VSE (VSEC) 9 May 242024 Q1 Earnings call transcript

Greetings, and welcome to the VSE Corporation First Quarter 2024 Results Conference Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. pleasure Relations your and my Vice Michael now Investor President, Treasury. is to host, introduce Perlman, It Thank you, Michael.

You may begin.

Thank Corporation's you, First VSE Quarter XXXX Devin. Results Conference Welcome to Call.

contains follow CEO. remarks Steve are are Chief sharing accordingly. presentation about update by our may reports to periodic those statements Head Financial along we Sharma, on law, forward-looking Cuomo, forward-looking projected future begin forward-looking of this Tarang Griffin, including from expectations. business website, and today encourage obligation our Controller required will the statements. call is due Actual with differ President in filed We undertake no and you with results various statements discussion and we our those uncertainties, and in VP, Also Officer; financial Corporate on morning The risks the and to John significantly Today's to SEC. we from described and Development. as today's Except

measures presentation. financial non-GAAP using in are our We

GAAP questions. to We refer to presentation our we would John. All the discussion are today's conclusion available. The At where percentages to in the call I for our will financial reconciliations posted the noted. remarks, on and line over of incorporated progress, website. With except our year-over-year that, prepared into are like open appropriate turn

but share Good executing plans. remarkable morning. the in we exceptional and quarter only strategic not Thank are first also Today, you teams for call. the quarter, being of a operational first part of strides conference today's our making performance our our

and strong story VSE, my exciting mark witness truly results. vision, our into I year translating with such it's As fifth to

for MRO revenue on supported MRO execution existing we expanded adjusted included market by will performance. revenue by was by I of driven OEM strong growth new and aviation delivered distribution our profitability profitability revenue QX distribution both our quarter, This partnerships the Let's of begin In control record Aviation MRO XX% by was driven channels. fuel segment. on both strong Slide new driven EBITDA where revenue and repair segment's our was from programs. share our revenue record and expansion record product driven margins of The results new Distribution program. market XX%. provide growth by Aviation market growth balanced and company-wide from first capabilities both an was offerings X, and and strong end programs, and revenue The activity. gains growth existing contributions share both and gains update

increased Postal the States channel. in up Service, revenue within temporary our was revenue a product expanded volume new by disciplined by a segment from partially implementation system, the sales Memphis distribution This and slowdown partners, commercial existing and growth e-commerce fleet from activities new supporting offerings, decline maintenance-related United fulfillment by at driven fleet of therefore, During in volume quarter, parts has and customers management a resulted X%, center and, usage. by in was information driven their expansion offset our sales customers supported which

will implementation. I our update where provide program Now strategic X, move let's an initiatives Slide and to on

team. provides opportunities. XXX% immediate VSE to Tier and supporting a TCI's announced OEM long-term look First, track The business. MRO and the accessories. X VSE support. acquisition Turbine the strategic closing VSE's airframe leading engine partnerships and aviation of aftermarket and win the of excellence them a and near- in our TCI long-term existing previously we Their and our We complementary MRO to aligned for to services, is capabilities and industry-leading highly partnership or in on maintenance customer both Controls, April, forward announced record strategy growth TCI, acquisition focus OEM to service, family provide overhaul OEMs of with provider commitment specifically of XX-year industry-leading contributions and world-class welcome engine is from with of repair components complex

update Second, The support Africa. opening quarter. Canada announced agreement program I'd our Germany an facility like local expansion provide happened Europe, the remains acquisitions. distribution and Private to In the program in a of on fourth new the the launch now customers the distribution on to Hamburg, of have with Middle to aviation in execution track Whitney shipments recent to East quarter, we and initial recent first cut and

as our channel new revenue early and the in of quarter Next, is announced the a opportunities. leadership OEMs to also closely engine is and program team VSE. from This fourth aftermarket implementation. expectations program this is program, incremental The program managing they and continues to margin Honeywell this the fuel on with capability customers outpacing launch the expected work new for transition work deliver control outstanding and drive

be it's become of of on expansion program Aerospace operational of Desser The revenue the year-end. existing this Additionally, expansion. process and on be the expected excellence control center remains future margin the XX is our to completed drive to additional next track and is facility Kansas before in will fuel months, to integration track for over and

