Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 22, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | VSE CORP | |
Entity Central Index Key | 0000102752 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 10,970,123 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 760 | $ 162 |
Receivables, net | 74,012 | 60,004 |
Unbilled receivables, net | 45,961 | 41,255 |
Inventories, net | 197,213 | 166,392 |
Other current assets | 15,232 | 13,407 |
Total current assets | 333,178 | 281,220 |
Property and equipment, net | 44,216 | 49,606 |
Intangible assets, net | 147,921 | 94,892 |
Goodwill | 259,212 | 198,622 |
Operating lease right-of-use assets | 25,256 | |
Other assets | 16,992 | 14,488 |
Total assets | 826,775 | 638,828 |
Current liabilities: | ||
Current portion of long-term debt | 10,091 | 9,466 |
Accounts payable | 74,310 | 57,408 |
Current portion of earn-out obligation | 10,700 | 0 |
Accrued expenses and other current liabilities | 39,428 | 37,133 |
Dividends payable | 987 | 871 |
Total current liabilities | 135,516 | 104,878 |
Long-term debt, less current portion | 268,985 | 151,133 |
Deferred compensation | 17,201 | 17,027 |
Long-term lease obligations, less current portion | 0 | 18,913 |
Long-term operating lease liabilities | 25,716 | |
Earn-out obligation | 14,300 | 0 |
Deferred tax liabilities | 18,720 | 18,482 |
Total liabilities | 480,438 | 310,433 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Common stock, par value $0.05 per share, authorized 15,000,000 shares; issued and outstanding 10,970,123 and 10,886,036, respectively | 549 | 544 |
Additional paid-in capital | 29,411 | 26,632 |
Retained earnings | 317,652 | 301,073 |
Accumulated other comprehensive (loss) income | (1,275) | 146 |
Total stockholders' equity | 346,337 | 328,395 |
Total liabilities and stockholders' equity | $ 826,775 | $ 638,828 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, issued (in shares) | 10,970,123 | 10,970,123 |
Common stock, outstanding (in shares) | 10,886,036 | 10,886,036 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 189,111 | $ 170,394 | $ 359,030 | $ 347,291 |
Costs and operating expenses: | ||||
Selling, general and administrative expenses | 988 | 730 | 2,370 | 1,549 |
Amortization of intangible assets | 4,980 | 4,004 | 9,971 | 8,008 |
Total costs and operating expenses | 172,695 | 156,539 | 330,801 | 321,843 |
Operating income | 16,416 | 13,855 | 28,229 | 25,448 |
Interest expense, net | 3,398 | 2,182 | 6,556 | 4,357 |
Income before income taxes | 13,018 | 11,673 | 21,673 | 21,091 |
Provision for income taxes | 3,120 | 2,922 | 5,172 | 5,288 |
Net income | $ 9,898 | $ 8,751 | $ 16,501 | $ 15,803 |
Basic earnings per share (in dollars per share) | $ 0.90 | $ 0.80 | $ 1.51 | $ 1.45 |
Basic weighted average common shares outstanding (in shares) | 10,969,899 | 10,881,106 | 10,945,172 | 10,870,887 |
Diluted earnings per share (in dollars per share) | $ 0.89 | $ 0.80 | $ 1.50 | $ 1.45 |
Diluted weighted average shares outstanding (in shares) | 11,072,745 | 10,918,927 | 11,023,685 | 10,907,777 |
Dividends declared per share (in dollars per share) | $ 0.09 | $ 0.08 | $ 0.17 | $ 0.15 |
Products | ||||
Revenues: | ||||
Total revenues | $ 93,875 | $ 90,119 | $ 182,776 | $ 178,792 |
Costs and operating expenses: | ||||
Costs and operating expenses | 79,380 | 75,834 | 155,673 | 150,560 |
Services | ||||
Revenues: | ||||
Total revenues | 95,236 | 80,275 | 176,254 | 168,499 |
Costs and operating expenses: | ||||
Costs and operating expenses | $ 87,347 | $ 75,971 | $ 162,787 | $ 161,726 |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 9,898 | $ 8,751 | $ 16,501 | $ 15,803 |
Change in fair value of interest rate swap agreements, net of tax | (729) | 123 | (1,421) | 334 |
Other comprehensive (loss) income, net of tax | (729) | 123 | (1,421) | 334 |
Comprehensive income | $ 9,169 | $ 8,874 | $ 15,080 | $ 16,137 |
Unaudited Consolidated Statem_3
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 16,501 | $ 15,803 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 13,637 | 12,723 |
Deferred taxes | (312) | (888) |
Stock-based compensation | 1,982 | 1,676 |
Changes in operating assets and liabilities, net of impact of acquisitions: | ||
Receivables, net | (6,599) | 1,131 |
Unbilled receivables, net | (4,706) | 9,604 |
Inventories, net | (23,942) | (34,352) |
Other current assets and noncurrent assets | (3,914) | 4,227 |
Accounts payable and deferred compensation | 14,149 | (6,164) |
Accrued expenses and other current and noncurrent liabilities | (2,744) | (6,568) |
Long-term lease obligations | 0 | (816) |
Net cash provided by (used in) operating activities | 4,052 | (3,624) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (6,303) | (1,880) |
Proceeds from the sale of property and equipment | 4 | 46 |
Cash paid for acquisitions, net of cash acquired | (112,660) | 0 |
Net cash used in investing activities | (118,959) | (1,834) |
Cash flows from financing activities: | ||
Borrowings on loan agreement | 300,726 | 359,554 |
Repayments on loan agreement | (182,516) | (349,534) |
Payment of debt financing costs | 0 | (1,692) |
Payments on capital lease obligations | 0 | (707) |
Payments of taxes for equity transactions | (955) | (641) |
Dividends paid | (1,750) | (1,522) |
Net cash provided by financing activities | 115,505 | 5,458 |
Net increase in cash and cash equivalents | 598 | 0 |
Cash and cash equivalents at beginning of period | 162 | 624 |
Cash and cash equivalents at end of period | $ 760 | $ 624 |
Unaudited Consolidated Statem_4
Unaudited Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance, beginning balance (in shares) at Dec. 31, 2017 | 10,839,000 | ||||
Balance, beginning balance at Dec. 31, 2017 | $ 293,095 | $ 542 | $ 24,470 | $ 267,902 | $ 181 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 15,803 | 15,803 | |||
Stock-based compensation (in shares) | 42,000 | ||||
Stock-based compensation | 2,022 | $ 2 | 2,020 | ||
Other comprehensive income (loss), net of tax | 334 | 334 | |||
Dividends declared | (1,633) | (1,633) | |||
Balance, ending balance (in shares) at Jun. 30, 2018 | 10,881,000 | ||||
Balance, ending balance at Jun. 30, 2018 | 311,316 | $ 544 | 26,490 | 283,767 | 515 |
Balance, beginning balance (in shares) at Mar. 31, 2018 | 10,881,000 | ||||
Balance, beginning balance at Mar. 31, 2018 | 303,313 | $ 544 | 26,490 | 275,887 | 392 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 8,751 | 8,751 | |||
Other comprehensive income (loss), net of tax | 123 | 123 | |||
Dividends declared | (871) | (871) | |||
Balance, ending balance (in shares) at Jun. 30, 2018 | 10,881,000 | ||||
Balance, ending balance at Jun. 30, 2018 | $ 311,316 | $ 544 | 26,490 | 283,767 | 515 |
Balance, beginning balance (in shares) at Dec. 31, 2018 | 10,886,036 | 10,886,000 | |||
Balance, beginning balance at Dec. 31, 2018 | $ 328,395 | $ 544 | 26,632 | 301,073 | 146 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 16,501 | 16,501 | |||
Stock-based compensation (in shares) | 84,000 | ||||
Stock-based compensation | 2,784 | $ 5 | 2,779 | ||
Other comprehensive income (loss), net of tax | (1,421) | (1,421) | |||
Dividends declared | $ (1,866) | (1,866) | |||
Balance, ending balance (in shares) at Jun. 30, 2019 | 10,886,036 | 10,970,000 | |||
Balance, ending balance at Jun. 30, 2019 | $ 346,337 | $ 549 | 29,411 | 317,652 | (1,275) |
Balance, beginning balance (in shares) at Mar. 31, 2019 | 10,950,000 | ||||
Balance, beginning balance at Mar. 31, 2019 | 337,531 | $ 547 | 28,788 | 308,742 | (546) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 9,898 | 9,898 | |||
Stock-based compensation (in shares) | 20,000 | ||||
Stock-based compensation | 625 | $ 2 | 623 | ||
Other comprehensive income (loss), net of tax | (729) | (729) | |||
Dividends declared | $ (988) | (988) | |||
Balance, ending balance (in shares) at Jun. 30, 2019 | 10,886,036 | 10,970,000 | |||
Balance, ending balance at Jun. 30, 2019 | $ 346,337 | $ 549 | $ 29,411 | $ 317,652 | $ (1,275) |
Unaudited Consolidated Statem_5
