better is the potential for accelerating in-sourcing and other opportunities. The core technical capabilities where we can drive proprietary content over time are greater than anticipated. The team is outstanding, extremely customer-centric, and brings great nimbleness and agility. We are excited about accelerating our integration themes and proprietary content concepts sooner than later. Q: Can you remind investors what the original synergy expectations were for the PAG acquisition?A: Adam Cohn (CFO): We had about $15 million of run-rate synergies as our initial expectation. Q: Organic growth accelerated even though industry travel volumes are flattish. How do you explain this outperformance?A: John Cuomo (President and CEO): We had a contract that expired, so we have hold-to-sell on top of the growth, meaning core organic growth is even stronger. The growth is driven by price and volume. Commercial markets are still healthy, our business in general aviation markets is growing at a nice pace, and the engine side of both markets is growing faster than the component side, which is 50% of our business. We also have new business wins and a little bit of price element. Q: You described the long-term vision as being the world's leading provider of aftermarket distribution and services. Can you reflect on that vision and where this all goes from here?A: John Cuomo (President and CEO): We look at life in terms of chapters. We see a tremendous amount of upside in our distribution and overhaul businesses, and equally important, in our newer and growing proprietary solutions business where we own IP. We look at things in 3-year buckets but like to look even bigger. We see enormous firepower in the market and opportunities regardless of little blips. We will provide more clarity on the financial forecast over the next 3-plus years at our Investor Day in December. Q: Can you talk about the free cash flow generation and the path to getting to a free cash flow to EBITDA conversion north of 70% over time?A: John Cuomo (President and CEO): Our businesses are quite light from a CapEx perspective. Inventory on working capital is what really drives free cash flow generation. As the business mix continues to shift more towards our proprietary solution and MRO businesses, it will naturally drive stronger free cash flow generation. Adam Cohn (CFO): There will be less working capital intensity in the back half of the year, in line with seasonality. We expect stronger free cash flow in the second half as working capital intensity reduces and we have full quarter contributions from PAG. We will share longer-term free cash flow conversion targets at the Investor Day. Q: How much of the inventory increase is driven by part availability to support your MRO business versus filling up distribution channels? And is there a risk of obsolescence on the distribution side?A: Adam Cohn (CFO): Inventory intensity is probably double in distribution than from an MRO perspective. More of the organic growth in distribution is driving the inventory build. We feel very good about the outlook and have rigid policies around the health of our inventory. John Cuomo (President and CEO): We have a tremendous amount of discipline. We sometimes don't take a distribution opportunity if it has obsolescence risk. Our core distribution business is focused on real, modern, solid platforms with a lot of longevity, such as 737 MAX and A350, which gives us confidence in our inventory. Q: Can you expand on what PAG does well with the repair distribution model and how you can leverage what you're learning from them?A: John Cuomo (President and CEO): PAG does very well at tying their exchange pool inside their MRO shops. End users don't want to hold inventory, so having exchanges closely tied with the MRO shop helps them get the order. There is a tremendous opportunity in how we tie the exchange pool to the MRO shops. We also look to expand our DER repair capabilities and use in-house alternative sourcing models to create repair where there are gaps in the supply chain. Q: What are your latest thoughts on M&A given you are on track to be below 2 times leverage by the end of the year?A: John Cuomo (President and CEO): It is a very active market with a tremendous amount of opportunities. Valuations are very high and multiples are expanding. The competitive landscape has increased. We will stay with things we feel we can absorb while integrating PAG and will For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. VSE (VSEC) drew fresh attention after reporting second quarter 2026 results that topped market expectations and raising its full year revenue growth outlook to a range of 61% to 64%. See our latest analysis for VSE. The stronger Q2 report and higher guidance arrived after a mixed stretch for the stock, with a 16.63% 7 day share price return following a period where the 30 day share price return declined 9.35%. Even so, VSE’s momentum over a longer horizon remains positive, highlighted by an 18.99% year to date share price return and a 369.28% 5 year total shareholder return. If VSE’s move has you looking for other potential opportunities in related areas, it could be worth scanning aviation focused picks in the 56 AI infrastructure stocks After a sharp swing higher on strong Q2 numbers and raised guidance, the question for VSE now is simple. At this price, does the risk reward still tilt toward buyers, or has most of the upside already been priced in? Against VSE's last close at $215.75, the most widely followed narrative pegs fair value at $252.88, which frames today’s Q2 strength in relation to long run cash flow