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VSE Investor Overview & 10-Year Retrospective FY 2014 Christine Kaineg, VSE Investor Relations 703-329-3263 or [email protected] 1

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Page 1: VSE Investor Overview - content.stockpr.comcontent.stockpr.com/vsecorp/db/Presentations/523/pdf/VSE+Q4+FY14+IR... · VSE Investor Overview & 10-Year Retrospective FY 2014 Christine

VSE Investor Overview & 10-Year Retrospective

FY 2014

Christine Kaineg, VSE Investor Relations

703-329-3263 or [email protected]

1

Page 2: VSE Investor Overview - content.stockpr.comcontent.stockpr.com/vsecorp/db/Presentations/523/pdf/VSE+Q4+FY14+IR... · VSE Investor Overview & 10-Year Retrospective FY 2014 Christine

A Proven Industry Leader

Fleet Sustainment

Service life extension and performance enhancement of aging mission critical fleets, including vehicles, ships and aircraft

Supply Chain Management

• Total life cycle end-to-end product movement including complete logistics visibility and asset tracking. Warehouse management with extensive facilities expertise and large scale inventory control procedures.

Maintenance, Repair and Overhaul

• One of the nation's leading providers of maintenance, reset, overhaul and modernization support, ensuring land, sea and air systems are capable of performing their operational missions throughout their lifecycle.

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

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Market Segment Overview

Supply Chain Management

• Logistics

• Field Support

• Warehouse Management

• Program Management

• Demand Forecasting

• Source/Procurement

• Customer Inventory Management

Maintenance, Repair & Overhaul

• Engineering

• Design Management

• Research & Development

• Program Management

• Foreign Military Sales (FMS)

• Reverse Engineering

IT and Consulting Services

• IT Services

• Management Consulting

• Process Improvement

• Medical Logistics

• Energy and Environment Consulting Services

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Diverse Groups & Subsidiaries

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

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

VSE Aviation, Inc. Maintenance, repair and overhaul and parts supply for corporate and regional jet aircraft engines and engine accessories. Includes Prime Turbines, CT Aerospace, Kansas Aviation and Air Parts & Supply Co.

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

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

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$280.1

$364.0

$603.2

$937.4

$974.2

$811.0

$580.8

$546.8

$471.6

$424.1

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

$800.0

$900.0

$1,000.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 20145

Won Iraq/Afghanistan War Support Contracts

(CECOM R2 and Tanker Coating)

Revenue & Key Events Timeline

Iraq/Afghanistan War support contract bookings

reach nearly $1B (CECOM R2)

U.S. enters recession leading to

financial & budget crisis . Withdrawal

from middle east begins to accelerate.

Acquisition of WBI (June 2011)

Acquisition of VSE Aviation, Inc. (Jan 2015)

Acquisition of Akimeka, LLC (Aug 2010)

Acquisition of ICRC (June 2007)

Acquisition of G&B (2008)

2005-2014 Revenue CAGR = 4.2%

NASDAQ CAGR: 8.07%

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Range: Feb 1, 2014 – Feb 1, 2015

Source: E*TRADE Financial

VSE Stock Price Peer Comparison

VSEC Stock Performance

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Customer Revenue Breakdown

94%

5%

1%

2006

Defense

Federal Civil

Commercial

7

Page 8: VSE Investor Overview - content.stockpr.comcontent.stockpr.com/vsecorp/db/Presentations/523/pdf/VSE+Q4+FY14+IR... · VSE Investor Overview & 10-Year Retrospective FY 2014 Christine

$280.1

$364.0

$603.2

$937.4

$974.2

$811.0

$580.8

$546.8

$471.6

$424.1

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

$800.0

$900.0

$1,000.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2005-2014 REVENUE CAGR = 4.2%

8

Revenue & Key Internal Events

Penetrated Army Reserve stateside

vehicle “re-set” market”

Won first NAVSEA FMS re-compete

Acquired G&B Solutions

Acquired Akimeka

Acquired Wheeler Bros., Inc.

Won Rapid Response (R2) Contract

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2014 Financial Summary

Source: 2014 VSE Annual Report

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2014 Financial Summary

Source: 2014 VSE Annual Report

All per share data has been adjusted for stock splits

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2014 Financial Summary

Source: 2014 VSE Annual Report

All per share data has been adjusted for stock splits

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2014 Financial Summary

Source: 2014 VSE Annual Report

ROE is calculated as Net Income divided by Beginning of Year Shareholders Equity

All per share data has been adjusted for stock splits

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Summary Income Statement

In thousands, except share and per share amounts

FY 2014 FY 2013For years ending December 31 $ $

Revenues 424,071 471,638

Contract Costs 383,001 424,250

Selling, General and Administrative 4,140 3,285

Gross Profit 41,070 47,388

32,947 38,314

Net Income 19,365

Interest Expense Income (net) 3,983 5,789

22,852

Income Before Taxes

Basic Earnings Per Share 3.62 4.29

Diluted Earnings Per Share 3.61 4.28

Discontinued Operations - -

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Summary Balance Sheet

In thousands, except share and per share amounts

164,261

29,141

186,803

Total Liabilities and Stockholders' Equity 355,330 380,529

Goodwill and Intangibles (net)