Unaudited Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Dividends declared per share (in dollars per share) | $ 0.09 | $ 0.08 | $ 0.17 | $ 0.15 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | Nature of Business and Basis of Presentation Our accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and the instructions to SEC Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, such financial statements do not include all of the information and footnotes required by U.S. GAAP 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 and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019 . For further information refer to the consolidated financial statements and footnotes thereto included in our 2018 Form 10-K. The preparation of financial statements in conformity with U.S. GAAP requires us 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. Significant estimates affecting the financial statements include accruals for contract disallowance reserves, award fee revenues, costs to complete on fixed price contracts, recoverability of goodwill and intangible assets, and earn-out obligations. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard is required to be adopted using a modified retrospective method and is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB provided an alternative transition method of adoption through ASU No. 2018-11, Targeted Improvements , which provides entities with an optional transition method to apply the transition provisions of ASU 2016-02 at the beginning of the period of adoption. On January 1, 2019, we adopted ASC 842 using the alternative transition method provided by ASU 2018-11 recording right-of-use assets and lease liabilities for our existing leases as of January 1, 2019, as well as a cumulative-effect adjustment to retained earnings of initially applying the new standard as of January 1, 2019. We have elected the package of practical expedients permitted under the transition guidance, which does not require reassessment of prior conclusions related to lease identification, lease classification, and treatment for initial direct lease costs. We have not elected the practical expedients pertaining to the use of hindsight and land easements. The adoption of new lease standard resulted in the recharacterization of our headquarters lease, which was accounted for using the financing method under previously existing build-to-suit accounting rules, to an operating lease under ASC 842. Upon adoption of the new lease standard on January 1, 2019, we recorded a right-of-use asset of $24.3 million , property and equipment of $2.8 million , and operating lease liability of $29.6 million , with immaterial changes to other balance sheet accounts. The recharacterization resulted in a cumulative-effect adjustment to retained earnings of approximately $1.9 million , net of taxes, as of January 1, 2019. The new standard did not have a significant impact on our consolidated results of operations or cash flows. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On January 10, 2019, our wholly owned subsidiary VSE Aviation, Inc. ("VSE Aviation") acquired 100% of the equity of 1st Choice Aerospace Inc. ("1st Choice Aerospace"), a provider of maintenance, repair and overhaul ("MRO") services and products for new generation and legacy commercial aircraft. 1st Choice Aerospace has operations in Florida and Kentucky. We have retained key members of 1st Choice Aerospace's management team under three -year employment contracts with five -year non-compete covenants. The initial purchase consideration paid at closing for 1st Choice Aerospace was approximately $113 million , which included $1.1 million as an estimated net working capital adjustment. We will also be required to make earn-out payments of up to $40 million if 1st Choice Aerospace meets certain financial targets during 2019 and 2020. Approximately $1.1 million of our closing payments was deposited into an escrow account to secure the sellers' indemnification obligations. Any amount remaining in such escrow account at the end of the indemnification period less any then pending indemnification claims will be distributed to the sellers. 1st Choice Aerospace's results of operations are included in our Aviation Group in the accompanying unaudited consolidated financial statements beginning on the acquisition date of January 10, 2019. 1st Choice Aerospace had unaudited revenues of approximately $27.3 million and operating income of approximately $5.9 million before amortization of intangible assets of approximately $2.0 million and allocated corporate costs of approximately $780 thousand from the acquisition date through June 30, 2019. We are in the process of finalizing our valuation of the 1st Choice Aerospace assets acquired and liabilities assumed. The fair values assigned to our 1st Choice Aerospace earn-out obligation and intangible assets acquired were based on preliminary estimates, assumptions, and other information compiled by management, including independent valuations that utilized established valuation techniques. Therefore, these provisional amounts are subject to change as we complete the valuations throughout the measurement period, which will extend throughout 2019. Based on our preliminary valuation, the total estimated purchase price has been allocated to assets acquired (including identifiable intangible assets and goodwill) and liabilities assumed, as follows (in thousands): Description Fair Value Cash $ 396 Accounts receivable 7,409 Inventories 6,879 Prepaid expenses and other current assets 382 Property and equipment 4,044 Intangibles - customer related 55,000 Intangibles - trade name 8,000 Goodwill 60,590 Operating lease right-of-use assets 2,643 Other assets 333 Other current liabilities (5,244 ) Long-term operating lease liabilities (2,376 ) $ 138,056 Cash consideration $ 113,056 Acquisition date estimated fair value of earn-out obligation 25,000 Total $ 138,056 The estimated value attributed to customer relationships is being amortized on a straight-line basis using weighted average useful lives of 17 years . The estimated value attributed to trade name is being amortized on a straight-line basis over nine years . The preliminary amount of goodwill recorded for our 1st Choice Aerospace acquisition was approximately $61 million , all of which is expected to be amortizable for income tax purposes. The goodwill recognized reflects the strategic advantage of expanding our sustainment services into the aviation supply chain market. We incurred approximately $154 thousand and $408 thousand of acquisition-related expenses during the three months and six months ended June 30, 2019, respectively which are included in selling, general and administrative expenses. The following VSE consolidated pro forma results are prepared as if the 1st Choice Aerospace acquisition had occurred on January 1, 2018. This information is for comparative purposes only and does not necessarily reflect the results that would have occurred or may occur in the future. The unaudited consolidated pro forma results of operations are as follows (in thousands except per share amounts): Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Revenue $ 189,111 $ 181,569 $ 360,589 $ 368,988 Net Income $ 10,025 $ 8,870 $ 17,064 $ 16,171 Basic earnings per share $ 0.92 $ 0.82 $ 1.56 $ 1.49 Diluted earnings per share $ 0.91 $ 0.81 $ 1.55 $ 1.48 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregated Revenue Our revenues are derived from contract services performed for the United States Postal Service ("USPS"), United States Department of Defense ("DoD") agencies or federal civilian agencies and from the delivery of products to our clients. Our customers also include various other government agencies and commercial entities. A summary of revenues for our operating groups by customer for the three and six months ended June 30, 2019 are as follows (in thousands): Three months ended June 30, 2019 Customer Supply Chain Management Aviation Federal Services Total USPS $ 42,112 $ — $ — $ 42,112 DoD 6,461 260 68,359 75,080 Commercial 5,090 54,086 — 59,176 Other government 142 651 11,950 12,743 $ 53,805 $ 54,997 $ 80,309 $ 189,111 Six months ended June 30, 2019 Customer Supply Chain Management Aviation Federal Services Total USPS $ 84,795 $ — $ — $ 84,795 DoD 11,303 1,155 125,323 137,781 Commercial 9,070 102,561 1,104 112,735 Other government 341 651 22,727 23,719 $ 105,509 $ 104,367 $ 149,154 $ 359,030 A summary of revenues for our operating groups by customer for the three and six months ended June 30, 2018 are as follows (in thousands): Three months ended June 30, 2018 Customer Supply Chain Management Aviation Federal Services Total USPS $ 43,089 $ — $ — $ 43,089 DoD 7,525 1,025 73,637 82,187 Commercial 3,413 34,037 31 37,481 Other government 236 742 6,659 7,637 $ 54,263 $ 35,804 $ 80,327 $ 170,394 Six months ended June 30, 2018 Customer Supply Chain Management Aviation Federal Services Total USPS $ 87,120 $ — $ — $ 87,120 DoD 15,701 2,240 151,899 169,840 Commercial 6,799 65,572 233 72,604 Other government 507 742 16,478 17,727 $ 110,127 $ 68,554 $ 168,610 $ 347,291 A summary of revenues for our operating groups by contract type for the three and six months ended June 30, 2019 are as follows (in thousands): Three months ended June 30, 2019 Contract Type Supply Chain Management Aviation Federal Services Total Cost-type $ — $ 169 $ 33,496 $ 33,665 Fixed-price 53,805 25,056 19,153 98,014 Time and materials — 29,772 27,660 57,432 Total revenues $ 53,805 $ 54,997 $ 80,309 $ 189,111 Six months ended June 30, 2019 Contract Type Supply Chain Management Aviation Federal Services Total Cost-type $ — $ 381 $ 61,336 $ 61,717 Fixed-price 105,509 48,992 39,020 193,521 Time and materials — 54,994 48,798 103,792 Total revenues $ 105,509 $ 104,367 $ 149,154 $ 359,030 A summary of revenues for our operating groups by contract type for the three and six months ended June 30, 2018 are as follows (in thousands): Three