assumptions. Read the complete narrative. Want to see what earnings path needs to play out for that valuation to hold. The narrative leans on rapid profit expansion, rising margins and a richer future earnings multiple, so it is worth examining how those moving parts fit together. Result: Fair Value of $252.88 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, VSE also faces concentration in aviation aftermarket demand and higher net debt from acquisitions, which could pressure margins and challenge the current valuation narrative. Find out about the key risks to this VSE narrative. The SWS DCF model points to a 42.8% discount to fair value for VSE, yet the earnings multiple tells a different story. VSE trades on a P/E of 88.3x versus 37.7x for the US Aerospace & Defense industry and a 39.2x fair ratio estimate. That places a lot of weight on future earnings. How comfortable are you with that gap? See what the numbers say about this price — find out in our valuation breakdown. If this mix of optimism and caution around VSE leaves you undecided, act promptly and review the full picture for yourself with 3 key rewards and 2 important warning signs If VSE has sharpened your focus, do not stop there. Use the ideas below to quickly surface other stocks that might fit your goals and risk comfort. Target potential mispricings by reviewing companies that screen as high quality yet out of favor with the market through the 51 high quality undervalued stocks Strengthen your passive income plans by checking out stocks that feature resilient business profiles with attractive payouts in the 8 dividend fortresses Focus on resilience first and see which companies earn strong scores for financial robustness and consistency in the 79 resilient stocks with low risk scores This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include VSEC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Record Revenue and Profitability Raises 2026 Guidance MIRAMAR, Fla., August 05, 2026--(BUSINESS WIRE)--VSE Corporation ("VSE" or the "Company") (NASDAQ: VSEC, VSECU), a leading provider of aviation aftermarket distribution and repair services, announced today results for the second quarter 2026. SECOND QUARTER 2026 RESULTS(1) (As compared to the Second Quarter 2025) Total Revenues of $449.1 million increased 65.0% GAAP Net Income of $28.5 million increased 109.1% GAAP Net Income Margin of 6.4% increased approximately 140 basis points GAAP EPS (Diluted) of $0.91 increased 37.9% Adjusted EBITDA(2) of $86.0 million increased 98.0% Adjusted EBITDA Margin(2) of 19.2% increased approximately 320 basis points Adjusted Net Income(2) of $55.0 million increased 101.2% Adjusted EPS (Diluted)(2) of $1.75 increased 32.6% MANAGEMENT COMMENTARY "The second quarter marked a defining step forward for VSE as we completed the largest acquisition in our history and established a differentiated global aviation aftermarket platform," said John Cuomo, President and Chief Executive Officer of VSE Corporation. "With our recent acquisitions of Precision Aviation Group ("PAG") and NorthStar Technologies ("NorthStar"), along with our legacy VSE Aviation businesses, we are positioning VSE to become the world’s leading independent provider of aftermarket distribution and repair services, while remaining firmly grounded in the OEM-centric strategy that has guided our transformation. "The power of the combined platform is already evident in our financial performance. We delivered record revenue and profitability in the second quarter, exceeding our prior expectations and representing a significant step toward achieving a consolidated Adjusted EBITDA margin(2) of more than 20% in the near future. Organic growth remained broad-based, supported by new business wins, expanded capabilities, market share gains, greater share of wallet on existing programs and continued strength across the aviation aftermarket. "Integration is a core VSE capability and an important competitive differentiator. In the short time since closing on the PAG and NorthStar acquisitions, our teams have established clear business and integration plans and are already advancing tangible revenue and margin opportunities, including insourcing, joint sales initiatives, sales-channel alignment and operating efficiencies. We are confident in the combined strength of this platform. As integration progresses, we see meaningful synergy and margin expansion potential, further reinforcing our long-term growth strategy. The strength of our first-half performance, together with our visibility into the remainder of the year, supports our decision to raise both revenue and Adjusted EBITDA margin(2) guidance for 2026," concluded Mr. Cuomo. "VSE’s second quarter results reflect strong execution and operational discipline across the combined business," said Adam Cohn, Chief Financial Officer of VSE Corporation. "In the second quarter and compared to the same period last year, revenue increased 65% to $449 million, net income from continuing operations increased 109% to $29 million, Adjusted EBITDA from continuing operations(2) nearly doubled to $86 million, and Adjusted EBITDA margin from continuing operations(2) expanded approximately 320 basis points to a record 19.2%. We generated approximately $28 million of operating cash flow and $19 million of free cash flow(2) in the second quarter, with an Adjusted Net Leverage(2) ratio of approximately 2.4x. In addition, we expect stronger free cash flow(2) generation in the second half of the year, providing increased financial flexibility as we execute our integration priorities and disciplined capital allocation strategy." SECOND