VSE Reports Third Quarter 2000 Results
ALEXANDRIA, Va., Oct. 27 /PRNewswire/ -- VSE Corporation (Nasdaq: VSEC) reported consolidated financial results for the three- and nine-month periods ended September 30, 2000 and 1999:
Consolidated revenues for the three- and nine-month periods ended September 30, 2000, declined 17% and 24% compared to the same periods of 1999, primarily due to a decline in the revenues of VSE's BAV Division and to a small reduction in the volume of services rendered by other VSE units during the first nine months of 2000.
Consolidated net income for the three-month period ended September 30, 2000, decreased 54% (about $367 thousand) compared to the same period of 1999, primarily due to the decrease in revenues during the quarter and to VSE's investment in its new Telecommunications Technologies Division (see discussion below). Consolidated net income for the nine-month period ended September 30, 2000, increased 47% (about $424 thousand) compared to the same period of 1999, primarily due to the absence of the loss attributable to CMstat operations in 1999.
VSE Chairman and CEO Don Ervine said, "As a result of a decline in 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, VSE's overall revenues are down substantially in 2000. 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 and year to year. While there is no assurance about future revenue levels under this foreign military sales program, our advance planning efforts for potential new work indicates a significant backlog that could result in an increase in revenues in 2001 or 2002."
"During the quarter just ended, VSE made significant progress in identifying and bidding new work. We submitted proposals for new work which have the potential to grow the company, and we continue to support existing customers with new proposals. We have increased our marketing tempo in every division across the company, and we are investing in marketing, business development, and other capabilities to expand our business base."
"As previously announced, during the past quarter VSE established a new Telecommunications Technologies Division to market the company's growing capability to provide customers with the latest products, services, and support in network, multimedia, and audio-visual technology. We think this is an important step in continuing our strategy to support customers with effective knowledge management and information technology solutions. While this investment has dampened our results for the third quarter (about $240 thousand pretax or $.07 a share), our goal for this division is to achieve breakeven results for the fourth quarter of 2000 and to contribute to earnings in 2001."
"As discussed in VSE's periodic SEC filings on Forms 10-K and 10-Q (see "Divestiture" in Notes to Consolidated Financial Statements), VSE has a promissory note with a remaining principal balance of $688 thousand received in connection with the May 1999 sale of its former subsidiary CMstat. All payments of the note principal and interest have been received as scheduled through September 1, 2000."
"During the past quarter, VSE's subsidiary HRSI divested its health care support division. We believe VSE shareholders will be better served by accelerating our investments in marketing and information technology." |