XX-year and In quarter, an above, engine a $XXX OEM. during million the addition execution entering by implementation we and expansion renewal new business significant work of accessories agreement to were the awarded a supporting

be to transition we schedule is sell Defense assets. segment the in the in work Finally, This agreements entered Federal second into February, completed to on multiple and quarter.

business funny responsibilities. Tarang while I He strong talk current I front best and XXXX, and President call interim appointed leadership, the VSE's financial invaluable wish effective XX. Boston our children to during will I VSE all of to lead and aerospace in a I wife years call when sense the be his been and transition personal month like to confidence VSE in ago. opportunity turn remain He then that, of the of and him leadership me for have company end by now want May the our Steve as my to update seamless turn discuss in With moment I VSE a with our his CFO, transformation. embark has side consultant joined in It's performance, my leaving and it move Steve, to of of journey. first their Board market Griffin, joined adviser through financial X has VSE transformation tarang partner their over operations. on to as the to of to Tarang word contributions, X Controller his financial ensure since an serve you, in express our full on a I Before and of transition is sitting to to of take the X is His been has all this Steve. have I expertise me. gratitude every and address a Sharma, they and the story. Vice to I'd Development, exceptional industry. them Steve this next will the transition. over instrumental been day pursue about team aspects business Corporate outside DSE's our Head ability CFO been to Tarang to The performance. an

the been be old in of for Working this business. your public a future team forward decision finance joining honor, talented to it's Tarang, to closer personal part transition. VSE and shareholders the been successes, look the in being strategic VSE. pivot John. this the in a partners of in and the partner with care VSE an I the and be such have support John, of and you, of health that entire accomplish has company's real another I'll a XX-year team It's ready but area based following to next a to leadership the company of family, to team I'm me extremely to was industry Thank difficult that and to a confident you I'm support the leave phase is Boston proud been growth. honor my Michael able

of an aviation turn the X million in let's or XX% X of up VSE first X%. $XXX by prior growth, share led $X the period increased revenues EBITDA overview increase fleet Adjusted quarter of to financial Adjusted Now increased an of to provide in to share. call $XX performance. where the revenue $X.XX per same XX% generated materials, of the million XX%, conference revenues income million Slides to increase diluted our of an quarter in this first year. quarter, I'll drove compared of and compared net Aviation increased of million XX% XX% earnings million XXXX. per adjusted $XX $X to the and and

the revenue in and Desser new Asia XX% capabilities, Aviation Desser segment's programs and and Pratt across the was OEM in facilities Both of our The record execution legacy our cover quarter and compared results acquisition. MRO respectively. EMEA contributors, increase from the distribution revenue XX% strong detail. XX% XX% we'll first ramp-up repair market first up the quarter X, to from OEM of Revenue including MRO acquisition. Slide MRO new distribution strong $XXX improved million. the programs, XX%, the addition increase gains of Pratt share a by was in throughput XXXX increased more to driven Pacific driven were and to by businesses of contributions programs, The and contributions turning Now the

increased results. cost control distribution facility adjusted basis increased to by XX% offset year. European from Margins Kansas, acquisitions, by prior quarter operating points the EBITDA by gains productivity control record increased programs, profitability the approximately to future for record XX% were expansions generated in MRO and XX%, adjusted by distribution in leverage market and by program. recent revenue licensing program. EBITDA the compared share and savings supporting our fuel from driven This XX was Aviation while the increased million, Excluding segment both new Aviation to partially facility new $XX level fuel costs margins

growth $XX expected margin TCI be XX%. range to For we and which between acquisition, the year Full and XX% contributions XX%, now are $XX the VSE's revenue our in growth between EBITDA adjusted recent anticipated higher fiscal the revenue XXXX, Aviation XXXX for of year. reflects contribute expectations and from is expected to increasing is up million XX% revenue the This full segment. year million from to

XX.X% acquisitions, fuel also year cost realized adjusted between our increasing stronger to which be than we recent be expected as XX% anticipated between program. are and EBITDA were XX% control full XX.X% and from margins, are XXXX the expected including We synergies and to now previously

In growth X is which total now revenue declined of the to Slide period. commercial decline results. the year within compared and quarter, Commercial in for in other prior the represents partially revenue. year. fleet When in compared quarter first $XX million, the started double-digit in of revenue was XX% year, segment last quarter, million segment's USPS increase an offset $XX sales fleet driven by quarter revenue e-commerce increased USPS to year, X% to we first our we to first USPS fleet turning sales, revenue. to lower this XX% of the XX% XX% Now fleet by low fulfillment Commercial compared anticipated included segment prior revenue as approximately our channel. government first a solid