months ended June 30, 2018 Contract Type Supply Chain Management Aviation Federal Services Total Cost-type $ — $ 701 $ 41,801 $ 42,502 Fixed-price 54,263 19,869 17,204 91,336 Time and materials — 15,234 21,322 36,556 Total revenues $ 54,263 $ 35,804 $ 80,327 $ 170,394 Six months ended June 30, 2018 Contract Type Supply Chain Management Aviation Federal Services Total Cost-type $ — $ 1,098 $ 92,922 $ 94,020 Fixed-price 110,127 39,373 32,343 181,843 Time and materials — 28,083 43,345 71,428 Total revenues $ 110,127 $ 68,554 $ 168,610 $ 347,291 Contract Balances Billed receivables, unbilled receivables (contract assets), and contract liabilities are the results of revenue recognition, customer billing, and timing of payment receipts. Billed receivables, net, represent unconditional rights to consideration under the terms of the contract and include amounts billed and currently due from our customers. Unbilled receivables represent our right to consideration in exchange for goods or services that we have transferred to the customer prior to us having the right to payment for such goods or services. Contract liabilities are recorded when customers remit contractual cash payments in advance of us satisfying related performance obligations under contractual arrangements, including those with performance obligations to be satisfied over a period of time. We present our unbilled receivables and contract liabilities on a contract-by-contract basis. If a contract liability exists, it is netted against the unbilled receivables balance for that contract. Unbilled receivables increased from $41.3 million at December 31, 2018 to $46.0 million at June 30, 2019 , primarily due to revenue recognized in excess of billings. Contract liabilities, which are included in accrued expenses and other current liabilities in our consolidated balance sheet, decreased from $5.0 million at December 31, 2018 to $4.9 million at June 30, 2019 , primarily due to revenue recognized in excess of advance payments received. For the six months ended June 30, 2019 and June 30, 2018, we recognized revenue that was previously included in the beginning balance of contract liabilities of $2.0 million and $7.7 million , respectively. Performance Obligations Our performance obligations are satisfied over time as work progresses or at a point in time. Revenues from products and services transferred to customers over time accounted for approximately 57% of our revenues for the three and six months ended June 30, 2019 and June 30, 2018, primarily related to revenues in our Federal Services Group and for MRO services in our Aviation Group. Revenues from products and services transferred to customers at a point in time accounted for approximately 43% of our revenues for the three and six months ended June 30, 2019 and June 30, 2018. The majority of our revenue recognized at a point in time is for the sale of vehicle and aircraft parts in our Supply Chain Management and Aviation groups. As of June 30, 2019 , the aggregate amount of transaction prices allocated to unsatisfied or partially unsatisfied performance obligations was $269 million . Performance obligations expected to be satisfied within one year and greater than one year are 97% and 3% , respectively. We have applied the practical expedient for certain parts sales and MRO services to exclude the amount of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which we recognize revenue in proportion to the amount we have the right to invoice for services performed. During the six months ended June 30, 2019 and June 30, 2018, revenue recognized from performance obligations satisfied in prior periods was not material. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following (in thousands): June 30, December 31, 2019 2018 Bank credit facility - term loan $ 75,800 $ 80,800 Bank credit facility - revolver loans 205,144 81,934 Principal amount of long-term debt 280,944 162,734 Less debt issuance costs (1,868 ) (2,135 ) Total long-term debt 279,076 160,599 Less current portion (10,091 ) (9,466 ) Long-term debt, net of current portion $ 268,985 $ 151,133 We have a loan agreement with a group of banks to provide working capital, letters of credit and acquisition financing. The loan agreement, which was amended in January 2018 and expires in January 2023 , has a term loan facility and a revolving loan facility. The revolving loan facility provides for revolving loans and letters of credit. Financing costs associated with the loan agreement amendment of approximately $1.5 million were capitalized and are being amortized over the five -year life of the loan. The fair value of outstanding debt as of June 30, 2019 under our bank loan facilities approximates its carrying value using Level 2 inputs based on market data on companies with a corporate rating similar to ours that have recently priced credit facilities. Our required term loan payments after June 30, 2019 are as follows (in thousands): 2019 $ 5,000 2020 11,875 2021 14,375 2022 15,000 2023 29,550 Total $ 75,800 The maximum amount of credit available to us under the loan agreement for revolving loans and letters of credit as of June 30, 2019 was $300 million . Subject to the terms of the loan agreement, we may borrow and repay the revolving loan borrowings as our cash flows require or permit. We pay an unused commitment fee and fees on letters of credit that are issued. We had $18 thousand and $57 thousand in letters of credit outstanding as of June 30, 2019 and December 31, 2018 , respectively. Under the loan agreement we may elect to increase the maximum availability of the term loan facility, the revolving loan facility, or both facilities, up to an aggregate additional amount of $100 million . We pay interest on the term loan borrowings and revolving loan borrowings at LIBOR plus a base margin or at a base rate (typically the prime rate) plus a base margin. As of June 30, 2019 , the LIBOR base margin was 2.50% and the base rate base margin was 1.25% . The base margins increase or decrease in increments as our Total Funded Debt/EBITDA Ratio increases or decreases, respectively. The loan agreement requires us to have interest rate hedges on a portion of the outstanding term loan for the first three years after the January 2018 amendment date of the agreement. To mitigate the risks associated with future interest rate movements we have employed interest rate hedges to fix the rate on a portion of our outstanding borrowings for various periods. We executed interest rate swap agreements in February 2019 and February 2018. The notional amount of the interest rate swap agreements was $125 million and $50 million as of June 30, 2019 and December 31, 2018 , respectively. After taking into account the impact of interest rate swap agreements, as of June 30, 2019 , interest rates on portions of our outstanding debt ranged from 4.89% to 6.75% , and the effective interest rate on our aggregate outstanding debt was 5.16% . Interest expense incurred on bank loan borrowings and interest rate hedges was approximately $3.4 million and $1.7 million for the three months ended June 30, 2019 and 2018 , respectively. Interest expense incurred on bank loan borrowings and interest rate hedges was approximately $6.3 million and $3.2 million for the six months ended June 30, 2019 and 2018, respectively. The loan agreement contains collateral requirements to secure our loan agreement obligations, restrictive covenants, a limit on annual dividends, and other affirmative and negative covenants, conditions, and limitations. Restrictive covenants include a maximum Total Funded Debt/EBITDA Ratio and a minimum Fixed Charge Coverage Ratio. We were in compliance with required ratios and other terms and conditions at June 30, 2019 . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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. Our calculation of diluted earnings per common share includes the dilutive effects for an assumed vesting of restricted stock awards. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Basic weighted average common shares outstanding 10,969,899 10,881,106 10,945,172 10,870,887 Effect of dilutive shares 102,846 37,821 78,513 36,890 Diluted weighted average common shares outstanding 11,072,745 10,918,927 11,023,685 10,907,777 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases We determine at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use ("ROU") asset and lease liability based on the present value of the future lease payments over the lease term. Substantially all of our leases are long-term operating leases for facilities with fixed payment terms between two and 15 years . Our operating lease ROU assets are recorded in operating lease right-of-use assets on our accompanying unaudited consolidated balance sheet. The current portion of operating lease liabilities are presented within accrued expenses and other current liabilities, and the non-current portion of operating lease liabilities are presented under long-term operating lease liabilities on our accompanying unaudited consolidated balance sheet. For leases with terms greater than 12 months, we record the related asset and lease liability at the present value of lease payments over the lease term. Leases with an initial term of 12 months or less with purchase options or extension options that are not reasonably certain to be exercised are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the term of the lease. Our lease cost for the three and six months ended June 30, 2019 included the following components (in thousands): Three months Six months Operating lease cost $ 1,625 $ 3,250 Short-term lease cost 175 299 Less: sublease income (251 ) (540 ) Total lease cost, net $ 1,549 $ 3,009 Certain of our leases include options to extend the term of the lease or to terminate the lease. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purposes of determining total future lease payments. Our lease agreements do not provide a readily determinable implicit rate nor is it available to us from our lessors. Instead, we estimate our incremental borrowing rate based on information available at lease commencement in order to discount lease payments to present value. The table below summarizes future minimum lease payments under operating leases, recorded on the balance sheet, as of June 30, 2019 (in thousands): Operating Leases Last six months of 2019 $ 2,439 2020 5,384 2021 5,088 2022 5,112 2023 4,790 After 2023 14,149 Minimum lease payments 36,962 Less: imputed interest (7,078 ) Present value of minimum lease payments 29,884 Less: current maturities of lease liabilities (4,168 ) Long-term lease liabilities $ 25,716 We made cash payments of approximately $3.2 million for operating leases during the six months ended June 30, 2019 , which are included in cash flows from operating activities in our unaudited consolidated statement of cash flows. The weighted average remaining lease term and discount rate for our operating leases were approximately 7.0 years and 6.0% , respectively at June 30, 2019 . As of June 30, 2019 , we have additional future payments on a lease that has not yet commenced of approximately $300 thousand . This lease will commence in 2019 and has a lease term of approximately three years . Contingencies On or about April 19, 2018 Joseph Waggoner, on behalf of himself and all similarly situated individuals, filed a lawsuit against VSE and two of our subcontractors in the United State District Court, Eastern District of Texas, Texarkana Division, alleging overtime compensation entitlement at a rate of one and one-half times their regular rate of pay for all hours worked over 40 hours in a workweek. The plaintiffs are seeking to certify the case as a collective action for similarly situated individuals. The plaintiffs work under a contract between defendants and the United States Army at the Red River Army Depot in Texas. The plaintiffs assert that employees' 15-minute unpaid work breaks should have been included as "working hours" in calculating overtime. We believe it is probable that VSE will incur a loss related to this matter. We have accrued a loss provision for this matter, which represents our reasonable estimate related to a possible unfavorable settlement. While we do not believe that we will have any additional liability that is material, there can be no guaranty that the ultimate resolution will not result in an additional liability that is material. Other Matters In addition to the above-referenced legal proceeding, we may have certain claims in the normal course of business, including legal proceedings, against us and against other parties. In our opinion, the resolution of these other claims will not have a material adverse effect on our results of operations, financial position or cash flows. However, because the results of any legal proceedings cannot be predicted with certainty, the amount of loss, if any, cannot be reasonably estimated. Further, from time-to-time, government agencies investigate whether our operations are being conducted in accordance with applicable contractual and regulatory requirements. Government investigations of us, whether relating to government contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon us, or could lead to suspension or debarment from future government contracting. Government investigations often take years to complete and many result in no adverse action against us. We believe, based upon current information, that the outcome of any such government disputes and investigations will not have a material adverse effect on our results of operations, financial condition or cash flows. |
Business Segments and Customer
Business Segments and Customer Information | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Business Segments and Customer Information | Business Segments and Customer Information Business Segments Management of our business operations is conducted under three reportable operating segments: Supply Chain Management Group – Our Supply Chain Management Group supplies vehicle parts primarily through a Managed Inventory Program ("MIP") and direct sales to the United States Postal Service ("USPS"), the United States Department of Defense ("DoD") and to commercial customers. Aviation Group – Our Aviation Group provides maintenance, repair and overhaul ("MRO") services, parts supply and distribution, and supply chain solutions for commercial aerospace and business and general aviation jet aircraft engines and engine accessories. Federal Services Group – Our Federal Services Group provides engineering, industrial, logistics, foreign military sales, legacy equipment sustainment services, IT and technical and consulting services primarily to DoD and other government agencies. The operating segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by our Chief Executive Officer in deciding how to allocate resources and in assessing performance. We evaluate segment performance based on consolidated revenues and operating income. Net sales of our business segments exclude intersegment sales as these activities are eliminated in consolidation. Our segment information is as follows (in thousands): Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Revenues: Supply Chain Management Group $ 53,805 $ 54,263 $ 105,509 $ 110,127 Aviation Group 54,997 35,804 104,367 68,554 Federal Services Group 80,309 80,327 149,154 168,610 Total revenues $ 189,111 $ 170,394 $ 359,030 $ 347,291 Operating income: Supply Chain Management Group $ 7,557 $ 8,168 $ 14,545 $ 15,764 Aviation Group 5,204 2,846 8,252 5,107 Federal Services Group 5,059 3,606 8,444 6,084 Corporate/unallocated expenses (1,404 ) (765 ) (3,012 ) (1,507 ) Operating income $ 16,416 $ 13,855 $ 28,229 $ 25,448 Customer Information Our revenues by customer is as follows (dollars in thousands): Three months ended June 30, Six months ended June 30, Customer 2019 % 2018 % 2019 % 2018 % USPS $ 42,112 22.3 % $ 43,089 25.3 % $ 84,795 23.6 % $ 87,120 25.1 % U.S. Navy 22,202 11.8 % 35,696 20.9 % 42,807 11.9 % 78,281 22.5 % U.S. Army 47,333 25.0 % 41,548 24.4 % 84,052 23.4 % 84,335 24.3 % U.S. Air Force 5,545 2.9 % 4,943 2.9 % 10,922 3.1 % 7,224 2.1 % Total - DoD 75,080 39.7 % 82,187 48.2 % 137,781 38.4 % 169,840 48.9 % Commercial aviation 54,086 28.6 % 34,037 20.0 % 102,561 28.6 % 65,572 18.9 % Other commercial 5,090 2.7 % 3,444 2.0 % 10,174 2.8 % 7,032 2.0 % Total - Commercial 59,176 31.3 % 37,481 22.0 % 112,735 31.4 % 72,604 20.9 % Other government 12,743 6.7 % 7,637 4.5 % 23,719 6.6 % 17,727 5.1 % Total $ 189,111 100 % $ 170,394 100 % $ 359,030 100 % $ 347,291 100 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Changes in goodwill for the six months ended June 30, 2019 are as follows (in thousands): Supply Chain Management Federal Services Aviation Total Balance as of December 31, 2018 $ 63,190 $ 30,883 $ 104,549 $ 198,622 Increase from acquisition — — 60,590 60,590 Balance as of June 30, 2019 $ 63,190 $ 30,883 $ 165,139 $ 259,212 Intangible assets consist of the value of contract and customer-related intangible assets, acquired technologies and trade names. Amortization expense was approximately $5.0 million and $10.0 million for the three and six months ended June 30, 2019 , respectively, and $4.0 million and $8.0 million for the three and six months ended June 30, 2018 , respectively. Intangible assets, net were comprised of the following (in thousands): Cost Accumulated Amortization Accumulated Impairment Loss Net Intangible Assets June 30, 2019 Contract and customer-related $ 228,094 $ (94,185 ) $ (1,025 ) $ 132,884 Acquired technologies 12,400 (9,096 ) — 3,304 Trade names 24,670 (12,937 ) — 11,733 Total $ 265,164 $ (116,218 ) $ (1,025 ) $ 147,921 December 31, 2018 Contract and customer-related $ 173,094 $ (86,076 ) $ (1,025 ) $ 85,993 Acquired technologies 12,400 (8,533 ) — 3,867 Trade names 16,670 (11,638 ) — 5,032 Total $ 202,164 $ (106,247 ) $ (1,025 ) $ 94,892 