TOTAL LIABILITY & EQUITY FY 2014 FY 2013

STOCKHOLDERS' EQUITY FY 2014 FY 2013

$ $

$ $

Total Stockholders' Equity 205,489

Total Liabilities 149,841 193,726

Long Term Lease Obligations 24,584 25,721

52,669 56,418

Bank Debt 23,563 64,487

LIABILITIES FY 2014 FY 2013

$ $

49,363 39,315

Total Assets 355,330 380,529

52,911 57,738

Inventories

Receivables (net) 59,391 78,387

Cash and Cash Equivalents 263 220

ASSETS FY 2014 FY 2013

$ $

Property and Equipment (net)

Other

Accounts Payable & Accrued Expenses

Other 49,025 25,061

174,309

30,560

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Selected Quarterly Data

In thousands, except share and per share amounts

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Stock Trends

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Year End Stock Price & Annual Range

18

2005-2014 STOCK PRICE CAGR = 12.1 %

NASDAQ CAGR: 8.07%

Chart shows annual high/low stock price range All per share data has been adjusted for stock splits

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VSE Corporation Proprietary Information

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

VSE Investor Relations: Christine Kaineg

6348 Walker Lane

Alexandria, Virginia 22310

Phone: (703) 329-3263

Email: [email protected]

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Page 21: VSE Investor Overview - content.stockpr.comcontent.stockpr.com/vsecorp/db/Presentations/523/pdf/VSE+Q4+FY14+IR... · VSE Investor Overview & 10-Year Retrospective FY 2014 Christine

CEO, President, and COO

M.A. Gauthier

IT, Energy & Management Consulting Segment

Energetics

N. Margolis

Akimeka

J. T. Harris

CFO

T.R. Loftus

Executive Vice President

Contracts & Procurement C.R. Douglas

Vice President

Human Resources

T. Bailey Vice President

General Counsel Corporate Secretary

T. M. Kiernan Vice President

Operational Structure

(Corporate Level)

Federal Services Group

M.A. Gauthier

Includes:

Global Maritime Services

J.R. Brown

Global Land Services

J.M. Coritz

VSE International Corp.

J.M. Coritz/J.R. Brown

Supply Chain Segment

Wheeler Bros., Inc. C. Wheeler

VSE Aviation, Inc.

P. Goffredi

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

VSE 10-Year Financial Data

22

2005 – 2014 CAGRs:

Revenue CAGR = 4.2%

Net Income CAGR = 12.1%

Shareholders Equity CAGR = 23.3%

VSE Trajectory 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Revenue ($M) $280.1 $364.0 $603.2 $937.4 $974.2 $811.0 $580.8 $546.8 $471.6 $424.1

Net Income ($M) $6.2 $7.8 $14.1 $19.0 $24.0 $23.7 $20.5 $21.3 $22.8 $19.4

Net Margin 2.2% 2.1% 2.3% 2.0% 2.5% 2.9% 3.5% 3.9% 4.8% 4.6%

Shareholders' Equity (BOY) $23M $30M $38M $56M $76M $101M $124M $144M $164M $187M

VSE Return on Equity (ROE) 26.8% 25.8% 36.9% 33.8% 31.6% 23.4% 16.6% 14.8% 13.9% 10.4%

Long Term Debt ($M) $0M $0M $0M $0M $0M $11M $145M $116M $65M $23M

Split adjusted Earnings Per Share $1.33 $1.64 $2.85 $3.75 $4.68 $4.56 $3.93 $4.03 $4.29 $3.62

Diluted Earnings Per Share $1.29 $1.61 $2.82 $3.74 $4.67 $4.53 $3.90 $4.01 $4.28 $3.61

Dividends $0.115 $0.135 $0.155 $0.175 $0.195 $0.23 $0.27 $0.31 $0.35 $0.39

Page 23: VSE Investor Overview - content.stockpr.comcontent.stockpr.com/vsecorp/db/Presentations/523/pdf/VSE+Q4+FY14+IR... · VSE Investor Overview & 10-Year Retrospective FY 2014 Christine

$280.1

$364.0

$603.2

$937.4

$974.2

$811.0

$580.8

$546.8

$471.6

$424.1

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

$800.0

$900.0

$1,000.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 201423

Mergers, Divestitures & Acquisitions

Acquired

Acquired Acquired

Divested

Acquired

Jan. 2015

Acquired

Merged

Page 24: VSE Investor Overview - content.stockpr.comcontent.stockpr.com/vsecorp/db/Presentations/523/pdf/VSE+Q4+FY14+IR... · VSE Investor Overview & 10-Year Retrospective FY 2014 Christine

2.2% 2.1%

2.3%

2.0%

2.5%

2.9%

3.5%

3.9%

4.8%

4.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Net Margin

24

2005-2014 NET MARGIN CAGR = 7.6%

Page 25: VSE Investor Overview - content.stockpr.comcontent.stockpr.com/vsecorp/db/Presentations/523/pdf/VSE+Q4+FY14+IR... · VSE Investor Overview & 10-Year Retrospective FY 2014 Christine

P/E Range w/ Year End P/E

25

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

High P/E 15.91 15.80 23.86 13.24 10.46 11.77 8.44 6.73 12.17 20.70

Low P/E 7.94 6.08 11.68 6.05 4.16 5.84 5.35 5.18 5.17 11.33

Year End P/E Ratio 15.85 10.31 17.15 10.45 9.62 7.23 6.18 6.27 11.20 18.22

15.85

10.31

17.15

10.459.62

7.23

6.18 6.27

11.20

18.22

0.00

5.00

10.00

15.00

20.00

25.00

30.00

All per share data has been adjusted for stock splits

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Debt (End of Year)

26

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Enterprise Value

27

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VSE Snapshot

28 Chart depicts split adjusted annual dividends per share