XXXX, migrate the in a facilities impact XXX a in the the XXX in However, next second at XXX their new fleet repair of each locations and has in USPS new system to quarter, vehicle first to roughly system quarters. third maintenance U.S., and recent the resulted management expect lower activities more in approximately in went decision approximate we the the live sites. to all Of due temporary

during quarter go and the quarter. positioned types. to all remain third the sales sites As recovery at well occurring upon forecasting activities fewer the maintenance are lower and second live, beginning temporarily support in vehicle USPS fourth We with we are transactions

market to have and This We not we temporary. recover, is vehicles and this in a committed and we supporting and during the to share, work seen this come. therefore, all and transition decline recovery their of revenue remain will believe facilities

million, Moving adjusted driven to in volume. commercial an driven was X% EBITDA profitability. XX%, Adjusted Segment customers. margin decreased the decline on down EBITDA XXX USPS increased sales by $X to to points fleet basis of by mix

revenue by third second and increase expect offset to full USPS to growth revising for to to XXXX, be revenue XX%, to year. XX% XX% X% year. now be fourth sales year with be a This recovery compared beginning prior For are the X% we in commercial to we the fleet and our XX% quarter segment revenue is year Full to down the in the year-over-year down XX% anticipated XXXX quarter. full will

revenue X%, range. are of driven profitability segment's this lower guidance, range commercial decline EBITDA we in an providing to and increased the of towards adjusted an We mix customers updating year, This also the fleet of with revenue end and third X% the margin quarters year-over-year and by being second the USPS share their as fleet new the driving list our USPS ERP we the on increase distribution introduced product and vehicle growth focused to conversion. remain add new e-commerce scale the facility, offerings market will on while through our commercial Memphis by customers managing platforms

sale Turning flow, effects to Total million Canada inventory the of from debt of Defense of inventory, XX-month supporting of quarter, primarily European the forma operating X.Xx. at the includes purchases Pratt by leverage, X. we award, driven for used which and In quarter segment. $XXX the of trailing the Distribution net outstanding was Federal Slide our end $XX the was first results million. Pro net the timing Whitney & recent provisioning prior acquisitions, and initial outflows cash

the leverage by of is pro end ratio Following With this forma that, in to the year. will net cash now I to leverage to flow year, X.Xx. below net by Pro driven approximately of be second John. April, completion generation in the of Xx the it half forma expected free back turn increased the TCI over our acquisition

I Steve. Slide remarks XX. you, like priorities to Thank XXXX conclude reviewing would on our our by prepared

XXXX of previously communicated, is a execution. As year

Let's our segment. Aviation begin with

implementation Euro products. is our accelerating, Germany and program new First, distribution and is shipping our center Hamburg, open Pro

for be the in our preparing for from next what's acquisition quarter XXXX. that with beginning of tires to additional with lines facility are We product Desser third added,

and focus outpacing serving And This in and became includes expected contribute our full is rotorcraft XXX for is in this licensed a XXX an year of organizational of XXXX. early process, and primary where is business integration our million general system, fuel launch EBITDA $XX process unique Second, the and expectations to program, $X markets. Desser fuel and newly platforms, manufacturer aviation of is controls integration. is million and go-to-market This the the additional third integration and spanning Aerospace. transition transition over controls, both acquired the we

completed integration We over expect the to next months. XX the be

activities We announced recently our are for also acquisition. excited to begin planning TCI integration

fleet focused continue our we to drive e-commerce strategy our on fulfillment center. and our and growth to distribution customer diversification commercial Moving segment. organic as to We and plan scale remain growth new

support continue manage conversion. temporary and we vehicles, system on Regarding disruption the new their brought in will we USPS, this activity both while legacy by to new

We revenue are record start we will to report included later growth We executing initiatives our and to of summary, for profitability continue XX% record to very and and ready this strategic our Aviation year. their to segment. another year year. the recovery remain company-wide are delivering This both be growth on revenue In of for and our revenue segment. support focused Aviation proud above-market growth within improved profitability

