VSE Corporation Q3 FY2025 earnings call

• Announced acquisition of Aero 3, a diversified global Maintenance Repair and Overhaul service provider and parts distributor. Aero 3 has Wheel & Brake MRO services (approx 75% revenue), Distribution (approx 20% revenue), and Proprietary Solutions (approx 5% revenue). Total cash consideration is $350 million. - Organic growth initiatives: Kellstrom extended exclusive global distribution agreement, expanded strategic collaboration with Eaton, awarded global distribution agreement with Bridgestone Aircraft Tire, signed new long-term agreement for engine fuel unit repair, partnered with LuminUltra. - Strong execution in operating plan with progress on acquisition integrations and OEM license program implementation, leading to margin improvement.

In the third quarter of 2025, VSE's consolidated revenues increased 39% to $283 million. Consolidated adjusted EBITDA increased 58% to $47 million or 16.7% of revenue. VSE Aviation generated $283 million of revenue in the quarter, an increase of 39% over the prior year period. Distribution revenue increased 49% in the period, driven by balanced operational execution of new and existing programs, product line expansion, market share gains and strong contributions from the Kellstrom acquisition. MRO revenue increased 25% in the quarter, driven by higher-margin product mix, the addition of new repair capabilities, an increase from in-sourcing repair activity, strong end market demand and contributions from the Turbine Weld acquisition. Aviation adjusted EBITDA increased by 51% in the quarter to a record $50 million or 17.8% of revenue.

• Increased full year 2025 Aviation segment revenue growth guidance to 38% to 40% from prior 35% to 40%. - Raised 2025 full year Aviation adjusted EBITDA margin guidance to 17% to 17.25% from 16.5% to 17%. - Expect fourth quarter revenue to be flat to slightly down sequentially reflecting normal seasonality.

Actual results may differ significantly from forward-looking statements due to various risks and uncertainties, including those described in our periodic reports filed with the SEC.

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