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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. The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 and the level they fall within the fair value hierarchy (in thousands): Amounts Recorded at Fair Value Financial Statement Classification Fair Value Hierarchy Fair Value June 30, 2019 Fair Value December 31, 2018 Non-COLI assets held in Deferred Supplemental Compensation Plan Other assets Level 1 $ 611 $ 403 Interest rate swap agreements Accrued expenses/Other current assets Level 2 $ 1,699 $ 195 Earn-out obligation - short-term Current portion of earn-out obligation Level 3 $ 10,700 $ — Earn-out obligation - long-term Earn-out obligation Level 3 $ 14,300 $ — Non-COLI assets held in our deferred supplemental compensation plan consist of equity funds with fair value based on observable inputs such as quoted prices for identical assets in active markets and changes in fair value are recorded as selling, general and administrative expenses. We account for our interest rate swap agreements under the provisions of ASC 815, Derivatives and Hedging , and have determined that our swap agreements qualify as highly effective cash flow hedges. The fair value of the swap agreements, which is a liability of approximately $1.7 million , has been reported in accrued expenses at June 30, 2019 . The fair value of the swap agreements, which was an asset of approximately $195 thousand , was reported in other current assets at December 31, 2018 . The offset, net of an income tax effect of approximately $424 thousand and $49 thousand , was included in accumulated other comprehensive income in the accompanying balance sheets as of June 30, 2019 and December 31, 2018 , respectively. The amounts paid and received on the swap agreements are recorded in interest expense in the period during which the related floating-rate interest is incurred. We determine the fair value of the swap agreements based on a valuation model using primarily observable market data inputs. We utilized an income approach to determine the fair value of our 1st Choice Aerospace acquisition earn-out obligation. Significant unobservable inputs used to value the contingent consideration include projected revenue and cost of services and the discount rate. If a significant increase or decrease in the discount rate occurred in isolation, the result could be significantly higher or lower fair value measurement. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate was 24.0% and 23.9% for the three and six months ended June 30, 2019 , respectively, and 25.0% and 25.1% for the three and six months ended June 30, 2018, respectively. Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete items that are recorded in the period in which they occur. Our tax rate is affected by discrete items that may occur in any given year, but may not be consistent from year to year. The lower effective tax rate for the six months ended June 30, 2019 primarily results from the fair value increase of approximately $1.6 million to our COLI assets. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements Not Yet Adopted | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. The new standard is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We currently are assessing the impact that this standard will have on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in cloud computing arrangements. The new standard is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We currently are assessing the impact that this standard will have on our consolidated financial statements. |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | Our accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and the instructions to SEC Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, such financial statements do not include all of the information and footnotes required by U.S. GAAP 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 and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019 . For further information refer to the consolidated financial statements and footnotes thereto included in our 2018 Form 10-K. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires us 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. Significant estimates affecting the financial statements include accruals for contract disallowance reserves, award fee revenues, costs to complete on fixed price contracts, recoverability of goodwill and intangible assets, and earn-out obligations. |
Recently Adopted Accounting Pronouncements, Significant Accounting Policies Update, and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The new standard is required to be adopted using a modified retrospective method and is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB provided an alternative transition method of adoption through ASU No. 2018-11, Targeted Improvements , which provides entities with an optional transition method to apply the transition provisions of ASU 2016-02 at the beginning of the period of adoption. On January 1, 2019, we adopted ASC 842 using the alternative transition method provided by ASU 2018-11 recording right-of-use assets and lease liabilities for our existing leases as of January 1, 2019, as well as a cumulative-effect adjustment to retained earnings of initially applying the new standard as of January 1, 2019. We have elected the package of practical expedients permitted under the transition guidance, which does not require reassessment of prior conclusions related to lease identification, lease classification, and treatment for initial direct lease costs. We have not elected the practical expedients pertaining to the use of hindsight and land easements. The adoption of new lease standard resulted in the recharacterization of our headquarters lease, which was accounted for using the financing method under previously existing build-to-suit accounting rules, to an operating lease under ASC 842. Upon adoption of the new lease standard on January 1, 2019, we recorded a right-of-use asset of $24.3 million , property and equipment of $2.8 million , and operating lease liability of $29.6 million , with immaterial changes to other balance sheet accounts. The recharacterization resulted in a cumulative-effect adjustment to retained earnings of approximately $1.9 million , net of taxes, as of January 1, 2019. The new standard did not have a significant impact on our consolidated results of operations or cash flows. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. The new standard is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We currently are assessing the impact that this standard will have on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in cloud computing arrangements. The new standard is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. We currently are assessing the impact that this standard will have on our consolidated financial statements. |
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. Our calculation of diluted earnings per common share includes the dilutive effects for an assumed vesting of restricted stock awards. |
Business Segments | Business Segments Management of our business operations is conducted under three reportable operating segments: Supply Chain Management Group – Our Supply Chain Management Group supplies vehicle parts primarily through a Managed Inventory Program ("MIP") and direct sales to the United States Postal Service ("USPS"), the United States Department of Defense ("DoD") and to commercial customers. Aviation Group – Our Aviation Group provides maintenance, repair and overhaul ("MRO") services, parts supply and distribution, and supply chain solutions for commercial aerospace and business and general aviation jet aircraft engines and engine accessories. Federal Services Group – Our Federal Services Group provides engineering, industrial, logistics, foreign military sales, legacy equipment sustainment services, IT and technical and consulting services primarily to DoD and other government agencies. The operating segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by our Chief Executive Officer in deciding how to allocate resources and in assessing performance. We evaluate segment performance based on consolidated revenues and operating income. Net sales of our business segments exclude intersegment sales as these activities are eliminated in consolidation. |
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. |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisition | Based on our preliminary valuation, the total estimated purchase price has been allocated to assets acquired (including identifiable intangible assets and goodwill) and liabilities assumed, as follows (in thousands): Description Fair Value Cash $ 396 Accounts receivable 7,409 Inventories 6,879 Prepaid expenses and other current assets 382 Property and equipment 4,044 Intangibles - customer related 55,000 Intangibles - trade name 8,000 Goodwill 60,590 Operating lease right-of-use assets 2,643 Other assets 333 Other current liabilities (5,244 ) Long-term operating lease liabilities (2,376 ) $ 138,056 Cash consideration $ 113,056 Acquisition date estimated fair value of earn-out obligation 25,000 Total $ 138,056 |