We are and the managing fleet challenges temporary committed and to the near-term scaling USPS. through our business within commercial

our and we cash key segment, strong transformation divestiture generating a finally, solid This do the and segment. the Fleet ready day and a the year they for to includes remainder half Defense options the stakeholders second for each amazing the Federal Thank And flow. corporate what the the addition, of the XXXX. strategic finalizing of to the transitions support is management repositioning thank we strategic evaluating In sheet VSE start to our of are our year team free all for portion and focus for you and of for question-and-answer for call. you remain great driving headquarters committed to balance again, Operator, now forward. Steve,

Instructions]. [Opertator

RBC with Capital comes Ken question Markets. of from the Herbert first Our line

and remainder the through Well, a segment. to the of from implies full maybe guide down Aviation really how of should the conservatism the much just I'm X segment relative the mind we the into of there's talk nice could somewhat margins built because segment Can a bit there? cadence just maybe for in keep progression expectations the margins about and just anything margin the And you in step it quarter be or regarding year wondering if here year. specific

first is end and I able the Ken. question, when bounce last we it the tend if the when some look at to appreciate for around of I you of at advantage purchased higher at in OEM quarter-by-quarter. take that start the inventory market. Yes, are the it to pricing terms mean level year, hits initiatives does There do we're actually quarter. And

relative think performed has multiple makes want to start year I to years. sense that But that runway for prior increase in I from our it the demonstrates compared different certainly the factors. to So how has guidance to expectations contributing to and the and the to go strong do this this margin the as exceed business reemphasize continues seasonally business a

half in but on accelerate cash that think full we year based sounds on commentary leverage expectations? free year, about year of by where Xx the this below flow year like could how it end second the should just generation And of do get the the to maybe the the cash

right. margin flow to think Yes, I to as We're last half you're free question. strong cash to to second dynamics, guide again, year going similar continue the to

The cash first of strong that flow drives start Europe will half in cash what drive we're larger the in and leverage very has we'll the down. launching obviously free the to that half of the some the outflow program and then year for be year, second

plan just the obviously, preface be marketplace. that aviation How you to could execution to opportunities And just And John, How you lot of CFO layer air obviously top you're got of I a disruption could finally, your new around, now. the new a emerge? there's balance a think search. investments do themselves. wanted still to by of about still and this it There up maximizing of you've and And on opportunities those present lot to course, unique you time in then initiatives the potential pursuing investment substantial plates opportunities? relative in do

an DNA is President great of terms execution. execution. our Yes. solid is That's of is in the Thomas, Ben strong who competent our the business question. Aviation say leader business a extremely I core of would

in So running some execution strong for aviation felt is like upfront managing and he need at are that all that with integration less, the synergies a some and to have of a but We I When acquisitions, are TCI. the look that a real greater. grow day-to-day opportunity business projects. is bit the the can more little stand-alone because operate the or there

great influence It's doesn't asset us. from A+ that So of X outstanding business. it's and an day has need opportunities lot and work integration an a growth

and the new looking team we're and essentially capacity we thing opportunities where be in the same be year. of and there where will still have the say I'd disruptions. opportunities are a of to capacity is support So market. amount take we deal of continue stand-alone to what's like at can will this not, a ready they a next the as until that able where opportunities? There's activity in And if of end back look -- at I we do of do the advantage kind really TCI, can operate to think do. you tremendous see there of around early lot We saying, year

very So will prudent. approach of open the that we'll level opportunities. the we be to discipline But always, remain as very

next from the with Sinderen Capital RBC Van Jeff of Our comes Securities. question line

Riley. B. with It's

So wish future just that, endeavors. say leave, your let obviously, me see best Steve, but in disappointed to the you you

you or, And is then I to starting Just guess, what And maybe expectation there on touch their wanted as if of could to guess situation. with any migrate USPS they're if minute their disrupting also sort I specifically shift back that's is. seeing can I us now to there, new And the anything new migrating it platform? any? guess, system, a else we maintenance? doing circle in to then you how to management -- they're characterize can what help maybe you're

an in taking initially the a Obviously, expect down there's the are some you further business of When near and always go appreciate forecast some always we guided bumps do transition, Yes, disruption through ERP down. to disruption I term. on based you had the and it's level further question. the disruptions. we Obviously, guidance

is almost model. -- terms really in as PO a a this positive is kitchen like it this complicated traditional The operational in restaurant point in flow at is a look at crashing not of can is the order time. purchase how You

