Exhibit 99.1
 
 
 
VSE Reports Financial Results for Second Quarter 2014
Legacy Federal Government Revenue Declines, Supply Chain Management Group Revenue Grows

Alexandria, Virginia, July 31, 2014 - VSE Corporation (Nasdaq: VSEC) reported the following unaudited consolidated financial results for the three-month and six-month periods ended June 30, 2014. 

Financial Results (Unaudited)
  
(in thousands, except per-share data and percentages)
  
 
  
Three Months Ended June 30,
    
Six Months Ended June 30,
  
 
  
2014
    
2013
    
% Change
    
2014
    
2013
    
% Change
  
Revenues
  
$
107,962
    
$
119,062
      
(9.3
)%
  
$
227,371
    
$
238,219
      
(4.6
)%
Operating income
  
$
10,703
    
$
12,701
      
(15.7
)%
  
$
22,060
    
$
22,643
      
(2.6
)%
Operating margin
    
9.9
%
    
10.7
%
  
Down 80 bp
      
9.7
%
    
9.5
%
  
Up 20 bp
  
Income from continuing operations
  
$
5,944
    
$
6,963
      
(14.6
)%
  
$
12,213
    
$
12,234
      
(0.2
)%
Loss from discontinued operations, net of tax
  
$ 
(279
)
  
$ 
(101
)
    
-
    
$ 
(894
)
  
$ 
(114
)
    
-
  
Net income
  
$
5,665
    
$
6,862
      
(17.4
)%
  
$
11,319
    
$
12,120
      
(6.6
)%
Income from continuing operations EPS (diluted)
  
$
1.11
    
$
1.30
      
(14.6
)%
  
$
2.28
    
$
2.29
      
(0.4
)%
Loss from discontinued operations EPS (diluted)
  
$ 
(0.05
)
  
$ 
(0.02
)
    
-
    
$ 
(0.17
)
  
$ 
(0.02
)
    
-
  
Net income EPS
  
$
1.06
    
$
1.28
      
(17.2
)%
  
$
2.11
    
$
2.27
      
(7.0
)%

"Changes in government spending priorities and increased competition for fewer opportunities have caused significant declines in our DoD and other federal legacy revenues," said VSE CEO Maurice "Mo" Gauthier.  "However, our Supply Chain Group has seen growth in both revenue and operating income for the second quarter and first half of this year as compared to the same periods for last year. Our success in extending our vehicle, ship and aircraft sustainment, service life extension and logistics competencies to new markets continues to guide our strategic direction. Additionally, our positive cash flow and reduction in bank debt positions us to consider a variety of options to increase shareholder value."
Revenues were $108 million compared to $119 million in the second quarter of 2013. For the first six months, revenues were $227 million in 2014 compared to $238 million in 2013.
Operating income was $10.7 million for the second quarter of 2014 compared to $12.7 million in the second quarter of 2013. For the first six months, operating income was $22.1 million in 2014 compared to $22.6 million in 2013.
Net income was $5.7 million for the second quarter of 2014, or $1.06 per diluted share, compared to $6.9 million, or $1.28 per diluted share for the second quarter of 2013.  Net income was $11.3 million for the first six months of 2014, or $2.11 per diluted share, compared to $12.1 million, or $2.27 per diluted share for the first six months of 2013.

Bookings were $173 million for the first six months of 2014 compared to revenue of $227 million. Funded contract backlog at June 30, 2014 was $178 million, compared to $205 million at March 31, 2014 and $238 million at June 30, 2013.

Second Quarter Operational Highlights
·
Our Wheeler Bros., Inc. subsidiary was recently recognized by the U.S. Postal Service as a winner of a 2013 Postal Service Supplier Performance Award.  This recognition marks the seventh Postal Service Supplier Performance award for WBI.
·
Our International Group received a number of awards, including the following:
o
 A delivery order under its Navy FMS contract to provide engineering field services for in-country technical assistance team (ICTAT) for Egypt. This delivery order has an eight-month period of performance and a total value of approximately $5M.
o
A delivery order under its Navy FMS contract to provide Material and Component Procurement for Management and Engineering Support for Royal Saudi Naval Forces Special Forces. This delivery order has a five-month period of performance and a total value of approximately $4.4M.
o
Two delivery orders under its U.S. Coast Guard Foreign Military Sales (FMS) contract in support of the Governments of Bangladesh and Nigeria. These delivery orders have a period of performance of up to seven-months and a total value of approx. $3M.
o
Seven delivery orders under the Navy FMS contract, supporting the Italian, Turkish, Taiwan, Philippines, Iraq and Albania Navies. The delivery orders have a period of performance of up to twelve-months and a total value of $6.5 million.