QUARTER HIGHLIGHTS PAG ACQUISITION VSE completed its acquisition of PAG from GenNx360 Capital Partners on May 5, 2026, in a transaction valued at approximately $2.025 billion in cash and equity, the largest acquisition in VSE’s history. The addition of PAG materially expands VSE’s scale, global reach, proprietary content and repair capabilities across commercial, business and general aviation, rotorcraft, OEM and defense end markets. Integration is underway with clear workstreams focused on sales-channel alignment, systems, insourcing, joint commercial opportunities and other revenue and margin synergies across the combined platform. NORTHSTAR ACQUISITION VSE completed its acquisition of NorthStar on April 1, 2026, adding engine-related maintenance, repair and overhaul ("MRO"), third-party logistics and engine component support to the Company’s aftermarket offering. NorthStar’s engine teardown, kitting and engine component-level service capabilities span multiple engine platforms and deepen VSE’s integration within OEM aftermarket supply chains. Since closing, VSE has rebranded the business as VSE Aviation Services, aligned its leadership structure and begun executing initiatives to expand its logistics and MRO capabilities. SECOND QUARTER RESULTS The Company's revenue increased 65.0% year-over-year to a record $449.1 million in the second quarter of 2026. Organic revenue growth was approximately 14%, driven by strength in the commercial engine aftermarket, new business wins, execution on new distribution agreements, expanded product and repair capabilities, market share gains and increased share of wallet on existing programs. The PAG, Aero 3, and NorthStar acquisitions also contributed to the year-over-year increase. Repair and distribution revenue increased 149.4% and 17.2%, respectively, versus the prior-year period. The Company reported net income from continuing operations of $28.5 million, compared to $13.6 million in the second quarter of 2025. Adjusted EBITDA from continuing operations(2) increased by 98.0% to a record $86.0 million, compared to $43.5 million in the prior-year period. Adjusted EBITDA margin from continuing operations(2) reached a record 19.2%, an increase of approximately 320 basis points, driven primarily by a greater mix of higher-margin product and repair activity, continued synergy realization from previously acquired businesses, and contributions from PAG. FINANCIAL RESOURCES AND LIQUIDITY The Company generated $27.6 million of operating cash flow and $18.7 million of free cash flow(2) in the second quarter of 2026. As of June 30, 2026, the Company had $75.4 million in cash and approximately $500.0 million available under its revolving credit facility. Total debt outstanding was $966.7 million. Total net debt(2) was $871.6 million and Adjusted net leverage(2) was approximately 2.4x at quarter end. The Company anticipates stronger free cash flow(2) generation in the second half of 2026, supporting continued deleveraging and disciplined investment in organic and inorganic growth opportunities. UPDATED FULL YEAR 2026 CONSOLIDATED GUIDANCE REVENUE VSE is increasing its full year 2026 revenue guidance based on strong first-half performance, continued organic growth, and improved visibility into the second half of 2026. The Company is also encouraged by the demand environment and customer activity, reinforcing confidence in the strength and durability of the business. The Company now expects full year 2026 revenue growth of 61% to 64%, compared to its prior outlook of 57% to 61%. ADJUSTED EBITDA MARGIN VSE is also increasing its full year 2026 Adjusted EBITDA margin(2) outlook based on record first-half profitability, continued operating execution, and the early benefits of integrating its recent acquisitions. The Company now expects full-year 2026 Adjusted EBITDA margin(2) in the range of 18.7% to 19.0%, compared to its prior outlook of 18.1% to 18.5%. SECOND QUARTER RESULTS 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 from Continuing Operations, Adjusted EPS (Diluted) from Continuing Operations, EBITDA from Continuing Operations, Adjusted EBITDA from Continuing Operations, Adjusted EBITDA margin from continuing operations, Acquisition Adjusted EBITDA from Continuing Operations, TTM Adjusted EBITDA from Continuing Operations, TTM Acquisition Adjusted EBITDA from Continuing Operations, 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's 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 from Continuing Operations represents Net Income adjusted for acquisition-related costs, amortization of intangible assets, stock-based compensation, 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) from Continuing Operations 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. Beginning with the second quarter of 2026, Adjusted Net Income from Continuing Operations and Adjusted EPS (Diluted) from Continuing Operations now include adjustments for amortization of intangible assets and stock-based compensation, with retrospective adjustments included for prior periods presented. Management believes these adjustments provide useful information to evaluate VSE's ongoing operating performance on a consistent basis. EBITDA from Continuing Operations represents net income before interest expense, income taxes, amortization of intangible assets and depreciation and other amortization. Management believes EBITDA from Continuing Operations 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 from Continuing Operations represents EBITDA from Continuing Operations (as defined above) adjusted for non-cash stock-based compensation and discrete