VSE CORP - Quarter Report: 2010 March (Form 10-Q)
United
States
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-Q
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the Quarter Ended March 31, 2010
Commission
file number 0-3676
VSE
CORPORATION
(Exact
name of registrant as specified in its charter)
|
Delaware
|
54-0649263
|
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
2550
Huntington Avenue, Alexandria, VA 22303-1499 (703/960-4600)
(Address
and telephone number of principal executive offices)
www.vsecorp.com
(webpage)
Securities
registered pursuant to Section 12(b) of the Act:
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Title
of Each Class
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Name
of each exchange on which registered
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|
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Common
Stock, $0.05 par value
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The
NASDAQ Global Select Market
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Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T(section 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes ¨ No
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (check
one).
Large
accelerated filer ¨
Accelerated filer x
Non-accelerated filer ¨ Smaller reporting company
¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the
Exchange Act). Yes ¨ No x
Number of
shares of Common Stock outstanding as of April 30, 2010:
5,191,213.
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VSE
Corporation and Subsidiaries
Forward
Looking Statements
This
report contains statements that, to the extent they are not recitations of
historical fact, constitute "forward looking statements" under federal
securities laws. All such statements are intended to be subject to the safe
harbor protection provided by applicable securities laws. For discussions
identifying some important factors that could cause actual VSE Corporation
(“VSE,” the “Company,” “us,” “our,” or “we”) results to differ materially from
those anticipated in the forward looking statements contained in this report,
see VSE's discussions captioned “Business,” “Risk Factors,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and
“Notes to Consolidated Financial Statements” contained in VSE’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2009 filed with the Securities
and Exchange Commission (the “SEC”) on March 4, 2010.
Readers
are cautioned not to place undue reliance on these forward looking statements,
which reflect management’s analysis only as of the date hereof. We
undertake no obligation to revise publicly these forward looking statements to
reflect events or circumstances that arise after the date
hereof. Readers should carefully review the risk factors described in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and
in the reports and other documents the Company files from time to time with the
SEC, including this and other Quarterly Reports on Form 10-Q to be filed by us
subsequent to its Annual Report on Form 10-K and any Current Reports on Form 8-K
we file.
(in
thousands except share and per share amounts)
|
March
31,
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December
31,
|
|||||||
|
2010
|
2009
|
|||||||
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Assets
|
||||||||
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Current
assets:
|
||||||||
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Cash
and cash equivalents
|
$ | 2,188 | $ | 8,024 | ||||
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Receivables,
principally U.S. Government, net
|
154,209 | 175,185 | ||||||
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Deferred
tax assets
|
1,586 | 2,036 | ||||||
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Other
current assets
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8,113 | 7,979 | ||||||
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Total
current assets
|
166,096 | 193,224 | ||||||
|
|
||||||||
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Property
and equipment, net
|
24,035 | 24,683 | ||||||
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Intangible
assets
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8,877 | 9,336 | ||||||
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Goodwill
|
20,930 | 19,530 | ||||||
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Other
assets
|
7,598 | 7,217 | ||||||
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Total
assets
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$ | 227,536 | $ | 253,990 | ||||
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|
||||||||
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Liabilities
and Stockholders’ Equity
|
||||||||
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Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 86,877 | $ | 112,995 | ||||
|
Accrued
expenses
|
28,849 | 34,069 | ||||||
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Dividends
payable
|
260 | 258 | ||||||
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Total
current liabilities
|
115,986 | 147,322 | ||||||
|
|
||||||||
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Deferred
compensation
|
4,011 | 3,934 | ||||||
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Deferred
income taxes
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182 | 324 | ||||||
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Other
liabilities
|
1,106 | 1,100 | ||||||
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Total
liabilities
|
121,285 | 152,680 | ||||||
|
|
||||||||
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Commitments
and contingencies
|
||||||||
|
|
||||||||
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Stockholders’
equity:
|
||||||||
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Common
stock, par value $0.05 per share, authorized
15,000,000 shares; issued and outstanding
5,191,213 and 5,170,190, respectively
|
260 | 258 | ||||||
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Additional
paid-in capital
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15,521 | 15,720 | ||||||
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Retained
earnings
|
90,470 | 85,332 | ||||||
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Total
stockholders’ equity
|
106,251 | 101,310 | ||||||
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Total
liabilities and stockholders’ equity
|
$ | 227,536 | $ | 253,990 | ||||
The
accompanying notes are an integral part of these financial
statements.
|
For
the three months
|
||||||||
|
ended
March 31,
|
||||||||
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2010
|
2009
|
|||||||
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Revenues
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$ | 228,176 | $ | 240,455 | ||||
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Contract
costs
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219,227 | 232,809 | ||||||
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Selling,
general and administrative expenses
|
298 | 202 | ||||||
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Operating
income
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8,651 | 7,444 | ||||||
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Interest
income, net
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5 | 59 | ||||||
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Income
before income taxes
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8,656 | 7,503 | ||||||
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Provision
for income taxes
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3,258 | 2,863 | ||||||
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Net
income
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$ | 5,398 | $ | 4,640 | ||||
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Basic
earnings per share:
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$ | 1.04 | $ | 0.91 | ||||
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Basic
weighted average shares outstanding
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5,180,410 | 5,112,356 | ||||||
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Diluted
earnings per share:
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$ | 1.04 | $ | 0.91 | ||||
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Diluted
weighted average shares outstanding
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5,180,410 | 5,126,629 | ||||||
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Dividends
declared per share
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$ | 0.050 | $ | 0.045 | ||||
The
accompanying notes are an integral part of these financial
statements.
