VSE (VSEC) Q1 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Thu, May 7, 2026 astatine 10:56 AM CDT 38 min read

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Date

Wednesday, May 6, 2026 astatine 8:30 a.m. ET

Call participants

• Chief Executive Officer — John Cuomo

• Chief Financial Officer — Adam Cohn

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Full Conference Call Transcript

John Cuomo: Good morning, everyone, and convey you for joining america today. We delivered a beardown commencement to 2026 with grounds results successful the archetypal 4th and continued momentum crossed our business. Our show was driven by balanced contributions from some our organisation and MRO channels, supported by beardown execution, caller programme enactment and continued marketplace stock gains. Engine-related aftermarket enactment remains a cardinal operator of our concern and present represents much than fractional of our full gross with continued spot crossed our halfway platforms. During the quarter, we precocious our OEM-aligned organisation programs, expanded our MRO capabilities, invested successful targeted maturation opportunities and made meaningful advancement connected our acquisition integrations.

We stay focused connected executing our strategy, scaling our level and driving continued growth, borderline enlargement and semipermanent worth creation. Let's statesman connected Slide 3, wherever I volition item our caller developments. Let maine commencement with the acquisition of PAG, which we closed this week connected Tuesday, May 5. Together, VSE and PAG present signifier a scaled autarkic aviation aftermarket level with 61 locations crossed 8 countries, including 48 repair facilities and 11 organisation centers of excellence. The operation importantly expands our capabilities crossed some organisation and MRO, enhances our method extent and strengthens our quality to present much integrated end-to-end solutions with accrued proprietary contented to a wide and diversified lawsuit base.

The concern volition present service a divers lawsuit basal crossed commercial, concern and wide aviation, rotorcraft, OEM and defence markets. Strategically, this transaction accelerates our modulation towards a much integrated, higher-margin aftermarket exemplary with greater vulnerability to repair and engine-related activity. PAG's borderline illustration is instantly accretive and supports a wide way to exceeding 20% consolidated adjusted EBITDA margins implicit time, on with improved escaped currency travel generation. We funded the transaction done a operation of equity and caller indebtedness financing, which Adam volition screen successful much item shortly. With the transaction present closed, our absorption shifts to integration and execution.

We spot wide opportunities to thrust synergies done cross-selling, repair in-sourcing and procurement efficiencies, and we are assured successful our quality to present connected those objectives. Let's determination to Slide 4 and proceed with our caller developments. On April 1, we acquired NorthStar Technologies, a supplier of MRO and third-party logistics services supporting the motor aftermarket. This acquisition expands our motor work capabilities successful the concern and wide aviation market, deepens our integration with OEM aftermarket proviso chains and enhances our quality to seizure increasing request for teardown and different labor-intensive services. The concern operates nether a capital-light exemplary with beardown request visibility and a demonstrated resilience crossed marketplace cycles, supporting some progressive fleet and expanding teardown and status activity.