expect they inventory kinks a ERP have is what Once their part locations, why process and therefore, their the service to new contract. are complicated requirements on out, and postal implement than all And and more usage XXX in consignment we system. we activity We more very embedded worked as at processes, improve essentially which maintenance systems improve. it's have to do we're a is

purchasing kind it So of part contract, on from if a they we us. have they're once need it,

through the sites are the full before requirements sites So decreased that sure and obviously, sites work is They why they have fixing live, still the impact. than implementation. rather well near-term go going are have making forward really the decision made They have bringing which to as bring new we live. the

and the the And with finish So to that. work the start the will anticipation end see our recovery with of processes improve integrations and revenue goes recovery to the start that, is they'll then year. back that the towards the along you'll in

speak could Maybe thoughts if the Congratulations TCI could just initial closing I the your you line to there. to then And of time and on process integrating just on your we maybe turn guess, the acquisition. -- that.

Yes.

doing, just a of but amount So bit we're that's aligned the there's real not question a work asset of an of that I'd tremendous near-term asked, a asset. A+ kind with strong it's little say Ken integration.

do look work them OEM who and and So got we the and problems have that have their we've for to bigger what that we've sitting to we that some making solved that got is at the support work. of we need large with support can back capabilities sure partners they opportunities shop capacity to call work,

Collins. the acquired more work supplier they week, So And time from X how strong or first spending much a in It's to such it's the fun. received a on business. that ago. business supplier weeks business grow we're We because key

TCI. see leverage where and So to really goal and grow. be for is strong very That's the just nice to relationships, the near-term those will focus

comes question the of from DiPalma line William next Blair. with Louie Our

CFO and Aerospace to to Desser also John, both role. lucky pleasure new instrumental and with, company knowledge in expansion. Did how is were and Tarang $XXX Steve, new industry with have XX-year VSE's a the million And an transformation new the the you in new and scope facility facilities also to now, right general, are have distribution for in And capabilities those have that the business via and Asia to like Hamburg pushing Pratt to development led renewal? on change work mentioned like & your was congrats renewals activity? Whitney agreement in anchor, you. more OEMs as upon a your your you Europe the you regions add Canada

Yes.

couple of there. questions a So in

First, yes.

have So for this we don't a contracts lot recompete year. up of

of quiet a So in that's one is very is a of terms few. thing. the actually This very which year bad not renewals,

an we scope to is on and see early program, that pleased renewal work. that So were of very expanded

So COVID in of had think here the We of back, X kind about if I've been for middle you years. it.

market. X As signed now in we've OEM coming and the these or partners that customers ourselves really programs years with these are up X ago we've renewal, proven for

line, in we ability the very for expanded do only we get our Hamburg, pretty regard not that quarter that we scope. our With opportunity to confident but signed the year. in share ability gain. confident finish was It's an agreement a fourth facility, great last expand of feel these So feel across to renewals to our in

facility have shipping of in days. stood record signed -- think I the outside in XXX within up a under park U.S. time, and we lease

products the we program fluid to out number terms the want on very, in sure we door. ground aircraft ship a of is So stable. of make that program very that It's

and that distribution products. get opportunities more which for But to want big we at we are because Brexit, sure remains see high this continue definitely into constrained focus that. little region, But Desser make And more add has performance acquisition, So just a before it's a you'll It's European the U.K. very with we the in of as XXXX. a bit seeing us we to growth site. point.

be product opportunities facility in the putting more and in to will general that and come, with commercial see lot year the aviation business in both that towards beginning some We of back Europe. of end a just OEMs those

last aftermarket strong, continue in aftermarket the And an very of do see long-term has now? a perspective, subsided to particularly visibility also and in from of industry terms production demand -- being from to you significantly see demand. right it Boeing's which was hot as lot Has continue general, increased year,

after I tend demand day is for or to they needed that the a something I Yes. to -- an they customer aftermarket mean, order. before you it need part calls

there's not amount business. backlog an OEM with you of like tremendous a have So