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For
the three months
|
||||||||
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ended
March 31,
|
||||||||
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2010
|
2009
|
|||||||
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Cash
flows from operating activities:
|
||||||||
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Net
income
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$ | 5,398 | $ | 4,640 | ||||
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Adjustments
to reconcile net income to net cash
|
||||||||
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used
in operating activities:
|
||||||||
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Depreciation
and amortization
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2,152 | 1,633 | ||||||
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Loss
(gain) on sale of property and
equipment
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3 | (147 | ) | |||||
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Deferred
taxes
|
308 | (156 | ) | |||||
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Stock-based
compensation
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205 | 294 | ||||||
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Changes
in operating assets and liabilities:
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||||||||
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Receivables,
net
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20,976 | (15,299 | ) | |||||
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Other
current assets and noncurrent assets
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(544 | ) | 1,028 | |||||
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Accounts
payable and deferred compensation
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(26,041 | ) | 402 | |||||
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Accrued
expenses
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(6,577 | ) | (3,818 | ) | ||||
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Other
liabilities
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6 | 132 | ||||||
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Net
cash used in operating activities
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(4,114 | ) | (11,291 | ) | ||||
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Cash
flows from investing activities:
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||||||||
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Purchases
of property and equipment
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(1,019 | ) | (2,484 | ) | ||||
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Contingent
consideration payments
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(445 | ) | (1,624 | ) | ||||
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Net
cash used in investing activities
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(1,464 | ) | (4,108 | ) | ||||
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Cash
flows from financing activities:
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||||||||
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Borrowings
on loan arrangement
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56,808 | 75,490 | ||||||
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Repayments
on loan arrangement
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(56,808 | ) | (60,342 | ) | ||||
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Dividends
paid
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(258 | ) | (229 | ) | ||||
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Net
cash (used in) provided by financing activities
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(258 | ) | 14,919 | |||||
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Net
decrease in cash and cash equivalents
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(5,836 | ) | (480 | ) | ||||
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Cash
and cash equivalents at beginning of period
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8,024 | 638 | ||||||
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Cash
and cash equivalents at end of period
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$ | 2,188 | $ | 158 | ||||
The
accompanying notes are an integral part of these financial
statements.
(1)
Nature of Business and Basis of Presentation
Our
business is focused on providing sustainment services for U.S. Department of
Defense ("DoD") legacy systems and equipment and professional services to DoD
and Federal Civilian agencies. Our operations consist primarily of logistics,
engineering, equipment refurbishment, IT, construction management and consulting
services performed on a contract basis. Substantially all of our contracts are
with United States Government (the “government”) agencies and other government
prime contractors.
Our
active divisions include GLOBAL Division (“GLOBAL”), Communications and
Engineering Division (“CED”), Engineering and Logistics Division (“ELD”), Field
Support Services Division (“FSS”), Fleet Maintenance Division (“FMD”), and
Systems Engineering Division (“SED”). Our currently active subsidiaries are
Energetics Incorporated (“Energetics”), Integrated Concepts and Research
Corporation (“ICRC”), and G&B Solutions, Inc.
(“G&B”).
Our
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements. In our opinion, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 2010
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2010. For further information refer
to the consolidated financial statements and footnotes thereto included in our
Annual Report on Form 10-K for the fiscal year ended December 31,
2009.
We have
elected to change the presentation of the accompanying Consolidated Statements
of Income to report “operating income” instead of “gross
profit.” This change did not impact the amounts reported in the
accompanying consolidated statement of income for the three months ended March
31, 2009.
Subsequent
Events
There
were no subsequent events that required recognition or disclosure.
Use
of Estimates in the Preparation of Financial Statements
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates. Estimates affecting the financial statements include
accruals for contract disallowance reserves, self-insured health claims and
estimated cost-to-complete on firm fixed-price contracts.
(2)
Bank Notes Payable
We have a
loan agreement with a group of banks that provides us with revolving loans and
letters of credit. The maximum amount of credit available to us as of March 31,
2010 was $50 million and includes a provision whereby we may elect to increase
the maximum credit availability to a total of $75 million. The maturity date of
the loan agreement is August 26, 2011. From time to time we may request
changes in the amount, maturity date, or other terms and the
banks
VSE
CORPORATION AND SUBSIDIARIES
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March
31, 2010
may amend
the loan to accommodate our request. The amount of credit available
to us under the loan agreement is subject to certain
conditions, including a borrowing
formula based on our billed receivables. Under the terms of the loan agreement,
we may borrow against the revolving loan at any time and can repay the
borrowings at any time without premium or penalty. We pay a commitment fee,
interest on any revolving loan borrowings at a prime-based rate or an optional
LIBOR-based rate, and fees on any letters of credit that are
issued.
We had
approximately $4.9 million and $4.8 million of letters of credit outstanding as
of March 31, 2010 and December 31, 2009, respectively. We had no revolving loan
amounts outstanding as of March 31, 2010 and December 31, 2009. Interest expense
incurred on revolving loan borrowings for the three months ended March 31, 2010
and March 31, 2009 was approximately $32 thousand and $54 thousand,
respectively.
The loan
agreement contains collateral requirements that secure our assets, restrictive
covenants, a limit on annual dividends, and other affirmative and negative
covenants. Under the terms of the loan agreement, we have agreed to maintain a
$600 thousand compensating balance with one of the banks. As of March 31, 2010
we have not been notified by the banks, nor are we aware, of any defaults under
the loan agreement. We were in compliance with the covenants as of March 31,
2010.
(3)
Stock-based Compensation
Restricted
Stock
In
January of every year since 2007, we have notified certain employees that they
are eligible to receive awards under the 2006 Restricted Stock Plan based on
financial performance for the respective calendar years. On March 2, 2010, the
employees eligible for the restricted stock awards based on the financial
performance of 2007, 2008 and 2009, received 16,123 shares of common
stock.
In
January of every year since 2007, we also have awarded shares of restricted
stock to our non-employee Directors under the 2006 Restricted Stock Plan. On
January 2, 2010, the non-employee Directors received 4,900 shares of common
stock.
The
compensation expense related to all restricted stock awards discussed above and
included in contract costs for the three months ended March 31, 2010 and 2009
was approximately $495 thousand and $535 thousand, respectively.
The
stock-based compensation amount of approximately $205 thousand and $294 thousand
shown on the accompanying statements of cash flows for the three months ended
March 31, 2010 and 2009, respectively, is based on the compensation expense
included in contract costs reduced by the tax withholding associated with the
awards issued during the three months ended March 31, 2010 and 2009,
respectively.