About VSE                                                                                                                              
Established in 1959, VSE is a diversified federal services company with experience in solving issues of global significance with integrity, agility, and value. VSE is dedicated to making our clients successful by delivering talented people and innovative solutions for supply chain management, logistics, engineering, energy, IT services, and consulting. For additional information regarding VSE services and products, please see the Company's web site at www.vsecorp.com or contact Christine Kaineg, VSE Investor Relations, at (703) 329-3263.

VSE encourages investors and others to review the detailed reporting and disclosures contained in VSE's public filings with the Securities and Exchange Commission (SEC) for further information and analysis of VSE's financial condition and results of operations. The public filings include additional discussion about the status of specific customer programs and contract awards, risks, revenue sources and funding, dependence on material customers, and management's discussion of short and long term business challenges and opportunities.

Safe Harbor
This news release contains statements that to the extent they are not recitations of historical fact, constitute "forward looking statements" under federal securities laws. All such statements are intended to be subject to the safe harbor protection provided by applicable securities laws. For discussions identifying some important factors that could cause actual VSE results to differ materially from those anticipated in the forward looking statements in this news release, see VSE's public filings with the SEC, including VSE's Annual Report on Form 10-K for the year ended December 31, 2013 and subsequent reports filed with the SEC.

VSE Financial News Contact: Christine Kaineg -- (703) 329-3263
 

VSE Corporation and Subsidiaries
  
   
 
Unaudited Consolidated Balance Sheets
  
   
 
(in thousands except share and per share amounts)
  
   
 
 
  
   
 
 
  
June 30,
    
December 31,
  
 
  
2014
    
2013
  
Assets
  
   
 
Current assets:
  
   
 
Cash and cash equivalents
  
$
302
    
$
220
  
Receivables, principally U.S. Government, net
    
62,134
      
78,387
  
Inventories
    
44,108
      
39,315
  
Deferred tax assets
    
1,101
      
863
  
Other current assets
    
10,515
      
10,641
  
          Total current assets
    
118,160
      
129,426
  
 
                
Property and equipment, net
    
55,470
      
57,738
  
Intangible assets, net
    
77,175
      
82,257
  
Goodwill
    
92,052
      
92,052
  
Deferred tax assets
    
2,994
      
2,545
  
Other assets
    
17,320
      
16,511
  
          Total assets
  
$
363,171
    
$
380,529
  
 
                
Liabilities and Stockholders' Equity
                
Current liabilities:
                
Current portion of long-term debt
  
$
27,962
    
$
24,837
  
Accounts payable
    
25,460
      
31,757
  
Current portion of earn-out obligations
    
1,486
      
-
  
Accrued expenses and other current liabilities
    
22,816
      
24,661
  
Dividends payable
    
536
      
480
  
          Total current liabilities
    
78,260
      
81,735
  
 
                
Long-term debt, less current portion
    
39,108
      
64,487
  
Deferred compensation
    
12,550
      
11,454
  
Long-term lease obligations, less current portion
    
25,139
      
25,721
  
Earn-out obligation
    
8,363
      
9,062
  
Other liabilities
    
1,386
      
1,267
  
          Total liabilities
    
164,806
      
193,726
  
 
                
Stockholders' equity:
                
Common stock, par value $0.05 per share, authorized 15,000,000 shares; issued and outstanding 5,355,698 and 5,333,077 respectively
    
268
      
267
  
Additional paid-in capital
    
20,199
      
19,139
  
Retained earnings
    
177,898
      
167,598
  
Accumulated other comprehensive loss
    
-
      
(201
)
    Total stockholders' equity
    
198,365
      
186,803
  
    Total liabilities and stockholders' equity
  
$
363,171
    
$
380,529