vsec-20260630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _____ to _____

Commission File Number: 000-03676

VSE CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Delaware			54-0649263
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

3361 Enterprise Way

Miramar,

Florida

33025

(Address of Principal Executive Offices)

(Zip Code)

Registrant's Telephone Number, Including Area Code: (954) 430-6600

Former name, former address and former fiscal year, if changed since last report: Not Applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.05 per share

VSEC

The NASDAQ Global Select Market

5.750% Tangible Equity Units

VSECU

The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transaction period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of Common Stock outstanding as of July 31, 2026: 28,064,972


	TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION

ITEM 1.	Financial Statements

	Unaudited Consolidated Balance Sheets as of June 30, 202 6 and December 31, 20 25	4

	Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 202 6 and 20 25	5

	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 202 6 and 20 25	6

	Unaudited Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 202 6 and 20 25	7

	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 202 6 and 20 25	9

	Notes to Unaudited Consolidated Financial Statements	11

ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	28

ITEM 4.	Controls and Procedures	28

PART II	OTHER INFORMATION

ITEM 1.	Legal Proceedings	29

ITEM 1A.	Risk Factors	29

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

ITEM 5.	Other Information	29

ITEM 6.	Exhibits	30

Signatures		31

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Table of Contents

Forward-Looking Statements

This quarterly report on Form 10-Q (“Form 10-Q”) of VSE Corporation (the "Company") contains statements that, to the extent they are not recitations of historical fact, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All such statements are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and this statement is included for purposes of such safe harbor provisions.

“Forward-looking” statements, as such term is defined by the Securities and Exchange Commission (the “SEC”) in its rules, regulations and releases, represent the Company's expectations or beliefs, including, but not limited to, statements concerning the Company's operations, economic performance, financial condition, growth, acquisition and disposition strategies, investments and future operational plans. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “forecast,” “seek,” “plan,” “predict,” “project,” “could,” “estimate,” “might,” “continue,” “seeking” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements, by their nature, involve substantial risks and uncertainties, certain of which are beyond the Company's control, and actual results may differ materially depending on a variety of important factors, some of which are unknown, including, without limitation, risks related to:

•the performance of the aviation aftermarket;

•global economic and political conditions;

•supply chain delays and disruptions;

•competition from existing and new competitors;

•losses related to investments in inventory and facilities;

•interruptions in the Company's operations;

•challenges related to workforce management or any failure to attract or retain a skilled workforce;

•the significant expenses that have been incurred and will be incurred in connection with the PAG Acquisition (as defined herein);

•the Company's ability to successfully integrate and achieve the strategic and other objectives and benefits, including any expected synergies, relating to recently completed acquisitions, including the PAG Acquisition;

•access to and the performance of third-party package delivery companies;

•prolonged periods of inflation and the Company's ability to mitigate the impact thereof;

•future business conditions resulting in impairments;

•the Company's ability to successfully divest businesses and to transition facilities in connection therewith;

•the Company's work on large government programs;

•health epidemics, pandemics and similar outbreaks;

•compliance with government rules and regulations, including tariffs and environmental and pollution risk;

•the Company's ability to mitigate the impacts of increased costs related to tariffs;

•litigation and legal actions arising from the Company's operations;

•technology and cybersecurity threats and incidents;

•the Company's outstanding indebtedness, including the increase in indebtedness upon completion of the PAG Acquisition;

•market volatility in the debt and equity capital markets;

•the Company's ability to continue to pay dividends at current levels or at all;

•the Company's published financial guidance;

•restrictions and limitations that may stem from financing arrangements the Company enters into or assumes in the future; and

•the other factors identified in the Company's reports filed or expected to be filed with the SEC, and incorporated by reference herein, including the Company's Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 27, 2026 (“2025 Form 10-K").

All forward-looking statements made herein are qualified by these cautionary statements and risk factors and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that occur or arise after the date hereof.

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Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VSE CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)