(4)
Earnings Per Share
Basic
earnings per share (“EPS”) has been computed by dividing net income by the
weighted average number of shares of common stock outstanding during each
period. Shares issued during the period are weighted for the portion of the
period that they were outstanding.
VSE
CORPORATION AND SUBSIDIARIES
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March
31, 2010
Diluted
EPS has been computed in a manner consistent with that of basic earnings per
share while giving effect to all potentially dilutive common shares that were
outstanding during each period. Potentially dilutive common shares
represent incremental common shares issuable upon exercise of stock options.
There were no common shares issuable upon the exercise of stock options that
could potentially dilute EPS in the future that were not included in the
computation of diluted EPS because to do so would have been anti-dilutive for
the three months ended March 31, 2010 and 2009.
|
Three
Months
|
|||
|
ended
March 31,
|
|||
|
2010
|
2009
|
||
|
Basic
weighted average common
shares outstanding
|
5,180,410
|
5,112,356
|
|
|
Effect
of dilutive options
|
-
|
14,273
|
|
|
Diluted
weighted average common
shares outstanding
|
5,180,410
|
5,126,629
|
|
No stock
options were exercised during the three months ended March 31, 2010 and 2009,
and there are currently no stock options outstanding. Our stock
option plan expired as of December 31, 2009.
(5)
Commitments and Contingencies
We have,
in the normal course of business, certain claims against us and against other
parties and we may be subject to various governmental
investigations. In our opinion, the resolution of these claims and
investigations will not have a material adverse effect on our results of
operations or financial position. However, the results of any legal proceedings
cannot be predicted with certainty.
(6)
Business Segments and Customer Information
Business
Segments
Management
of our business operations is conducted under four reportable operating
segments: the Federal Group, the International Group, the IT, Energy and
Management Consulting Group, and the Infrastructure Group. These segments
operate under separate management teams and financial information is
produced for each segment. The various divisions within the Federal
Group and the International Group and the two subsidiaries within the IT, Energy
and Management Consulting Group are operating segments as defined by the
accounting standard for segment reporting and meet the aggregation of operating
segments criteria. We evaluate segment performance based on
consolidated revenues and profits or losses from operating income.
Federal Group - Our
Federal Group provides engineering, technical, management and integrated
logistics support services to U.S. military branches and other government
agencies. The divisions in this group include CED, ELD, FSS, and
SED.
International Group -
Our International Group provides engineering, industrial, logistics and foreign
military sales services to the U.S. military and other government agencies. This
group includes our GLOBAL and FMD divisions.
VSE
CORPORATION AND SUBSIDIARIES
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March
31, 2010
IT, Energy and Management
Consulting Group – Our IT, Energy and Management Consulting Group
provides technical and consulting services primarily to various civilian
government agencies. This group includes Energetics and G&B.
Infrastructure Group
– Our Infrastructure Group is engaged principally in providing engineering and
transportation infrastructure services and construction management services
primarily to Federal Civilian agencies. This group consists of
ICRC.
Our
segment information for the three months ended March 31, 2010 and 2009 is as
follows (in thousands):
|
Three
Months
|
||||||||
|
ended
March 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Revenues:
|
||||||||
|
Federal
Group
|
$ | 129,766 | $ | 152,957 | ||||
|
International
Group
|
69,248 | 64,156 | ||||||
|
IT,
Energy and Management Consulting
Group
|
20,292 | 16,705 | ||||||
|
Infrastructure
Group
|
8,870 | 6,637 | ||||||
|
Total
revenues
|
$ | 228,176 | $ | 240,455 | ||||
|
Operating
income:
|
||||||||
|
Federal
Group
|
$ | 4,784 | $ | 4,498 | ||||
|
International
Group
|
2,042 | 1,838 | ||||||
|
IT, Energy
and Management Consulting
Group
|
1,984 | 1,175 | ||||||
|
Infrastructure
Group
|
281 | 39 | ||||||
|
Corporate/unallocated
expenses
|
(440 | ) | (106 | ) | ||||
|
Operating
income
|
$ | 8,651 | $ | 7,444 | ||||
Customer
Information
Our
revenue by customer is as follows (in thousands):
|
Three
Months
|
||||||||
|
ended
March 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Source of Revenues
|
||||||||
|
Army/Army
Reserve
|
$ | 127,411 | $ | 144,484 | ||||
|
Navy
|
53,776 | 59,224 | ||||||
|
Department
of Treasury
|
11,904 | 9,540 | ||||||
|
Department
of Transportation
|
7,980 | 4,953 | ||||||
|
Other
|
27,105 | 22,254 | ||||||
|
Total
revenues
|
$ | 228,176 | $ | 240,455 | ||||
VSE
CORPORATION AND SUBSIDIARIES
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March
31, 2010
(7)
Goodwill
Changes
in goodwill for the three months ended March 31, 2010 are as follows (in
thousands):
|
IT,
Energy and
Management
Consulting
|
Infrastructure
|
Total
|
||||||||||
|
Balance
as of December 31, 2009
|
$ | 13,287 | $ | 6,243 | $ | 19,530 | ||||||
|
Contingent
consideration earned
|
1,400 | - | 1,400 | |||||||||
|
Balance
as of March 31, 2010
|
$ | 14,687 | $ | 6,243 | $ | 20,930 | ||||||
Under the
terms of the ICRC and G&B acquisitions, additional consideration is due to
the sellers if certain financial performance targets are
achieved. G&B achieved certain financial performance targets for
the second earn-out period ended on March 31, 2010. This resulted in a $1.4
million earn-out, which was recorded as goodwill and will be paid to the seller
in the second quarter of 2010.
(8)
Fair Value Measurements
The
accounting standard for fair value measurements defines fair value, and
establishes a market-based framework or hierarchy for measuring fair
value. The standard is applicable whenever assets and liabilities are
measured at fair value.
