VSE Reports Third Quarter 2001 ResultsCompany Earns $0.10 Per Share in Quarter; CEO Reports on Growth Initiatives
PR NEWSWIRE - October 30, 2001 09:11
Consolidated revenues for the three and nine month periods ended September 30, 2001, declined 5% and 10% compared to the same periods of 2000, primarily due to a decline in the revenues of VSE's ship transfer division (BAV Division), the expiration of contracts in VSE's VSS and Postal Divisions, and a reduction in revenues associated with the divestiture of HRSI's Health Care Division in 2000. These revenue reductions were offset in part by increases in the revenues of VSE's other business units, including Energetics Incorporated and the Telecommunications Technologies Division (TTD).
Consolidated net income for the three and nine month periods ended September 30, 2001, declined 32% and 40% compared to the same periods of 2000, primarily due to the loss of profits associated with the contract expirations and to lower BAV fee income associated with the lower BAV revenues. These reductions were offset in part by increases in profits associated with Energetics' increased revenues, by nonrecurring sublease income of about $250,000 recorded during the second quarter, and by the elimination of start- up losses by TTD.
VSE Chairman and CEO Don Ervine said, "As reported earlier this year, we expect VSE annual revenues and net income for 2001 to be about the same as for 2000. Revenues for 2000 were about $122 million, and net income was about $968 thousand ($0.46 per share), including the December 2000 write off of $417 thousand ($0.19 per share loss) for a promissory note acquired in the sale of CMstat.
"In prior reports we identified initiatives to increase revenues and improve profitability. Earlier this month we reported the following progress in achieving our goals:
* "We reported on the award of a new five-year contract to VSE to provide scientific and engineering services to support ordnance, energetic materials, and related hardware and software programs at the Naval Surface Warfare Center, Indian Head Division. The competitively-awarded contract, including four one-year option periods, represents potential VSE revenues of $72 million.
* "We reported on the progress of our new TTD Division, which has performed $7 million of work in its first 12 months of operations, with over $1 million of work completed in the month of September 2001. TTD has eliminated the losses associated with start-up activity, and we expect TTD to contribute a modest profit during their second year of operations. TTD markets the company's growing capability to provide customers with the latest products, services, and support for security systems and multimedia telecommunications solutions.
* "We reported on the consolidation of VSE's engineering, logistics, management, and technical services work for the Army, Navy, and Postal Service into a new Federal Group, and we appointed Bill Farmen as Group Director."
"During the past year, I reported on some of the outstanding people, including one new director and several new officers, who have joined VSE, and on investments in our business development group. Investing in managers with a record of success is an important part of our strategy. In October 2001, we were able to recruit Bill Farmen as our Senior Vice President and Group Director for VSE's new Federal Group. Major General Farmen, U.S. Army (Ret.), is a widely recognized and highly respected logistics management executive with more than 35 years of broad technical and management experience in the defense industry. We believe his appointment positions VSE for future growth, and we look forward to working with him and to expanding our range of services and customers." |
