ALEXANDRIA, Va., March 27 /PRNewswire/ -- VSE (Nasdaq: VSEC) reported significant increases in its engineering, logistics, management, and technical services business segment in 1997; however, the loss incurred by its software products and services segment resulted in a net loss for the year.
* Engineering, logistics, management, and technical services segment revenues increased 32% to $153 million, with net income increasing 32% to $2.6 million or $1.21 a share.
* The software products and services segment revenues decreased by 28% to $3.2 million, with a net loss of about $4.0 million or $1.89 a share.
* On a combined basis, VSE reported consolidated revenues of about $156 million and a consolidated net loss of $1.4 million or a loss of $.68 a share for the year.
VSE Chairman and CEO Don Ervine said, "The increase in consolidated annual revenues in 1997 was primarily due to an increase in the work performed by VSE and its team of subcontractors in connection with a U.S. Navy ship transfer contract VSE won in 1995." The ship transfer contract contributed $75 million to VSE revenues in 1997 compared to $45 million in 1996.
"As reported earlier, our software products and services segment incurred losses and had a serious negative impact on our results for 1997. However, decisive action has been taken to realign and restructure this segment, and we do not expect it to have a similar effect on our annual results for 1998. Although we have consistently identified the negative effects of the software products and services segment on our consolidated financial results throughout 1997, and we continue to identify the risks associated with this business segment in 1998, stockholders should not completely discount the possibility of financial gains from this segment."
"In view of current backlog estimates, VSE has the potential to increase annual revenues and to deliver positive earnings per share in 1998. However, based on our current business and contract mix, which includes both fixed- price contracts and contracts with long sales cycles, we expect quarterly earnings in 1998 to continue to fluctuate. Accordingly, it is likely that VSE's future quarterly operating results from time to time may not meet the expectations of market analysts or investors. In such event, the price of VSE stock would likely be materially and adversely affected. We believe our annual revenue and earnings trends are positive, but it is important not to minimize the current risks and the continuing potential for earnings volatility." |