	June 30,		December 31,
(in thousands, except share and per share amounts)	2026		2025
Assets
Current assets:
Cash and cash equivalents	$	75,360	$	69,358
Receivables (net of allowance of $7.8 million and $7.2 million, respectively)	274,628		190,732
Contract assets	59,488		41,468
Inventories	867,124		553,834
Prepaid expenses and other current assets	48,872		37,937
Total current assets	1,325,472		893,329
Property and equipment (net of accumulated depreciation of $43.1 million and $34.2 million, respectively)	166,548		91,098
Intangible assets (net of accumulated amortization of $130.2 million and $100.2 million, respectively)	952,090		295,962
Goodwill	1,810,424		641,242
Operating lease right-of-use assets	92,321		50,151
Note receivable	28,423		27,041
Other assets	22,128		29,755
Total assets	$	4,397,406	$	2,028,578
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	32,004	$	7,500
Accounts payable	187,068		154,506
Accrued expenses and other current liabilities	96,077		73,161
Dividends payable	2,806		2,339
Earn-out obligation	33,850		—
Total current liabilities	351,805		237,506
Long-term debt, net of current portion	914,953		285,304
Deferred compensation	5,114		5,918
Long-term operating lease obligations	78,643		43,693
Deferred tax liabilities	104,583		12,394
Other long-term liabilities	8,872		4,955
Total liabilities	1,463,970		589,770
Commitments and contingencies (Note 8)
Stockholders' equity:
Common stock, par value $0.05 per share, authorized 44,000,000 shares; issued and outstanding 28,062,020 and 23,398,046, respectively	1,403		1,170
Additional paid-in capital	2,484,138		1,041,483
Retained earnings	447,608		395,643
Accumulated other comprehensive income	287		512
Total stockholders' equity	2,933,436		1,438,808
Total liabilities and stockholders' equity	$	4,397,406	$	2,028,578

The accompanying notes are an integral part of these consolidated financial statements.

-4-

Table of Conten t s

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
(in thousands, except share and per share amounts)	2026		2025		2026		2025
Revenues:
Products	$	203,407	$	173,603	$	405,757	$	334,154
Services	245,730		98,536		367,960		194,030
Total revenues	449,137		272,139		773,717		528,184

Costs and operating expenses:
Products	167,093		144,828		331,385		281,695
Services	205,605		89,795		317,894		176,024
Selling, general and administrative expenses	9,031		2,616		15,232		4,927
Earn-out receivable fair value adjustments	—		5,900		—		5,900
Amortization of intangible assets	18,450		6,487		27,500		12,621
Total costs and operating expenses	400,179		249,626		692,011		481,167
Operating income	48,958		22,513		81,706		47,017

Interest expense, net	5,230		6,445		3,828		14,384
Loss on debt extinguishment	4,473		—		4,473		—
Income from continuing operations before income taxes	39,255		16,068		73,405		32,633
Provision for income taxes	10,732		2,430		15,827		5,027
Net income from continuing operations	28,523		13,638		57,578		27,606
Loss from discontinued operations, net of tax	—		(10,441)		—		(33,382)
Net income (loss)	$	28,523	$	3,197	$	57,578	$	(5,776)

Earnings (loss) per share:
Basic
Continuing operations	$	0.92	$	0.66	$	1.97	$	1.34
Discontinued operations	—		(0.51)		—		(1.62)
	$	0.92	$	0.15	$	1.97	$	(0.28)
Diluted
Continuing operations	$	0.91	$	0.66	$	1.94	$	1.33
Discontinued operations	—		(0.50)		—		(1.61)
	$	0.91	$	0.16	$	1.94	$	(0.28)

Weighted average shares outstanding:
Basic	30,941,788		20,670,239		29,229,014		20,644,215
Diluted	31,385,479		20,731,397		29,619,493		20,735,979

Dividends declared per share	$	0.10	$	0.10	$	0.20	$	0.20

The accompanying notes are an integral part of these consolidated financial statements.

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Table of Conten t s

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
(in thousands)	2026		2025		2026		2025
Net income (loss)	$	28,523	$	3,197	$	57,578	$	(5,776)
Other comprehensive loss, net of tax:
Change in fair value of interest rate swap agreements, net of tax	457		(698)		1,116		(2,152)
Foreign currency translation adjustments	(1,341)		—		(1,341)		—
Total other comprehensive loss, net of tax	(884)		(698)		(225)		(2,152)
Comprehensive income (loss)	$	27,639	$	2,499	$	57,353	$	(7,928)

The accompanying notes are an integral part of these consolidated financial statements.

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Table of Conten t s

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity

(Unaudited)


	Three months ended June 30, 2026
				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders' Equity
	Common Stock
(in thousands, except per share data)	Shares	Amount
Balance at March 31, 2026	28,056	$	1,403	$	2,241,751	$	421,891	$	1,171	$	2,666,216
Net income	—	—		—		28,523		—		28,523
Stock issuance in connection with acquisition	—	—		238,002		—		—		238,002
Stock-based compensation	6	—		4,385		—		—		4,385
Other comprehensive loss, net of tax	—	—		—		—		(884)		(884)
Dividends declared ($0.10 per share)	—	—		—		(2,806)		—		(2,806)
Balance at June 30, 2026	28,062	$	1,403	$	2,484,138	$	447,608	$	287	$	2,933,436