The fair
value hierarchy established in the standard prioritizes the inputs used in
valuation techniques into three levels as follows:
Level 1 –
Observable inputs – quoted prices in active markets for identical assets and
liabilities;
Level 2 –
Observable inputs other than the quoted prices in active markets for identical
assets and liabilities – includes quoted prices for similar
instruments, quoted prices for identical or
similar instruments in inactive
markets,
and amounts derived from valuation models where all significant inputs are
observable in active markets; and
Level 3 –
Unobservable inputs – includes amounts derived from valuation models where one
or more significant inputs are unobservable and require us to develop relevant
assumptions.
Included
in other assets as of March 31, 2010 and in other current assets and other
long-term assets as of December 31, 2009 is approximately $4.0 million and $4.8
million, respectively, of investments we hold in a rabbi trust related to a
non-qualified benefit plan. We determined the fair value of these
assets using the Level 1 methodology. We have an offsetting deferred
compensation liability for this plan. As such, we do not have
earnings volatility as a result of fluctuations in the value of the plan’s
investments.
(9)
Recent Accounting Pronouncements
In
October 2009, the FASB revised its accounting guidance related to revenue
arrangements with multiple deliverables. The guidance relates to the
determination of when the individual deliverables included in a multiple-element
arrangement may be treated as separate units of accounting and modifies the
manner in which the transaction consideration is allocated across the individual
deliverables. Also, the guidance expands the disclosure requirements
for revenue arrangements with multiple deliverables. The guidance
VSE CORPORATION AND
SUBSIDIARIES
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March
31, 2010
will be
effective for us beginning on January 1, 2011, and may be applied
retrospectively for all periods presented or prospectively to arrangements
entered into or materially modified after the adoption date. Early
adoption is permitted provided that the guidance is retroactively applied to the
beginning of the year of adoption. We are currently assessing the
potential effect the adoption of this new guidance will have, if any, on our
financial statements.
Executive
Overview
Organization
Our
business is focused on providing sustainment services for U.S. Department of
Defense ("DoD") legacy systems and equipment and professional services to DoD
and Federal Civilian agencies. Our operations consist primarily of logistics,
engineering, equipment refurbishment, IT, construction management and consulting
services performed on a contract basis. Substantially all of our contracts are
with United States Government (the “government”) agencies and other government
prime contractors.
Our
business is managed under operating groups. Our Federal Group operations are
conducted by our Communications and Engineering Division ("CED"), Engineering
and Logistics Division ("ELD"), Field Support Services Division (“FSS”), and
Systems Engineering Division ("SED"). Our International Group operations are
conducted by our GLOBAL Division ("GLOBAL") and Fleet Maintenance Division
("FMD"). Our IT, Energy and Management Consulting Group operations are conducted
by our wholly owned subsidiaries Energetics Incorporated ("Energetics") and
G&B Solutions, Inc. (“G&B”). Our Infrastructure Group operations are
conducted by our wholly owned subsidiary Integrated Concepts and Research
Corporation (“ICRC”).
Segments
Our
operations are conducted within four reportable segments aligned with our
management groups: 1) Federal; 2) International; 3) IT, Energy and Management
Consulting; and 4) Infrastructure.
Federal
Group - Our Federal Group provides engineering, technical, management and
integrated logistics support services to U.S. military branches and other
government agencies.
CED - CED is dedicated to the
management and execution of the Rapid Response (“R2”) Program, which supports
clients across DoD and the government. CED manages execution of tasks involving
research and development, technology insertion, systems integration and
engineering, hardware/software fabrication and installation, testing and
evaluation, studies and analysis, technical data management, logistics support,
training and acquisition support. A large portion of our current work on this
program is related to the U.S. military involvement in the Middle East and Asia.
A substantial portion of our revenue on the R2 contract results from the pass
through of subcontractor support services that have a low profit margin. The
contract supporting the R2 Program is scheduled to expire in January
2011.
ELD - ELD provides full life
cycle engineering, logistics, maintenance and refurbishment services to extend
and enhance the life of existing equipment. ELD supports the U.S. Army, Army
Reserve and Army National Guard with core competencies in combat and combat
service support system conversions, technical research, sustainment and
re-engineering, system integration and configuration management.
FSS - FSS provides worldwide
field maintenance and logistics support services for a wide variety of military
vehicles and equipment, including performance of organizational, intermediate
and specialized depot-level maintenance. FSS principally supports the U.S. Army
and Marine Corps by providing specialized Field Service Representatives (“FSR”)
and Field Support Teams (“FST”) in areas of combat operations and austere
environments.
SED - SED provides
comprehensive systems and software engineering, logistics, and prototyping
services to DoD. SED principally supports the U.S. Army, Air Force, and Marine
Corps combat and combat support systems. SED’s core competencies include:
systems technical support, configuration management and life cycle support for
wheeled and tracked vehicles and ground support equipment; obsolescence
management, service life extension, and technology insertion programs; and
technical documentation and data packages.
International
Group - Our International Group provides engineering, industrial,
logistics and foreign military sales services to the U.S. military and other
government agencies.
GLOBAL - Through GLOBAL, we
provide assistance to the U.S. Navy in executing its Foreign Military Sales
(“FMS”) Program for surface ships sold, leased or granted to foreign countries.
Global provides program management, engineering, technical support, logistics
services for ship reactivations and transfers and follow-on technical support.
The level of revenues and associated profits resulting from fee income generated
by this program varies depending on a number of factors, including the timing of
ship transfers and associated support services ordered by foreign governments
and economic conditions of potential customers worldwide. Changes in the level
of activity associated with the Navy’s ship transfer program have historically
caused quarterly and annual revenue fluctuations.
FMD - FMD provides field
engineering, logistics, maintenance, and information technology services to the
U.S. Navy and Air Force, including fleet-wide ship and aircraft support
programs. FMD’s expertise includes ship repair and modernization, ship systems
installations, ordnance engineering and logistics, facility operations, war
reserve materials management, aircraft sustainment and maintenance automation
and IT systems integration.