Business Acquisition, Pro Forma Information | The unaudited consolidated pro forma results of operations are as follows (in thousands except per share amounts): Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Revenue $ 189,111 $ 181,569 $ 360,589 $ 368,988 Net Income $ 10,025 $ 8,870 $ 17,064 $ 16,171 Basic earnings per share $ 0.92 $ 0.82 $ 1.56 $ 1.49 Diluted earnings per share $ 0.91 $ 0.81 $ 1.55 $ 1.48 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | A summary of revenues for our operating groups by customer for the three and six months ended June 30, 2019 are as follows (in thousands): Three months ended June 30, 2019 Customer Supply Chain Management Aviation Federal Services Total USPS $ 42,112 $ — $ — $ 42,112 DoD 6,461 260 68,359 75,080 Commercial 5,090 54,086 — 59,176 Other government 142 651 11,950 12,743 $ 53,805 $ 54,997 $ 80,309 $ 189,111 Six months ended June 30, 2019 Customer Supply Chain Management Aviation Federal Services Total USPS $ 84,795 $ — $ — $ 84,795 DoD 11,303 1,155 125,323 137,781 Commercial 9,070 102,561 1,104 112,735 Other government 341 651 22,727 23,719 $ 105,509 $ 104,367 $ 149,154 $ 359,030 A summary of revenues for our operating groups by customer for the three and six months ended June 30, 2018 are as follows (in thousands): Three months ended June 30, 2018 Customer Supply Chain Management Aviation Federal Services Total USPS $ 43,089 $ — $ — $ 43,089 DoD 7,525 1,025 73,637 82,187 Commercial 3,413 34,037 31 37,481 Other government 236 742 6,659 7,637 $ 54,263 $ 35,804 $ 80,327 $ 170,394 Six months ended June 30, 2018 Customer Supply Chain Management Aviation Federal Services Total USPS $ 87,120 $ — $ — $ 87,120 DoD 15,701 2,240 151,899 169,840 Commercial 6,799 65,572 233 72,604 Other government 507 742 16,478 17,727 $ 110,127 $ 68,554 $ 168,610 $ 347,291 A summary of revenues for our operating groups by contract type for the three and six months ended June 30, 2019 are as follows (in thousands): Three months ended June 30, 2019 Contract Type Supply Chain Management Aviation Federal Services Total Cost-type $ — $ 169 $ 33,496 $ 33,665 Fixed-price 53,805 25,056 19,153 98,014 Time and materials — 29,772 27,660 57,432 Total revenues $ 53,805 $ 54,997 $ 80,309 $ 189,111 Six months ended June 30, 2019 Contract Type Supply Chain Management Aviation Federal Services Total Cost-type $ — $ 381 $ 61,336 $ 61,717 Fixed-price 105,509 48,992 39,020 193,521 Time and materials — 54,994 48,798 103,792 Total revenues $ 105,509 $ 104,367 $ 149,154 $ 359,030 A summary of revenues for our operating groups by contract type for the three and six months ended June 30, 2018 are as follows (in thousands): Three months ended June 30, 2018 Contract Type Supply Chain Management Aviation Federal Services Total Cost-type $ — $ 701 $ 41,801 $ 42,502 Fixed-price 54,263 19,869 17,204 91,336 Time and materials — 15,234 21,322 36,556 Total revenues $ 54,263 $ 35,804 $ 80,327 $ 170,394 Six months ended June 30, 2018 Contract Type Supply Chain Management Aviation Federal Services Total Cost-type $ — $ 1,098 $ 92,922 $ 94,020 Fixed-price 110,127 39,373 32,343 181,843 Time and materials — 28,083 43,345 71,428 Total revenues $ 110,127 $ 68,554 $ 168,610 $ 347,291 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consisted of the following (in thousands): June 30, December 31, 2019 2018 Bank credit facility - term loan $ 75,800 $ 80,800 Bank credit facility - revolver loans 205,144 81,934 Principal amount of long-term debt 280,944 162,734 Less debt issuance costs (1,868 ) (2,135 ) Total long-term debt 279,076 160,599 Less current portion (10,091 ) (9,466 ) Long-term debt, net of current portion $ 268,985 $ 151,133 |
Schedule of Term Loan Payments | Our required term loan payments after June 30, 2019 are as follows (in thousands): 2019 $ 5,000 2020 11,875 2021 14,375 2022 15,000 2023 29,550 Total $ 75,800 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Basic weighted average common shares outstanding 10,969,899 10,881,106 10,945,172 10,870,887 Effect of dilutive shares 102,846 37,821 78,513 36,890 Diluted weighted average common shares outstanding 11,072,745 10,918,927 11,023,685 10,907,777 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of Lease Expense | Our lease cost for the three and six months ended June 30, 2019 included the following components (in thousands): Three months Six months Operating lease cost $ 1,625 $ 3,250 Short-term lease cost 175 299 Less: sublease income (251 ) (540 ) Total lease cost, net $ 1,549 $ 3,009 |
Maturities of Operating Lease Liabilities | The table below summarizes future minimum lease payments under operating leases, recorded on the balance sheet, as of June 30, 2019 (in thousands): Operating Leases Last six months of 2019 $ 2,439 2020 5,384 2021 5,088 2022 5,112 2023 4,790 After 2023 14,149 Minimum lease payments 36,962 Less: imputed interest (7,078 ) Present value of minimum lease payments 29,884 Less: current maturities of lease liabilities (4,168 ) Long-term lease liabilities $ 25,716 |
Business Segments and Custome_2
Business Segments and Customer Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Our segment information is as follows (in thousands): Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Revenues: Supply Chain Management Group $ 53,805 $ 54,263 $ 105,509 $ 110,127 Aviation Group 54,997 35,804 104,367 68,554 Federal Services Group 80,309 80,327 149,154 168,610 Total revenues $ 189,111 $ 170,394 $ 359,030 $ 347,291 Operating income: Supply Chain Management Group $ 7,557 $ 8,168 $ 14,545 $ 15,764 Aviation Group 5,204 2,846 8,252 5,107 Federal Services Group 5,059 3,606 8,444 6,084 Corporate/unallocated expenses (1,404 ) (765 ) (3,012 ) (1,507 ) Operating income $ 16,416 $ 13,855 $ 28,229 $ 25,448 |
Revenue by Customer | Our revenues by customer is as follows (dollars in thousands): Three months ended June 30, Six months ended June 30, Customer 2019 % 2018 % 2019 % 2018 % USPS $ 42,112 22.3 % $ 43,089 25.3 % $ 84,795 23.6 % $ 87,120 25.1 % U.S. Navy 22,202 11.8 % 35,696 20.9 % 42,807 11.9 % 78,281 22.5 % U.S. Army 47,333 25.0 % 41,548 24.4 % 84,052 23.4 % 84,335 24.3 % U.S. Air Force 5,545 2.9 % 4,943 2.9 % 10,922 3.1 % 7,224 2.1 % Total - DoD 75,080 39.7 % 82,187 48.2 % 137,781 38.4 % 169,840 48.9 % Commercial aviation 54,086 28.6 % 34,037 20.0 % 102,561 28.6 % 65,572 18.9 % Other commercial 5,090 2.7 % 3,444 2.0 % 10,174 2.8 % 7,032 2.0 % Total - Commercial 59,176 31.3 % 37,481 22.0 % 112,735 31.4 % 72,604 20.9 % Other government 12,743 6.7 % 7,637 4.5 % 23,719 6.6 % 17,727 5.1 % Total $ 189,111 100 % $ 170,394 100 % $ 359,030 100 % $ 347,291 100 % |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill by Operating Segment | Changes in goodwill for the six months ended June 30, 2019 are as follows (in thousands): Supply Chain Management Federal Services Aviation Total Balance as of December 31, 2018 $ 63,190 $ 30,883 $ 104,549 $ 198,622 Increase from acquisition — — 60,590 60,590 Balance as of June 30, 2019 $ 63,190 $ 30,883 $ 165,139 $ 259,212 |
Schedule of Intangible Assets | Intangible assets, net were comprised of the following (in thousands): Cost Accumulated Amortization Accumulated Impairment Loss Net Intangible Assets June 30, 2019 Contract and customer-related $ 228,094 $ (94,185 ) $ (1,025 ) $ 132,884 Acquired technologies 12,400 (9,096 ) — 3,304 Trade names 24,670 (12,937 ) — 11,733 Total $ 265,164 $ (116,218 ) $ (1,025 ) $ 147,921 December 31, 2018 Contract and customer-related $ 173,094 $ (86,076 ) $ (1,025 ) $ 85,993 Acquired technologies 12,400 (8,533 ) — 3,867 Trade names 16,670 (11,638 ) — 5,032 Total $ 202,164 $ (106,247 ) $ (1,025 ) $ 94,892 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 and the level they fall within the fair value hierarchy (in thousands): Amounts Recorded at Fair Value Financial Statement Classification Fair Value Hierarchy Fair Value June 30, 2019 Fair Value December 31, 2018 Non-COLI assets held in Deferred Supplemental Compensation Plan Other assets Level 1 $ 611 $ 403 Interest rate swap agreements Accrued expenses/Other current assets Level 2 $ 1,699 $ 195 Earn-out obligation - short-term Current portion of earn-out obligation Level 3 $ 10,700 $ — Earn-out obligation - long-term Earn-out obligation Level 3 $ 14,300 $ — |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 30, 2019 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Right-of-use assets | $ 25,256 | |
Lease liabilities | $ 29,884 | |
ASU 2016-02 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Right-of-use assets | $ 24,300 | |
Property and equipment | 2,800 | |
Lease liabilities | 29,600 | |
Cumulative effect on retained earnings | $ 1,900 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - USD ($) $ in Thousands | Jan. 10, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 259,212 | $ 259,212 | $ 198,622 | |
