VSE Reports First Quarter 2000 Results
ALEXANDRIA, Va., May 3 /PRNewswire/ -- VSE Corporation (Nasdaq: VSEC)
reported consolidated financial results for the three-month periods ended
March 31, 2000 and 1999, as follows:
VSE Corporation and Subsidiaries
Consolidated Statements of Income (unaudited)
(dollars in thousands, except share data)
Three months ended March 31,
2000 1999
Revenues, principally from contracts $31,178 $40,189
Costs and expenses of contracts 29,940 39,393
Gross profit 1,238 796
Selling, general and administrative expenses 163 159
Loss on CMstat operations -- 315
Interest expense (income), net 54 (40)
Income before income taxes 1,021 362
Provision for income taxes 403 156
Net income $618 $206
Weighted average shares outstanding 2,122,289 2,114,905
Basic and diluted earnings per share $.29 $.10
Financial Results
Consolidated revenues shown in the table above include VSE's engineering,
logistics, management and technical services business (engineering services).
The financial results for VSE's former subsidiary CMstat are shown as "Loss on
CMstat operations." CMstat was divested in May, 1999.
Consolidated net income for the three-month period was $618 thousand ($.29
a share) compared to $206 thousand ($.10 a share) for the same three-month
period last year. The increase in net income is primarily due to the absence
of the loss attributable to CMstat operations in 1999 (a net loss of $201
thousand or $.09 a share for the first three months of 1999) and to an
increase in VSE (parent company) profitability based on a decrease in indirect
costs due to cost reductions implemented in 1999. The increase in parent
company net income was partially offset by a decrease in the profits of VSE's
BAV Division associated with a decrease in BAV revenues.
VSE Chairman and CEO Don Ervine said, "The decline in revenue during the
first quarter of this year compared to the same time last year principally
reflects a decline in the revenues of our BAV Division, which provides ship
transfer services and follow-on technical support in connection with a U.S.
Navy foreign military sales program. Such sales require Congressional
approval on a country specific basis, and are also subject to negotiation and
other timing differences which can lead to large revenue differences from
quarter to quarter. However, there is a significant backlog of program work
that could result in an increased level of effort towards the end of this year
and on into next year."
"A highlight of the first quarter was the successful start-up of a new
U.S. Navy contract, awarded to a joint venture of our subsidiary Ship
Remediation and Recycling, Inc., to dismantle excess ships through an
environmentally sound recycling process. While the current contract reflects a
small pilot project, we are optimistic that our outstanding performance could
result in substantial future awards. In April 2000, the joint venture
submitted a proposal to remediate and dismantle up to four additional Navy
ships. We think we have developed a responsive, proprietary process to
dispose of excess ships in an environmentally safe manner, at least cost to
the ship owner, and we are eager to expand the volume of work being
performed."
"Finally, as previously indicated, we are undertaking a comprehensive
review and repositioning of the entire company to reduce costs and eliminate
unprofitable contracts. These efforts should strengthen our competitiveness
in the federal market place, and I am pleased to report that we are beginning
to see positive results. The increase in our quarterly cash dividend rate,
announced last month, partially reflects the success of this profit
enhancement program, as well as our commitment to increase shareholder value."
VSE provides diversified services and products to the engineering,
energy, environment, health care, information technology, and defense services
markets. VSE's principal customers are agencies of the U.S. Govern ment and
other government prime contractors. VSE subsidiaries and divisions include
BAV, Energetics Incorporated, Fleet Maintenance and Sea Systems, IT and MOBIS
division, Land Systems, Human Resource Systems, Inc., Ordnance, Postal
Service, Ship Remediation and Recycling, Inc., Value Systems Services (VSS),
and VSE Services International, Inc. The company has about 900 employees
providing services and products from more than 20 locations across the United
States and around the world. |