Treasury Seized
Asset Program – FMD also provides management, maintenance, storage and
disposal support for the U.S. Department of Treasury’s seized and forfeited
general property program. Our contract with the Department of Treasury to
support this program is a cost plus incentive fee contract that contains certain
conditions under which the incentive fee revenue is earned. The amount of
incentive fee earned depends on our costs incurred on the contract compared to
certain target cost levels specified in the contract. An assessment of actual
costs compared to target costs is made once annually pursuant to the contract.
We recognize incentive fee when the amount is fixed or determinable and
collectability is reasonably assured. Due to the conditions under which the
incentive fee for this contract is awarded, and to the potential for changes in
the cost targets as work requirements vary, the full amount of incentive fee for
the work we perform in any one period may not be fixed or determinable and the
collectability may not be reasonably assured until a subsequent period. The
current evaluation period ends on September 30, 2010.
IT,
Energy and Management Consulting Group – The IT, Energy and
Management Consulting Group provides technical and consulting services primarily
to various civilian government agencies.
Energetics - Energetics
provides technical, policy, business, and management support in areas of clean
and efficient energy, climate change mitigation, infrastructure protection,
measurement technology, and global health. Energetics’ expertise lies
in managing collaborative processes to bring together diverse stakeholders in
decision making, R&D program planning and evaluation metrics,
state-of-the-art technology assessments, technical and economic feasibility
analysis, and technical communications. Customers include the U.S. Department of
Energy, the U.S. Department of Homeland Security, U.S. Department of Commerce,
and other government agencies and commercial clients.
G&B – G&B is an
established information technology provider to many government agencies,
including the Departments of Homeland Security, Interior, Labor, Agriculture,
Housing and Urban Development, and Defense; the Social Security Administration;
the Pension Benefit Guaranty Corporation; and the National Institutes of Health.
G&B’s core expertise lies in enterprise architecture development,
information assurance/business continuity, program and portfolio management,
network IT services, systems design and integration, quality assurance services
and product and process improvement services.
Infrastructure
Group – ICRC is engaged principally in providing engineering and
transportation infrastructure services and construction management services
primarily to Federal Civilian agencies. ICRC’s largest contract is with the U.S.
Department of Transportation Maritime Administration for services performed on
the Port of Anchorage Intermodal Expansion Project in Alaska (the
"PIEP").
|
Concentration
of Revenues
|
||||||||||||||||
|
(in
thousands)
|
||||||||||||||||
|
For the three months ended March
31,
|
||||||||||||||||
|
2010
|
2009
|
|||||||||||||||
|
Source of Revenues
|
Revenues
|
%
|
Revenues
|
%
|
||||||||||||
|
CED
Army Equipment Support
|
$ | 0 | 0 | $ | 34,140 | 14 | ||||||||||
|
CED
Assured Mobility Systems
|
43,387 | 19 | 28,320 | 12 | ||||||||||||
|
RCV
Modernization
|
20,340 | 9 | 18,598 | 8 | ||||||||||||
|
CED
Other
|
24,101 | 10 | 41,693 | 17 | ||||||||||||
|
Total
CED
|
87,828 | 38 | 122,751 | 51 | ||||||||||||
|
GLOBAL
FMS
|
34,641 | 15 | 20,644 | 9 | ||||||||||||
|
Treasury
Seized Asset Program
|
11,299 | 5 | 9,343 | 4 | ||||||||||||
|
PIEP
Contract
|
8,007 | 4 | 4,951 | 2 | ||||||||||||
|
Other
|
86,401 | 38 | 82,766 | 34 | ||||||||||||
|
Total
Revenues
|
$ | 228,176 | 100 | $ | 240,455 | 100 | ||||||||||
Revenues
on the “Other” line in the table above include: 1) revenues in our Federal Group
from legacy sustainment equipment refurbishment services performed by our ELD
division and from work performed by our FSS and SED divisions on programs other
than the RCV Modernization Program; 2) revenues in our FMD division from
services provided on engineering and technical services task orders and from
work performed on the CFT Program; and 3) revenues from various contracts
performed in our IT, Energy and Management Consulting Group.
Management
Outlook
We have
made a strategic commitment to increase our direct labor revenue and diversify
our service offerings and customer base to improve our profit margins. We began
the year 2010 with 614 more employees than we began 2009, and we have continued
to add employees in the first quarter of 2010. The largest portion of our new
employees are engaged in work on DoD legacy systems sustainment services, an
area on which we believe DoD will continue to be focused in the near future. We
have also seen increases in the number of employees performing work for Federal
Civilian agencies. Revenue from work performed by our employees, or direct labor
revenue, typically has a higher profit margin than revenue generated by our
subcontractor work, which generally has little or no associated profit. Work
performed by our subcontractors that generated much of our revenue growth in
prior years has declined. While the decline in subcontractor work is expected to
result in flatter, or possibly lower, overall revenue levels in the near term,
we have begun to benefit from improved profit margins associated with our direct
labor revenue growth.
We are
augmenting our core base of DoD work by emphasizing growth in Federal Civilian
services. These efforts have included: 1) an emphasis on marketing our
Energetics subsidiary services that has shown favorable results, including an
increase in the number of Energetics employees and new contracts that will be
performed during the next three to five years; 2) an increase in our G&B
subsidiary employees and revenues during 2009 and the first quarter of 2010; 3)
an emphasis on marketing our ICRC subsidiary infrastructure services to a wider
range of clients; and 4) our continued commitment to grow through strategic
acquisitions of companies that perform work for Federal Civilian government
agencies. We expect these efforts directed toward the growth of our work in the
Federal Civilian marketplace to help offset potential declines in revenue from
subcontractor work. Concurrently, we will continue to pursue large DoD contracts
for which we have demonstrated proven expertise as those opportunities
arise.
We also
know there are risks and uncertainties related to our business. We recognize
that 2009 was a government transition year and government spending priorities
may continue to change significantly. There are indications of a shift in
government spending to more energy, IT-related infrastructure, physical
infrastructure, health care IT, and DoD legacy systems sustainment services. We
believe that our current capabilities have us well positioned to pursue these
opportunities.