So today. I there's tend unique out say a market robust experiencing lot more bit market of a how a still we is data to would that we see look. points in I there, is we somewhat of conservative XXXX, I little a out this can as is as into and think far a What be are where horizon of

compared to but that and So cargo have down as bit takes probably I'd commercial with year. puts the takes, market, commercial in very, a little strong say, stronger and is year, say, puts a very body last as and robust it remains was you than last

year, as commercial to will and in So year being we continue XXXX anticipate all a XXXX a strong well. strong be XXXX, strong all, was year think a we

exposure expect does remain your Canada, & -- aviation. And with a And customer. big more skewed obviously to business you your Does grow? time, over it general exposure and Whitney do commercial Pratt do towards aviation you

rotorcraft. commercial. Pratt only support is But aviation a at mean, There's little of bit I engine if there. does look in what they portfolio, not general work & it is Canada their you Yes. -- of in Whitney business do regional

really the their is work. with Pratt very TCI U.S. You've does that all Hartford got on type partner large a commercial and Pratt of work.

a it. component So commercial going to the to Canada Pratt never is have work

the guess, I -- to And think should, has right? commercial a I commercial that exposure, for TCI expand But opportunity more give acquisitions future you lot more in work?

culture and TCI their what OEM-centric we in start customer their and mean us the support they culture attractive at strategy. of number was excellence I highest one, they to levels. with They're what Yes. user was, and how in do end is

they is and focused business a and they part at more programs, balance the look that was our the general commercial of the that are as our focused, business MRO, business business terms is way. between aviation most of more to shift signed, commercial us. distribution that our But which I more MRO aviation distribution little skewed and and we've in the general are diversification business a So because and then attractive large of bit

So as nice as a way, other of in terms helps this provide balance both base channel. the customer revenue really well

Our with The Instructions] from line of question Company. the Josh next [Operator comes Benchmark Sullivan

Desser pieces in John, you TCI, time, here cetera. relatively short aviation, executed strategic on several large et

be is years. You did mention by changes aftermarket commercial? But rate year, organic the Aviation or will underlying attractive bucket and the for there growth or think distribution, in MRO, still this any Bizjet next that services by you in several

on but growth the ago, the healthy into saw actually, of I so months we inside business look of No. I in puts we slowdown a just I kind down still -- into very balance stuff and balanced market little which nice it a business kind the reports business cargo takes, flash mentioned business. green I We're when is nice the ago, of pages and our strong We some and is general was it's really business of mean, aviation really the and daily again our market. either. the There's is is some nice But as reviews, of as there's there's across much like with down. is a no, obviously, how minute these of do performance there not -- growing a -- inside units break when script that the much we reviews and work robust seeing growth of last of rate is very, each night have a XX mean, Aviation, what our really business board. in

in fair with So across a channels cargo, exception we're base amount and capabilities. the seeing, of both right now, growth of of balance and customer terms revenue

mentioned just as then and fuel expectations? you any thought where then the And taken as You you maybe the resources it has wouldn't? Honeywell in side, control it transition far there with comments? And the more outpacing are

Yes.

bring had new said revenue the I that And us. bring enough the to start ramp and brought I for mean, about I'm the that there'll of new ecstatic Thomas team say needed because can't we've team before the run quality to this we the earnings because Ben some of up be as strength on been to to first think, we cost on -- business. it's team. I a just forward And just and a has capability we able about all,

financial it's the on we performing the or is is then performance ahead transition, above model that the this So from we're slow OEM transitioning be, that and methodical is the The it of with both point. have but the should relationships OEM and plan. at our and solid, extremely that partners way

beyond clear the on quarter maybe any one -- then the Office guess, U.S. there once in change And U.S. back expect? be you just back margin I or we're that to profile fourth normal to the is new Post system, rates, to

No, it's a great question.

months. next we to XX deployed think what There's tremendous at continue their of vehicles a vehicle being the look like. looks I still XX over that and to not new deployment amount new

we back -- and up systems just recovery really running. the we're just and need the back to So get

do the everything of transitions have the we'll that do level they we word? all a what's right time go -- can. Customers and so. Complication through ERP So as

one of we process. number their in how this locations. positive think be a I'd the of are embedded which little the And process. actual I complexity of of the say And the is the that, greater because happens to means positive

ride for just with need them we out So support wait and and to the recovery. them this

comments ramp end Memphis growth And new commercial on endeavors new up side, I any there on there? some Any facility guess I'll just nice fleet. the the in or

opportunity I'm Yes, bullish the even more actually and about the ramp-up. set feeling