items as identified above. Adjusted EBITDA margin from Continuing Operations represents Adjusted EBITDA from Continuing Operations as a percentage of revenue. Acquisition Adjusted EBITDA from Continuing Operations represents Adjusted EBITDA from Continuing Operations plus the pre-acquisition portion of EBITDA from Continuing Operations for the trailing twelve months. TTM Adjusted EBITDA from Continuing Operations represents Adjusted EBITDA from Continuing Operations as defined above for the trailing twelve months. TTM Acquisition Adjusted EBITDA from Continuing Operations includes pre-acquisition portion of EBITDA from Continuing Operations for the trailing twelve months that is not included in historical results. TTM Acquisition Adjusted EBITDA from Continuing Operations does not reflect all adjustments that would otherwise be required in connection with the preparation of pro forma financial statements in accordance with Article 11 of Regulation S-X. 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 include purchases of property and equipment. Net leverage ratio is calculated as net debt divided by TTM Adjusted EBITDA from Continuing Operations. Adjusted Net leverage ratio is calculated as net debt divided by TTM Acquisition Adjusted EBITDA from Continuing Operations. Additionally, Adjusted EBITDA margin is also presented as a forward-looking non-GAAP financial measure, defined as estimated operating income before depreciation and amortization expenses as a percentage of revenue. This measure is 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 from Continuing Operations 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 a 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 from Continuing Operations EBITDA from Continuing Operations and Adjusted EBITDA from Continuing Operations Free Cash Flow (1) Net Debt Net Leverage Ratio CONFERENCE CALL A conference call will be held Thursday, August 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 about August 6, 2026 for more details on the Company's second 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 the Company's operations; challenges related to workforce management or any failure to attract or retain a skilled workforce; the significant expenses that have been incurred and will be incurred in connection with the PAG Acquisition; the Company's ability to successfully integrate and achieve the strategic and other objectives and benefits, including any expected synergies, relating to recently completed acquisitions, including the PAG Acquisition; access to and the performance of third-party package delivery companies; prolonged periods of inflation and the Company's ability to mitigate the impact thereof; future business conditions resulting in impairments; the Company's ability to successfully divest businesses and to transition facilities in connection therewith; the Company'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; the Company's ability to mitigate the impacts of increased costs related to tariffs; litigation and legal actions arising from the Company's operations; technology and cybersecurity threats and incidents; the Company's outstanding indebtedness, including the increase in indebtedness upon completion of the PAG Acquisition; market volatility in the debt and equity capital markets; the Company's ability to continue to pay dividends at current levels or at all; the Company's published financial guidance; restrictions and limitations that may stem from financing arrangements the Company enters into or assumes in the future; and the other factors identified in the Company's reports filed or expected to be filed with the SEC, including the Company's Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 27, 2026 ("2025 Form 10-K"). 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805644830/en/ Contacts INVESTOR CONTACT Michael PerlmanVP, Investor Relations & TreasuryT: (954) 547-0480 M: (561) [email protected]

MIRAMAR, Fla., July 22, 2026--(BUSINESS WIRE)--VSE Corporation ("VSE" or the "Company") (NASDAQ: VSEC, VSECU), a leading provider of aviation aftermarket distribution and repair services, announced today that it will issue second quarter 2026 results after the market close on Wednesday, August 5, 2026. A conference call will be held on Thursday, August 6, 2026, at 8:30 A.M. ET to review the Company’s financial results, discuss 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. A replay of the audio webcast will be available at the same location following the conclusion of the call. Participants who will be dialing in for the conference call should register to obtain their dial in and passcode details. Participants may pre-register at any time. 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. FORWARD-LOOKING STATEMENTS This press release contains certain forward-looking statements. These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause VSE’s actual results to vary materially from those indicated or anticipated by such statements. Many factors could cause actual results and performance to be materially different from any future results or performance, including, among others, the risk factors described in our reports filed or expected to be filed with the SEC. Any forward-looking statement or statement of belief speaks only as of the date of this press release. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. View source version on businesswire.com: https://www.businesswire.com/news/home/20260722954143/en/ Contacts INVESTOR RELATIONS CONTACT:Michael PerlmanVice President of Investor Relations and TreasuryPhone: (954) 547-0480Email: [email protected]