The
government transition also has affected the timing of contract awards and the
funding process. The federal technical services industry experienced an
extraordinary delay in contract awards during the first year of the new
administration as it ensured these transactions were consistent with its
priorities. Additionally, the government workforce has experienced a loss of
qualified contracting personnel in recent years. While the government is seeking
to replace this personnel loss, we believe that this transition in the
government workforce may impact proposal decisions and delay funding of new and
ongoing contract efforts. At the same time, the administration is
redefining “inherently governmental work.” As a consequence, the
government is implementing a strategy of “in-sourcing” to move work from federal
contractors into the government.
Bookings
and Funded Backlog
Revenues
in our industry depend on contract funding (“bookings”) and funded contract
backlog is an indicator of potential future revenues. A summary of our bookings
and revenues for the three months ended March 31, 2010 and 2009, and funded
contract backlog as of March 31, 2010 and 2009 is as follows:
|
(in
millions)
|
|||
|
2010
|
2009
|
||
|
Bookings
|
$210
|
$232
|
|
|
Revenues
|
$228
|
$240
|
|
|
Funded
Backlog
|
$457
|
$555
|
|
Recent
Accounting Pronouncements
In
October 2009, the FASB revised its accounting guidance related to revenue
arrangements with multiple deliverables. The guidance relates to the
determination of when the individual deliverables included in a multiple-element
arrangement may be treated as separate units of accounting and modifies the
manner in which the transaction consideration is allocated across the individual
deliverables. Also, the guidance expands the disclosure requirements
for revenue arrangements with multiple deliverables. The guidance will be
effective for us beginning on January 1, 2011, and may be applied
retrospectively for all periods presented or prospectively to arrangements
entered into or materially modified after the adoption date. Early
adoption is permitted provided that the guidance is retroactively applied to the
beginning of the year of adoption. We are currently assessing the
potential effect the adoption of this new guidance will have, if any, on our
consolidated financial statements.
Critical
Accounting Policies
Our
consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which require us to make
estimates and assumptions. There have been no changes in our critical accounting
policies since December 31, 2009. Please refer to our Annual Report on Form 10-K
for the year ended December 31, 2009 filed with the SEC on March 4, 2010 for a
full discussion of our critical accounting policies.
Revenues
by Contract Type
Our
revenues by contract type were as follows (in thousands):
|
Three
Months
ended
March 31,
|
||||||||||||||||
|
Contract Type
|
2010
|
%
|
2009
|
%
|
||||||||||||
|
Cost-type
|
$ | 58,864 | 26 | $ | 41,108 | 17 | ||||||||||
|
Time
and materials
|
157,651 | 69 | 190,449 | 79 | ||||||||||||
|
Fixed-price
|
11,661 | 5 | 8,898 | 4 | ||||||||||||
| $ | 228,176 | 100 | $ | 240,455 | 100 | |||||||||||
A
significant portion of our time and materials revenues are from CED R2 Program
task orders under which revenues result primarily from the pass through of
subcontractor support services. These revenues have a lower profit margin than
revenues generated by work performed by our employees. Time and
materials revenues on the CED R2 Program for the three months ended March 31,
2010 and 2009 were approximately $124 million and $174 million,
respectively.
Results
of Operations
Our
results of operations are as follows (in thousands):
|
Three
Months
|
||||||||||||||||
|
ended
March 31,
|
||||||||||||||||
|
2010
|
2009
|
Change
|
%
|
|||||||||||||
|
Revenues
|
$ | 228,176 | $ | 240,455 | $ | (12,279 | ) | (5 | ) | |||||||
|
Contract
costs
|
219,227 | 232,809 | (13,582 | ) | (6 | ) | ||||||||||
|
Selling,
general and administrative expenses
|
298 | 202 | 96 | 48 | ||||||||||||
|
Operating
Income
|
8,651 | 7,444 | 1,207 | 16 | ||||||||||||
|
Interest
income, net
|
5 | 59 | (54 | ) | (92 | ) | ||||||||||
|
Income
before income taxes
|
8,656 | 7,503 | 1,153 | 15 | ||||||||||||
|
Provision
for income taxes
|
3,258 | 2,863 | 395 | 14 | ||||||||||||
|
Net
Income
|
$ | 5,398 | $ | 4,640 | $ | 758 | 16 | |||||||||
Our
revenues decreased approximately $12.3 million, or 5%, for the three months
ended March 31, 2010, as compared to the same period of 2009. Revenues in our
Federal Group declined while revenues increased in each of our other operating
groups during this period.
Our
operating income increased approximately $1.2 million, or approximately 16% for
the three months ended March 31, 2010, as compared to the same period of 2009.
Profits increased in each of our operating groups during this period.
Changes
in revenues and income are further discussed in the summaries of our group
results that follow.
Selling,
general and administrative expenses consist primarily of costs and expenses that
are not chargeable or reimbursable on our operating unit contracts. Changes in
these expenses for the three months ended March 31, 2010 as compared to the same
period of 2009 increased but are not significant in total.
Our
effective income tax rates for the three months ended March 31, 2010 and 2009
were 37.6% and 38.2%, respectively. The decrease in the effective tax rate is
the result of the reversal of our valuation allowance as of December 31, 2009,
of approximately $51 thousand.
Federal
Group Results
The
results of operations for our Federal Group are as follows (in
thousands):
|
Three
Months
|
||||||||||||||||
|
ended
March 31,
|
||||||||||||||||
|
2010
|
2009
|
Change
|
%
|
|||||||||||||
|
Revenues
|
$ | 129,766 | $ | 152,957 | $ | (23,191 | ) | (15 | ) | |||||||
|
Operating
Income
|
$ | 4,784 | $ | 4,498 | $ | 286 | 6 | |||||||||
|
Profit
percentage
|
3.7 | % | 2.9 | % | ||||||||||||
Revenues
for our Federal Group decreased approximately $23 million or 15% for the
three-month period ended March 31, 2010, as compared to the same period for the
prior year. However, operating income for our Federal Group increased
approximately $286 thousand, or 6% for the three-month period ended March 31,
2010 as compared to the same period for the prior year. The increase in profits
and associated profit margins is an indication of success in our efforts to
improve our financial performance by increasing our direct labor.