	Three months ended June 30, 2025
				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders' Equity
	Common Stock
(in thousands, except per share data)	Shares	Amount
Balance at March 31, 2025	20,670	$	1,033	$	591,650	$	381,443	$	1,618	$	975,744
Net income	—	—		—		3,197		—		3,197
Stock-based compensation	7	1		3,351		—		—		3,352
Other comprehensive loss, net of tax	—	—		—		—		(698)		(698)
Dividends declared ($0.10 per share)	—	—		—		(2,068)		—		(2,068)
Balance at June 30, 2025	20,677	$	1,034	$	595,001	$	382,572	$	920	$	979,527

The accompanying notes are an integral part of these consolidated financial statements.

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Table of Conten t s

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity (continued)

(Unaudited)


	Six months ended June 30, 2026
				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders' Equity
	Common Stock
(in thousands, except per share data)	Shares	Amount
Balance at December 31, 2025	23,398	$	1,170	$	1,041,483	$	395,643	$	512	$	1,438,808
Net income	—	—		—		57,578		—		57,578
Issuance of common stock, net	4,588	229		828,757		—		—		828,986
Proceeds from stock purchase contract issued under tangible equity units, net of issuance costs	—	—		375,302		—		—		375,302
Stock issuance in connection with acquisition	—	—		238,002		—		—		238,002
Stock-based compensation	76	4		594		—		—		598
Other comprehensive loss, net of tax	—	—		—		—		(225)		(225)
Dividends declared ($0.20 per share)	—	—		—		(5,613)		—		(5,613)
Balance at June 30, 2026	28,062	$	1,403	$	2,484,138	$	447,608	$	287	$	2,933,436


	Six months ended June 30, 2025
				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders' Equity
	Common Stock
(in thousands, except per share data)	Shares	Amount
Balance at December 31, 2024	20,591	$	1,030	$	591,600	$	392,484	$	3,072	$	988,186
Net loss	—	—		—		(5,776)		—		(5,776)
Stock-based compensation	86	4		3,401		—		—		3,405
Other comprehensive loss, net of tax	—	—		—		—		(2,152)		(2,152)
Dividends declared ($0.20 per share)	—	—		—		(4,136)		—		(4,136)
Balance at June 30, 2025	20,677	$	1,034	$	595,001	$	382,572	$	920	$	979,527

The accompanying notes are an integral part of these consolidated financial statements.

-8-

Table of Conten t s

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)


	Six months ended June 30,
(in thousands)	2026		2025
			(a)
Cash flows from operating activities:
Net income (loss)	$	57,578	$	(5,776)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	36,721		19,540
Amortization of debt issuance cost	1,270		1,067
Deferred taxes	9,447		(3,474)
Stock-based compensation	8,664		6,663
Impairment and loss on sale of business segments	—		47,203
Loss on sale of property and equipment	223		10
Gain on settlement of corporate-owned life insurance	(357)		—
Interest income on note receivable	(1,382)		—
Earn-out receivable fair value adjustment	—		5,900
Loss on debt extinguishment	4,473		—
Changes in operating assets and liabilities, net of impact of acquisitions:
Receivables	(9,532)		(30,051)
Contract assets	(3,831)		(2,969)
Inventories	(115,617)		(25,478)
Prepaid expenses and other current assets and other assets	(5,410)		(26,144)
Operating lease assets and liabilities, net	1,889		(1,573)
Accounts payable and deferred compensation	(21,804)		(13,724)
Accrued expenses and other liabilities	2,961		(5,935)
Net cash used in operating activities	(34,707)		(34,741)
Cash flows from investing activities:
Purchases of property and equipment	(15,327)		(8,464)
Proceeds from the sale of business segments, net of cash divested	—		138,816
Cash paid for acquisitions, net of cash acquired	(1,766,844)		(47,739)
Purchases of intangible assets	(14,707)		—
Proceeds from corporate-owned life insurance settlements	760		—
Net cash (used in) provided by investing activities	(1,796,118)		82,613
Cash flows from financing activities:
Borrowings on bank credit facilities, net of creditor fees	934,357		624,881
Repayments on bank credit facilities	(343,523)		(674,381)
Repayments on amortizing notes	(5,299)		—
Proceeds from issuance of common stock, net	829,676		463
Proceeds from issuance of tangible equity units, net	444,908		—
Payment of debt financing costs	(7,909)		(2,584)
Payment of taxes for equity transactions	(9,119)		(4,248)
Dividends paid	(5,146)		(