Employment Contracts | ||||
Business Acquisition [Line Items] | ||||
Term of contract | 3 years | |||
Noncompete Agreements | ||||
Business Acquisition [Line Items] | ||||
Term of contract | 5 years | |||
1st Choice Aerospace | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, percentage acquired | 100.00% | |||
Cash consideration | $ 113,056 | |||
Working capital adjustment | 1,100 | |||
Earn-out payments | 40,000 | |||
Escrow | 1,100 | |||
Revenue | 27,300 | |||
Net Income | 5,900 | |||
Amortization of intangible assets | 2,000 | |||
Corporate costs | 780 | |||
Goodwill | $ 60,590 | |||
Acquisition related costs | $ 154 | $ 408 | ||
1st Choice Aerospace | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful life | 17 years | |||
1st Choice Aerospace | Trade Name | ||||
Business Acquisition [Line Items] | ||||
Weighted average useful life | 9 years |
Acquisition - Schedule of Busin
Acquisition - Schedule of Business Acquisition (Details) - USD ($) $ in Thousands | Jan. 10, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 259,212 | $ 198,622 | |
1st Choice Aerospace | |||
Business Acquisition [Line Items] | |||
Cash | $ 396 | ||
Accounts receivable | 7,409 | ||
Inventories | 6,879 | ||
Prepaid expenses and other current assets | 382 | ||
Property and equipment | 4,044 | ||
Goodwill | 60,590 | ||
Operating lease right-of-use assets | 2,643 | ||
Other assets | 333 | ||
Other current liabilities | (5,244) | ||
Long-term operating lease liabilities | $ (2,376) | ||
Assets acquired and liabilities assumed, net | 138,056 | ||
Cash consideration | 113,056 | ||
Acquisition date estimated fair value of earn-out obligation | 25,000 | ||
Total | 138,056 | ||
Customer Related | 1st Choice Aerospace | |||
Business Acquisition [Line Items] | |||
Intangible assets | 55,000 | ||
Trade Name | 1st Choice Aerospace | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 8,000 |
Acquisition - Business Acquisit
Acquisition - Business Acquisition, Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Combinations [Abstract] | ||||
Revenue | $ 189,111 | $ 181,569 | $ 360,589 | $ 368,988 |
Net Income | $ 10,025 | $ 8,870 | $ 17,064 | $ 16,171 |
Basic earnings per share (in dollars per share) | $ 0.92 | $ 0.82 | $ 1.56 | $ 1.49 |
Diluted earnings per share (in dollars per share) | $ 0.91 | $ 0.81 | $ 1.55 | $ 1.48 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 189,111 | $ 170,394 | $ 359,030 | $ 347,291 |
Cost-type | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 33,665 | 42,502 | 61,717 | 94,020 |
Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 98,014 | 91,336 | 193,521 | 181,843 |
Time and materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 57,432 | 36,556 | 103,792 | 71,428 |
USPS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 42,112 | 43,089 | 84,795 | 87,120 |
DoD | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 75,080 | 82,187 | 137,781 | 169,840 |
Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 59,176 | 37,481 | 112,735 | 72,604 |
Other government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 12,743 | 7,637 | 23,719 | 17,727 |
Supply Chain Management | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 53,805 | 54,263 | 105,509 | 110,127 |
Supply Chain Management | Cost-type | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Supply Chain Management | Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 53,805 | 54,263 | 105,509 | 110,127 |
Supply Chain Management | Time and materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Supply Chain Management | USPS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 42,112 | 43,089 | 84,795 | 87,120 |
Supply Chain Management | DoD | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6,461 | 7,525 | 11,303 | 15,701 |
Supply Chain Management | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5,090 | 3,413 | 9,070 | 6,799 |
Supply Chain Management | Other government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 142 | 236 | 341 | 507 |
Aviation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 54,997 | 35,804 | 104,367 | 68,554 |
Aviation | Cost-type | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 169 | 701 | 381 | 1,098 |
Aviation | Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 25,056 | 19,869 | 48,992 | 39,373 |
Aviation | Time and materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 29,772 | 15,234 | 54,994 | 28,083 |
Aviation | USPS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Aviation | DoD | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 260 | 1,025 | 1,155 | 2,240 |
Aviation | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 54,086 | 34,037 | 102,561 | 65,572 |
Aviation | Other government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 651 | 742 | 651 | 742 |
Federal Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 80,309 | 80,327 | 149,154 | 168,610 |
Federal Services | Cost-type | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 33,496 | 41,801 | 61,336 | 92,922 |
Federal Services | Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 19,153 | 17,204 | 39,020 | 32,343 |
Federal Services | Time and materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 27,660 | 21,322 | 48,798 | 43,345 |
Federal Services | USPS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Federal Services | DoD | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 68,359 | 73,637 | 125,323 | 151,899 |
Federal Services | Commercial | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 31 | 1,104 | 233 |
Federal Services | Other government | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 11,950 | $ 6,659 | $ 22,727 | $ 16,478 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Unbilled receivables, net | $ 45,961 | $ 45,961 | $ 41,255 | ||
Contract with customer, liability | 4,900 | 4,900 | $ 5,000 | ||
Contract with customer, liability, revenue recognized | 2,000 | $ 7,700 | |||
Revenue, remaining performance obligation | $ 269,000 | $ 269,000 | |||
Sales Revenue, Net | Product Concentration Risk | Transferred over Time | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Concentration risk, percentage | 57.00% | 57.00% | 57.00% | 57.00% | |
Sales Revenue, Net | Product Concentration Risk | Transferred at Point in Time | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Concentration risk, percentage | 43.00% | 43.00% | 43.00% | 43.00% |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) | Jun. 30, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-03-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 97.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 3.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||||
Long-term debt | $ 280,944,000 | $ 280,944,000 | $ 162,734,000 | |||
Less debt issuance costs | (1,868,000) | (1,868,000) | (2,135,000) | |||
Total long-term debt | 279,076,000 | 279,076,000 | 160,599,000 | |||
Less current portion | (10,091,000) | (10,091,000) | (9,466,000) | |||
Long-term debt, less current portion | 268,985,000 | 268,985,000 | 151,133,000 | |||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
Total long-term debt | 279,076,000 | $ 279,076,000 | 160,599,000 | |||
LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Base margin | 2.50% | |||||
Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Base margin | 1.25% | |||||
Amended and Restated | ||||||
Debt Instrument [Line Items] | ||||||
Less debt issuance costs | $ (1,500,000) | $ (1,500,000) | ||||
Amortization period of debt issuance costs | 5 years | |||||
Increase in maximum availability | $ 100,000,000 | |||||
Duration of interest rate cash flow hedge | 3 years | |||||
Effective interest rate | 5.16% | 5.16% | ||||
Interest expense, net | $ 3,400,000 | $ 1,700,000 | $ 6,300,000 | $ 3,200,000 | ||
Amended and Restated | Swap | ||||||
Debt Instrument [Line Items] | ||||||
Derivative notional amount | 125,000,000 | 125,000,000 | 50,000,000 | |||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | 75,800,000 | 75,800,000 | 80,800,000 | |||
Total long-term debt | 75,800,000 | 75,800,000 | ||||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||||||
2019 | 5,000,000 | 5,000,000 | ||||
2020 | 11,875,000 | 11,875,000 | ||||
2021 | 14,375,000 | 14,375,000 | ||||
2022 | 15,000,000 | 15,000,000 | ||||
2023 | 29,550,000 | 29,550,000 | ||||
Total long-term debt | 75,800,000 | 75,800,000 | ||||
Revolving Loans | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt | 205,144,000 | 205,144,000 | 81,934,000 | |||
Revolving loans maximum borrowing capacity | 300,000,000 | 300,000,000 | ||||
Letters of credit outstanding | $ 18,000 | $ 18,000 | $ 57,000 | |||
Minimum | Amended and Restated | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate range | 4.89% | 4.89% | ||||
Maximum | Amended and Restated | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate range | 6.75% | 6.75% |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding (in shares) | 10,969,899 | 10,881,106 | 10,945,172 | 10,870,887 |