The
change in revenues for the three-month period resulted primarily from a decrease
in revenues associated with the expiration of the CED Army Equipment Support
Program under the R2 contract of approximately $34 million and an increase in
revenues from our FSS division services of approximately $13
million.
The
increase in operating income is primarily due to an increase in profits on our
FSS division work of approximately $2.3 million that is attributable to the
increased revenues in this division. This increase in profits was partially
offset by decreases in profits from our R2 Program of approximately $693
thousand and to decreases in profits on our ELD equipment refurbishment services
of approximately $1.3 million.
International
Group Results
The
results of operations for our International Group are as follows (in
thousands):
|
Three
Months
|
||||||||||||||||
|
ended
March 31,
|
||||||||||||||||
|
2010
|
2009
|
Change
|
%
|
|||||||||||||
|
Revenues
|
$ | 69,248 | $ | 64,156 | $ | 5,092 | 8 | |||||||||
|
Operating
Income
|
$ | 2,042 | $ | 1,838 | $ | 204 | 11 | |||||||||
|
Profit
percentage
|
2.9 | % | 2.9 | % | ||||||||||||
Revenues
for our International Group increased approximately $5 million or 8% for the
three-month period ended March 31, 2010, as compared to the same period for the
prior year. The increase in revenues resulted primarily from an increase in the
revenues of our GLOBAL Division revenues of approximately $14 million, an
increase in CFT Program revenues of approximately $2.3 million, and an increase
in Treasury Seized Asset Program revenues of approximately $2 million. These
increases were partially offset by a decline of approximately $13 million in
revenues from FMD services provided on engineering and technical services task
orders.
Operating
income for our International Group increased approximately $204 thousand, or 11%
for the three-month period ended March 31, 2010 as compared to the same period
for the prior year. The increase is primarily due to an increase in profits of
approximately $410 thousand from our GLOBAL Division work attributable to the
increase in revenues and to an increase in profits of approximately $325
thousand from work on the Treasury Seized Asset Program. These increases were
partially offset by a decline in profits of approximately $318 thousand
associated with the lower revenues from FMD services provided on engineering and
technical services task orders and to a decline in profits of approximately $195
thousand from the CFT Program.
IT,
Energy and Management Consulting Group Results
The
results of operations for our IT, Energy and Management Consulting Group are as
follows (in
thousands):
|
Three
Months
|
||||||||||||||||
|
ended
March 31,
|
||||||||||||||||
|
2010
|
2009
|
Change
|
%
|
|||||||||||||
|
Revenues
|
$ | 20,292 | $ | 16,705 | $ | 3,587 | 21 | |||||||||
|
Operating
Income
|
$ | 1,984 | $ | 1,175 | $ | 809 | 69 | |||||||||
|
Profit
percentage
|
9.8 | % | 7.0 | % | ||||||||||||
Revenues
for our IT, Energy and Management Consulting Group increased approximately $3.6
million or 21% for the three-month period ended March 31, 2010 as compared to
the same period for the prior year. The increase in revenues resulted from an
increase in the revenues of our Energetics subsidiary revenues of approximately
$1.9 million and an increase in our G&B subsidiary revenues of approximately
$1.7 million. Both of these subsidiaries have increased their direct labor
workforces as compared to the prior year, which has resulted in increased
revenues.
Operating
income for this segment increased approximately $809 thousand or 69% for the
three-month period ended March 31, 2010 as compared to the same period for the
prior year. The increase in operating income resulted primarily from increased
profits from our G&B work of approximately $503 thousand and from increased
profits from our Energetics work of approximately $227 thousand. The increased
profits are attributable to the increases in revenues and increased profit
margins in both subsidiaries.
Infrastructure
Group Results
The
results of operations for our Infrastructure Group are as follows (in
thousands):
|
Three
Months
|
||||||||||||||||
|
ended
March 31,
|
||||||||||||||||
|
2010
|
2009
|
Change
|
%
|
|||||||||||||
|
Revenues
|
$ | 8,870 | $ | 6,637 | $ | 2,233 | 34 | |||||||||
|
Operating
Income
|
$ | 281 | $ | 39 | $ | 242 | 621 | |||||||||
|
Profit
percentage
|
3.2 | % | 0.6 | % | ||||||||||||
This
segment consists of our ICRC subsidiary. Revenues for this group increased
approximately $2.2 million or 34% for the three-month period ended March 31,
2010 as compared to the same period for the prior year. Operating income for
this segment increased approximately $242 thousand or 621% for the three-month
period ended March 31, 2010 as compared to the same period for the prior year.
Both the increased revenues and increased operating income are primarily
attributable to increased revenues and profits on the PIEP, including an award
fee received on the PIEP of approximately $117 thousand in the first quarter of
2010.
Financial
Condition
Our
financial condition did not change materially in the first quarter of 2010.
Changes to asset and liability accounts were due primarily to our earnings, our
level of business activity, contract delivery schedules, subcontractor and
vendor payments required to perform our work, and the timing of associated
billings to and collections from our customers.
Liquidity
and Capital Resources
Cash
Flows
Cash and
cash equivalents decreased approximately $5.8 million during the first quarter
of 2010.
We used
approximately $7.2 million less cash in operating activities in the first three
months of 2010 as compared to the same period of 2009. This resulted from an
increase of approximately $758 thousand in cash provided by net income, an
increase of approximately $1 million from an increase in depreciation and
amortization and other non-cash operating activities, and a decrease of
approximately $5.4 million in cash used in operating activities due to changes
in the levels of working capital components. Of these working capital
components, our largest asset is our accounts receivable and our largest
liability is our accounts payable. A significant portion of our accounts
receivable and accounts payable result from the use of subcontractors to perform
work on our contracts and from the purchase of materials to fulfill our contract
requirements. Accordingly, our levels of accounts receivable and accounts
payable may fluctuate significantly depending on the timing of the government
services ordered, the timing of billings received from subcontractors and
materials vendors to fulfill these services, and the timing of payments received
from customers of the government in payment of these services. Such timing
differences may cause significant increases and decreases in our accounts
receivable and accounts payable in short time periods.
