EXHIBIT 99.1
VSE REPORTS FINANCIAL RESULTS FOR 2006
Company Earns $7.8 million ($3.21 per diluted share)
on Revenues of $364 million;
CEO Anticipates Continued Growth in 2007
Alexandria, Virginia, February 21, 2007 - VSE Corporation (Nasdaq: VSEC)
reported consolidated financial results for the three- and twelve-month periods
ended December 31, 2006 and 2005, as follows:
VSE Corporation and Subsidiaries
Consolidated Statements of Income
(dollars in thousands, except share data)
________________________________________________________________________________________________________
Three Months Twelve Months
2006 2005 2006 2005
---- ---- ---- ----
Revenues, principally from contracts $ 101,960 $ 64,938 $ 363,734 $ 280,139
Costs and expenses of contracts 98,255 62,426 350,978 269,780
--------- --------- --------- ---------
Gross profit 3,705 2,512 12,756 10,359
Selling, general and administrative expenses 77 240 694 580
Interest income, net (151) (126) (427) (210)
--------- --------- --------- ---------
Income before income taxes 3,779 2,398 12,489 9,989
Provision for income taxes 1,391 885 4,700 3,820
--------- --------- --------- ---------
Net income $ 2,388 $ 1,513 $ 7,789 $ 6,169
========= ========= ========= =========
Weighted average shares outstanding:
Basic 2,375,644 2,351,452 2,368,725 2,322,736
Diluted 2,423,273 2,418,857 2,424,442 2,392,027
Earnings per share:
Basic - Net income $ 1.01 $ . 64 $ 3.29 $ 2.66
Diluted - Net income $ .99 $ . 63 $ 3.21 $ 2.58
________________________________________________________________________________________________________
Financial Results
VSE revenues increased about $37.0 million (up 57%) and $83.6 million
(up 30%) for the three and twelve-month periods of 2006 compared to the same
periods of 2005. Increases in 2006 were primarily due to subcontract revenues
associated with Army Equipment Support Program work.
VSE net income increased about $875 thousand (up 58%) and $1.6 million
(up 26%) for the three and twelve-month periods of 2006 compared to the same
periods of 2005. Increases in 2006 were primarily due to the profits associated
with the Tanker Ballistic Protection System Program and the BAV Ship Transfer
Program. Profits also benefited from the large amount of subcontract costs
enabling VSE to spread fixed corporate costs over a larger base and from an
increase in work performed on time and materials and fixed price contracts
which tend to have more favorable profit margins than cost-plus-fee contracts.
-more-
CEO Comments
VSE Chairman, President and CEO/COO Don Ervine said, "The financial
results reported today are in line with the positive trend in VSE operations and
results reported in recent years. VSE revenues have grown significantly as our
ability to meet customer needs has grown. With the increase in revenues, we have
been able to allocate our corporate costs over a larger base and improve our
margins on certain time and materials and fixed price contracts."
"As previously reported, during the fourth quarter of 2006 we received
new contracts and delivery orders representing potential revenues of up to
$206 million, and our funded backlog was about $299 million at the end of 2006.
Based on these and other new awards announced during the year, our strong
bookings and funded backlog, and on our sense of VSE's favorable position in
several of the markets we serve, we anticipate continued revenue and net income
growth in 2007. We also continue to examine acquisition opportunities that have
the potential to support our growth in the years ahead."
Safe Harbor
This news release contains statements which, 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 results to differ
materially from those anticipated in the forward looking statements in this news
release, see VSE's public filings with the Securities and Exchange Commission.
VSE provides diversified services to the engineering, energy and
environment, defense, and homeland security markets from more than 20 locations
across the United States and around the world. For more information on VSE
services and products, please see the Company's web site at www.vsecorp.com or
contact Len Goldstein, Director of Business and New Product Development, at
(703) 317-5202.
News Contact: C. S. Weber, CAO, (703) 329-4770
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