-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WOlJX87NjqXo3ycZgJ2+7h5wjBersp9WQyq6fmnHpnvgpsyXC1uG4FHAV2vacpJ1 jL2B1MY70pqr+vg/1QNagQ== 0000102752-06-000038.txt : 20061102 0000102752-06-000038.hdr.sgml : 20061102 20061102154959 ACCESSION NUMBER: 0000102752-06-000038 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060930 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061102 DATE AS OF CHANGE: 20061102 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VSE CORP CENTRAL INDEX KEY: 0000102752 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ENGINEERING SERVICES [8711] IRS NUMBER: 540649263 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-03676 FILM NUMBER: 061182663 BUSINESS ADDRESS: STREET 1: 2550 HUNTINGTON AVE CITY: ALEXANDRIA STATE: VA ZIP: 22303 BUSINESS PHONE: 7039604600 MAIL ADDRESS: STREET 1: 2550 HUNTINGTON AVENUE CITY: ALEXANDRIA STATE: VA ZIP: 22303 FORMER COMPANY: FORMER CONFORMED NAME: VALUE ENGINEERING CO DATE OF NAME CHANGE: 19790612 8-K 1 vse8k110206.txt VSE CORPORATION FORM 8-K OCTOBER 30, 2006 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 30, 2006 VSE CORPORATION (Exact Name of Registrant as Specified in its Charter) DELAWARE (State or Other Jurisdiction of Incorporation or Organization) 0-3676 54-0649263 (Commission File Number) (I.R.S. Identification Number) 2550 Huntington Avenue Alexandria, Virginia 22303-1499 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (703) 960-4600 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) VSE CORPORATION Item 2.02 Results of Operations Attached hereto as Exhibit 99.1 is a copy of the Registrant's news release dated October 30, 2006 announcing the consolidated financial results for the three- and nine-month periods ended September 30, 2006. Item 9.01 Financial Statements and Exhibits (C) Exhibits Exhibit Number ------- 99.1 News Release, October 30, 2006 entitled "VSE Reports Third Quarter 2006 Results" -2- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VSE CORPORATION (Registrant) Date: November 2, 2006 /s/ T. R. Loftus ----------------------------- T. R. Loftus Executive Vice President and Chief Financial Officer -3- EX-99.1 2 vseexh99-1.txt NEWS RELEASE "VSE REPORTS THIRD QUARTER 2006 RESULTS" EXHIBIT 99.1 VSE REPORTS THIRD QUARTER 2006 RESULTS Company Earns $0.78 Per Share Diluted in Quarter Alexandria, Virginia, October 30, 2006 - VSE Corporation (Nasdaq: VSEC) reported the following consolidated financial results for the periods ended September 30, 2006 and 2005: VSE Corporation and Subsidiaries Consolidated Statements of Income (unaudited) (in thousands, except share and per share amounts)
______________________________________________________________________________________ Three Months Nine Months 2006 2005 2006 2005 ---- ---- ---- ---- Revenues $ 103,630 $ 76,600 $ 261,774 $ 215,201 Costs and expenses of contracts 100,457 73,883 252,723 207,354 --------- --------- --------- --------- Gross profit 3,173 2,717 9,051 7,847 Selling, general and administrative expenses 199 173 617 340 Interest income, net (56) (43) (276) (84) --------- --------- --------- --------- Income before income taxes 3,030 2,587 8,710 7,591 Provision for income taxes 1,141 1,000 3,309 2,935 --------- --------- --------- --------- Net income $ 1,889 $ 1,587 $ 5,401 $ 4,656 ========= ========= ========= ========= Earnings per share: Basic $ .80 $ .68 $ 2.28 $ 2.01 Diluted .78 .66 2.23 1.95 Weighted average shares outstanding: Basic 2,371,099 2,348,228 2,366,393 2,313,058 Diluted 2,421,100 2,417,056 2,424,835 2,382,986 ______________________________________________________________________________________
Financial Results VSE revenues increased about $27.0 million (up 35%) and $46.6 million (up 22%) for the three- and nine-month periods compared to the same periods of last year, primarily due to Army Equipment Support Program subcontract work performed through VSE's Rapid Response support contract. Increased revenues from equipment refurbishment services provided to the Army Reserve and from services provided by Energetics to its clients also contributed to the increase in revenues. The increase was partially offset by decreased revenues under the BAV ship transfer program, the Tanker Ballistic Protection System (TBPS) program, and certain other Navy and Coast Guard contracts. VSE net income increased about $302 thousand (up 19%) and $745 thousand (up 16%) for the three- and nine-month periods compared to the same periods of last year. The increases in net income were primarily due to increases in profits on the