Effect of dilutive shares (in shares) | 102,846 | 37,821 | 78,513 | 36,890 |
Diluted weighted average common shares outstanding (in shares) | 11,072,745 | 10,918,927 | 11,023,685 | 10,907,777 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Apr. 19, 2018subcontractor | Jun. 30, 2019USD ($) |
Loss Contingencies [Line Items] | ||
Cash payments | $ 3,200 | |
Weighted average remaining lease term | 6 years 12 months 18 days | |
Weighted average discount rate, percent | 6.00% | |
Lease not yet commenced | $ 300 | |
Lease not yet commenced, lease term | 3 years | |
Joseph Waggoner v VSE re Overtime Compensation | ||
Loss Contingencies [Line Items] | ||
Number of subcontractors | subcontractor | 2 | |
Minimum | ||
Loss Contingencies [Line Items] | ||
Lease term | 2 years | |
Maximum | ||
Loss Contingencies [Line Items] | ||
Lease term | 15 years |
Commitments and Contingencies_2
Commitments and Contingencies - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 1,625 | $ 3,250 |
Short-term lease cost | 175 | 299 |
Less: sublease income | (251) | (540) |
Total lease cost, net | $ 1,549 | $ 3,009 |
Commitments and Contingencies_3
Commitments and Contingencies - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Last six months of 2019 | $ 2,439 |
2020 | 5,384 |
2021 | 5,088 |
2022 | 5,112 |
2023 | 4,790 |
After 2023 | 14,149 |
Minimum lease payments | 36,962 |
Less: imputed interest | (7,078) |
Present value of minimum lease payments | 29,884 |
Less: current maturities of lease liabilities | (4,168) |
Long-term operating lease liabilities | $ 25,716 |
Business Segments and Custome_3
Business Segments and Customer Information - Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable operating segments | segment | 3 | |||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 189,111 | $ 170,394 | $ 359,030 | $ 347,291 |
Operating income | 16,416 | 13,855 | 28,229 | 25,448 |
Supply Chain Management Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 53,805 | 54,263 | 105,509 | 110,127 |
Aviation Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 54,997 | 35,804 | 104,367 | 68,554 |
Federal Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 80,309 | 80,327 | 149,154 | 168,610 |
Operating Segments | Supply Chain Management Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 53,805 | 54,263 | 105,509 | 110,127 |
Operating income | 7,557 | 8,168 | 14,545 | 15,764 |
Operating Segments | Aviation Group | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 54,997 | 35,804 | 104,367 | 68,554 |
Operating income | 5,204 | 2,846 | 8,252 | 5,107 |
Operating Segments | Federal Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 80,309 | 80,327 | 149,154 | 168,610 |
Operating income | 5,059 | 3,606 | 8,444 | 6,084 |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | $ (1,404) | $ (765) | $ (3,012) | $ (1,507) |
Business Segments and Custome_4
Business Segments and Customer Information - Major Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue, Major Customer [Line Items] | ||||
Revenues | $ 189,111 | $ 170,394 | $ 359,030 | $ 347,291 |
USPS | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 42,112 | 43,089 | 84,795 | 87,120 |
U.S. Navy | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 22,202 | 35,696 | 42,807 | 78,281 |
U.S. Army | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 47,333 | 41,548 | 84,052 | 84,335 |
U.S. Air Force | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 5,545 | 4,943 | 10,922 | 7,224 |
Total - DoD | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 75,080 | 82,187 | 137,781 | 169,840 |
Commercial aviation | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 54,086 | 34,037 | 102,561 | 65,572 |
Other commercial | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 5,090 | 3,444 | 10,174 | 7,032 |
Total - Commercial | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | 59,176 | 37,481 | 112,735 | 72,604 |
Other government | ||||
Revenue, Major Customer [Line Items] | ||||
Revenues | $ 12,743 | $ 7,637 | $ 23,719 | $ 17,727 |
Customer Concentration Risk | Sales Revenue, Net | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 100.00% | 100.00% | 100.00% | 100.00% |
Customer Concentration Risk | Sales Revenue, Net | USPS | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 22.30% | 25.30% | 23.60% | 25.10% |
Customer Concentration Risk | Sales Revenue, Net | U.S. Navy | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 11.80% | 20.90% | 11.90% | 22.50% |
Customer Concentration Risk | Sales Revenue, Net | U.S. Army | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 25.00% | 24.40% | 23.40% | 24.30% |
Customer Concentration Risk | Sales Revenue, Net | U.S. Air Force | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 2.90% | 2.90% | 3.10% | 2.10% |
Customer Concentration Risk | Sales Revenue, Net | Total - DoD | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 39.70% | 48.20% | 38.40% | 48.90% |
Customer Concentration Risk | Sales Revenue, Net | Commercial aviation | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 28.60% | 20.00% | 28.60% | 18.90% |
Customer Concentration Risk | Sales Revenue, Net | Other commercial | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 2.70% | 2.00% | 2.80% | 2.00% |
Customer Concentration Risk | Sales Revenue, Net | Total - Commercial | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 31.30% | 22.00% | 31.40% | 20.90% |
Customer Concentration Risk | Sales Revenue, Net | Other government | ||||
Revenue, Major Customer [Line Items] | ||||
Percentage of revenue by customer | 6.70% | 4.50% | 6.60% | 5.10% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | |||||
Balance as of beginning of period | $ 198,622 | ||||
Increase from acquisition | 60,590 | ||||
Balance as of end of period | $ 259,212 | 259,212 | |||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 5,000 | $ 4,000 | 10,000 | $ 8,000 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Cost | 265,164 | 265,164 | $ 202,164 | ||
Accumulated Amortization | (116,218) | (116,218) | (106,247) | ||
Accumulated Impairment Loss | (1,025) | (1,025) | (1,025) | ||
Net Intangible Assets | 147,921 | 147,921 | 94,892 | ||
Supply Chain Management | |||||
Goodwill [Roll Forward] | |||||
Balance as of beginning of period | 63,190 | ||||
Increase from acquisition | 0 | ||||
Balance as of end of period | 63,190 | 63,190 | |||
Federal Services | |||||
Goodwill [Roll Forward] | |||||
Balance as of beginning of period | 30,883 | ||||
Increase from acquisition | 0 | ||||
Balance as of end of period | 30,883 | 30,883 | |||
Aviation | |||||
Goodwill [Roll Forward] | |||||
Balance as of beginning of period | 104,549 | ||||
Increase from acquisition | 60,590 | ||||
Balance as of end of period | 165,139 | 165,139 | |||
Contract and customer-related | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Cost | 228,094 | 228,094 | 173,094 | ||
Accumulated Amortization | (94,185) | (94,185) | (86,076) | ||
Accumulated Impairment Loss | (1,025) | (1,025) | (1,025) | ||
Net Intangible Assets | 132,884 | 132,884 | 85,993 | ||
Acquired technologies | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Cost | 12,400 | 12,400 | 12,400 | ||
Accumulated Amortization | (9,096) | (9,096) | (8,533) | ||
Accumulated Impairment Loss | 0 | 0 | 0 | ||
Net Intangible Assets | 3,304 | 3,304 | 3,867 | ||
Trade names | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Cost | 24,670 | 24,670 | 16,670 | ||
Accumulated Amortization | (12,937) | (12,937) | (11,638) | ||
Accumulated Impairment Loss | 0 | 0 | 0 | ||
Net Intangible Assets | $ 11,733 | $ 11,733 | $ 5,032 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Earn-out obligation - short-term | $ 10,700 | $ 0 |
Earn-out obligation - long-term | 14,300 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Other assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-COLI assets held in Deferred Supplemental Compensation Plan | 611 | 403 |
Fair Value, Measurements, Recurring | Level 2 | Accrued expenses/Other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap agreements | 1,699 | 195 |
Fair Value, Measurements, Recurring | Level 3 | Earn-out obligation | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Earn-out obligation - short-term | 10,700 | 0 |
Earn-out obligation - long-term | $ 14,300 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Income tax expense benefit on interest rate swap | $ 424 | $ 49 |
Accrued expenses/Other current assets | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap agreements | $ 1,699 | $ 195 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 24.00% | 25.00% | 23.90% | 25.10% |
COLO assets fair value increase | $ 1.6 |
Uncategorized Items - vsec-2019
Label | Element | Value |
Accounting Standards Update 2016-02 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,944,000 |
Accounting Standards Update 2016-02 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 1,944,000 |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 1,695,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,695,000 |