We used
approximately $2.6 million less cash in investing activities in the first three
months of 2010 as compared to the same period of 2009. Investing activities
consisted of purchases of property and equipment and the earn-out payment
associated with the acquisition of ICRC when certain financial performance
targets were achieved.
Cash of
approximately $258 thousand was used for financing activities in the first three
months of 2010 as compared to cash provided by financing activities of
approximately $14.9 million for the same period of 2009. This difference was
primarily the result of borrowing requirements on our bank loan in 2009 as
compared to no borrowing requirements in 2010.
We paid
quarterly cash dividends totaling $0.05 per share during the first quarter of
2010. Pursuant to our bank loan agreement, our payment of cash dividends is
subject to annual rate restrictions. We have paid cash dividends each year since
1973.
Liquidity
Our
internal sources of liquidity are primarily from operating activities,
specifically from changes in the level of revenues and associated accounts
receivable and accounts payable, and from profitability. Significant increases
or decreases in revenues and accounts receivable and accounts payable can cause
significant increases or decreases in internal liquidity. Our accounts
receivable and accounts payable levels can be affected by changes in the level
of the work we perform and by the timing of large materials purchases and
subcontractor efforts used in our contracts.
We also
purchase property and equipment and invest in expansion, improvement, and
maintenance of our operational and administrative facilities. From time to time,
we may also invest in the acquisition of other companies as we continue to seek
opportunities for growth.
Our
external liquidity consists of a loan agreement with a group of banks that
provides us with revolving loans and letters of credit. The maximum amount of
credit available to us as of March 31, 2010 was $50 million and under the loan
agreement we may elect to increase the maximum credit availability up to $75
million. The maturity date of the loan agreement is August 26, 2011. The
amount of credit available to us under the loan agreement is subject to certain
conditions, including a borrowing formula based on our billed receivables. Under
the terms of the loan agreement, we may borrow against the revolving loan at any
time and can repay the borrowings at any time without premium or penalty. We pay
a commitment fee, interest on any revolving loan borrowings at a prime-based
rate or an optional LIBOR-based rate, and fees on any letters of credit that are
issued.
We were
using approximately $4.9 million of the loan agreement availability as of March
31, 2010, consisting of letters of credit. We had no revolving loan amounts
outstanding as of March 31, 2010. During the first quarter of 2010, the highest
outstanding revolving loan amount was $16.5 million and the lowest was $0. The
timing of certain payments made and collections received associated with our
subcontractor and materials requirements and other operating expenses can cause
temporary peaks in our outstanding revolving loan amounts.
The loan
agreement contains collateral requirements that secure our assets, restrictive
covenants, a limit on annual dividends, and other affirmative and negative
covenants. Restrictive covenants include a maximum Leverage Ratio (Total Funded
Debt/EBITDA) and a minimum Fixed Charge Coverage Ratio that we were in
compliance with at March 31, 2010.
|
Maximum Ratio
|
Actual Ratio
|
|
|
Leverage
Ratio
|
3.00
to 1
|
0.13
to 1
|
|
Minimum Ratio
|
Actual Ratio
|
|
|
Fixed
Charge Coverage Ratio
|
1.25
to 1
|
3.32
to 1
|
Our banks
continue to maintain investment grade credit ratings from the ratings services
and we believe that we are well positioned to obtain financing from other banks
if the need should arise. Accordingly, we do not believe that turbulence in the
financial markets will have a material adverse impact on
our ability to finance our business, financial condition, or results of
operations. We currently do not use public debt security
financing.
Inflation
and Pricing
Most of
our contracts provide for estimates of future labor costs to be escalated for
any option periods, while the non-labor costs in our contracts are normally
considered reimbursable at cost. Our property and equipment consists principally
of computer systems equipment, furniture and fixtures, shop equipment, and land
and improvements. We do not expect the overall impact of inflation on
replacement costs of our property and equipment to be material to our future
results of operations or financial condition.
Disclosures
About Market Risk
Interest
Rates
Our bank
loan provides available borrowing to us at variable interest rates. The amount
borrowed is not large with respect to our cash flows and we believe that we will
be able to pay down any bank loan borrowings in a relatively short time frame.
Because of this, we do not believe that any adverse movement in interest rates
would have a material impact on future earnings or cash flows. If we were to
significantly increase our borrowings, future interest rate changes could
potentially have a material impact on us.
VSE
CORPORATION AND SUBSIDIARIES
See
“Disclosures About Market Risk” in Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations.
As of the
end of the period covered by this report, based on management's evaluation, with
the participation of our Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the disclosure controls and procedures (as defined in Rules
13a-15(e) or 15d - 15(e) under the Securities Exchange Act of 1934, as amended)
our Chief Executive Officer and Chief Financial Officer have concluded that our
disclosure controls and procedures are effective in ensuring that information
required to be disclosed by us in reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, and that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our principal executive and principal financial officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
There was
no change in our internal control over financial reporting during our first
quarter of fiscal 2010 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
VSE did
not purchase any of its equity securities during the period covered by this
report.
Under the
Registrant's bank loan agreement dividends may be paid in an annual
aggregate amount of $.60 per share, provided there is no default under the
loan agreement.
(a) Exhibits.
Exhibit
No.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
omitted all other items contained in "Part II. Other Information" because such
other items are not applicable or are not required if the answer is negative or
because the information required to be reported therein has been previously
reported.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
VSE
CORPORATION
|
|||
|
Date:
April 30,
2010
|
By:
|
/s/
M. A. Gauthier
|
|
|
M.
A. Gauthier
|
|||
|
Director,
Chief Executive Officer,
|
|||
|
President
and Chief Operating
|
|||
|
Officer
|
|
Date:
April 30,
2010
|
By:
|
/s/
T. R. Loftus
|
|
|
T.
R. Loftus
|
|||
|
Executive
Vice President and
|
|||
|
Chief
Financial Officer
|
|||
|
(Principal
Accounting Officer)
|
24