BAV ship transfer program, certain Navy contracts, and from Energetics services. Profits were also enhanced because the increase in the Army Equipment Support Program revenues enabled VSE to spread fixed corporate costs over a larger base. The increase in net income was partially offset by decreased -more- VSE Corporation News Release (continued) Page 2 _______________________________________________________________________________ profits in the TBPS program, equipment refurbishment services, and VSE management training services. CEO Comments Commenting on the financial results, VSE Chairman, President and CEO/COO Don Ervine said, "VSE third quarter revenues of about $103.6 million are a record high quarter for the company, and earnings of about $1.9 million for the quarter ($.78 per share diluted) are keeping pace with the increase in revenues. Our funded backlog at September 30, 2006, was about $226 million compared to about $276 million at December 31, 2005." "One of our challenges as we grow is to replace expiring work with new and potentially larger programs. In August 2006 we reported that VSE was awarded a contract to support the U.S Department of the Treasury seized and forfeited general property program. This is a single award, cost-plus-incentive-fee contract that includes a base period of performance, four option periods, and award term provisions. If all option and award term periods are exercised, contract performance is expected to continue through September 30, 2014, and to provide potential revenue over the life of the contract of approximately $113 million, depending on service requirements." "We continue to find promising opportunities to bid in the markets we serve. For example, work on the ex-Kidd class ship transfer program, one of the largest and most complex programs in VSE history, was substantially complete in September 2006; however, funded backlog on our BAV Ship Transfer contract for other task orders remains high at approximately $74 million as of September 30, 2006. BAV is involved in the early stages of potential transfers of several different classes of excess Navy ships to foreign navies during the period of 2007 to 2010. At the same time, BAV's follow-on technical support services to support previously transferred ships and customers around the world continues to be an essential VSE service. Similar opportunities and capabilities in our Army and Navy program areas are expected to contribute to future VSE revenues." "Our growth over the last three years has been the result of good marketing teamwork and the versatility of our managers and employees in identifying and responding to emerging customer requirements in a timely manner. I look forward to reporting on our continued progress in the months ahead." Accounting for Stock-based Compensation Effective January 1, 2006, VSE adopted the fair value recognition provisions of FASB Statement 123(R) to account for stock-based compensation. As a result, VSE's net income was reduced by about $117,000 for the nine-month period ended September 30, 2006, or about $.05 per share basic and diluted. Results for prior period have not been restated. On a pro forma basis, VSE net income for the nine-month period ended September 30, 2005, would have been reduced by about $173,000 or about $.07 per share basic and diluted had the company adopted SFAS 123(R) in the prior-year period. Safe Harbor This news release contains statements which, to the extent they are not recitations of historical fact, constitute "forward looking statements" under federal securities laws. All such statements are intended to be subject to the safe harbor protection provided by applicable securities laws. For discussions identifying some important factors that could cause actual VSE results to differ VSE Corporation News Release (continued) Page 3 _______________________________________________________________________________ materially from those anticipated in the forward looking statements in this news release, see VSE's public filings with the Securities and Exchange Commission. VSE provides diversified services to the engineering, energy and environment, defense, and homeland security markets from more than 20 locations across the United States and around the world. For more information on VSE services and products, please see the Company's web site at www.vsecorp.com or contact Len Goldstein, Director of Business and New Product Development at (703) 317-5202. News Contact: C. S. Weber, CAO, (703) 329-4770. -----END PRIVACY-ENHANCED MESSAGE-----