We just few again, talent doing launched with place in job. that an who's outstanding them our had who's business. I with it site in starts -- fulfillment there We mean, leader partners. a of we really really a -- new have our call

say where we'll our revenue not details what the that from website. websites, have on a And so forward. current in is So and inventory continued I'd about our of other put hopefully, very I'm more new share third only not we the we'll But with own our quarter, large growth partner, on just coming excited partners.

honestly, to see still unlimited business. just and tremendous positive just grow in we we scale say as -- a of upside a that So way, I amount real continue

line comes Securities. Michael of question with Truist Ciarmoli next from Our the

with XX% come assumptions? XX% just Steve, John a I or growth the changes like softer, aftermarket up $XX organic did to changed bit organic little I to the to finer underlying know but We've the any maybe if a this. bit. aviation. Bizjet called to with million Are you just cargo is on report where to you little -- old and softer. in some comes a seen trying can make out TCI. I'm understand $XX down aviation, little organic point million of your sounds put scenario a -- a anything guys you It growth

No, changed. nothing has

changed So nothing we would our can has expectations. I say on but

when just than XX% to anticipated. put at look Investor the the we in up Day that out at you what compare last And quarter, stronger year we that's what organically. If first we November,

then And point clarity of just fleet. on

XQ Was that XX%. assuming the down about right, postal whole talked just XQ? in and not for You segment,

And respectively, down post. second live. fiscal and associated it's just third It's quarter, in with Correct. XX% XX% the to

segments? but there guess, from guys and back market you then, you're share in And some mean, mean, are I of And I this M&A out runway I Is repair there marketplace? there's not share little dig that obviously, it a even, John, gains you disruption the marketplace. only certain taking in there? for capacity up Can Is pick there capabilities from? coming to tight deeper just the what to specific share? more capabilities, MRO. from aviation, the called just you maybe

a Yes, there's I things. couple think of

a being team, different We're world, let's There's We're that's I think offset. first The well. now. enjoy I market work all to times OEM doing my tell think talked taking of anybody well. talk of is one, Number I couple about paths. share. doing some the you the all,

So continue a partner of more Steve, we've really OEM got because you going it's XXX this an on it how call to us. new a describe I'd that I authorizing or gain really capability know if capabilities MAX, and strong for don't to support authorized share predominantly that's would that is ramp. U.S. to with OEM avionics program the their first

And is a is there's So tremendous hydraulics in our you and opportunity we and the see -- look I'd say that's that's their for additional just customer inside XXX then just of shops, our gains there. opportunity our when of we're retirement last and fuel new see with providing amount shop types. our areas and Southwest we beginning, thing and pneumatics program add I'd say different revenue avionics, different is supporting us. I'd where have, we

those for down them providing the parts -- of come many additional that and the shops. repair in and repair opportunities to our help that we monetize help tear as need So for them XXXs product, aircraft those on are those is repair

what rate very, do pretty the it's high some some the months not So you're platform at a business. of yesterday growth stable It's plateauing really in of X very this terms over our ago see I'd years you numbers program. seeing it's all or say was And and and to of as nice just just, at you very growth. general markets. not across growth. in is as It's mean Obviously, robust of stay all performing one saw place. is there, I continues one But I business by consistent looking our buckets aviation well. business again,

capacity of in lot a market. that not So

our profiles customers. we on market the a of runway pretty still terms and that So in that, us able has based our of do good being look out demand capacity feel to fill

others I I really And EBITDA out up one there in some mean, even initial was And you some margins that that higher the Last of these I margins Aviation you that put had. you costs? good past those once quantify think those kind kind costs segment quarter. costs, some what and Or and a of to higher there. that in give costs were push drag? Can startup guess, called does maybe continue? of you get the some does I you of opportunity

scale full in we 'XX. do opportunity I'll over as and higher. what numerical rates I'll out not call say does to Tarang. to and higher an are previously ahead the I'd say mix margin should else in continue the and it year? Maybe years the inflect then we gain But 'XX I'd it values, think for call anything go in represent Yes. the to start, on to you add with specify material Mike. hand reason enough want is, of out of that terms in further is there communicated expansion why it We Tarang, market and costs margin is terms

the and want margin of quarter with to question Yes. starting high us our margin at certainly I out rate. a variability the associated add the

is slightly that's kind lower in margins run things here One are margin the our built CPI of than of the rate.

the as So you'll year. continue impact on throughout we see that

And I'll depend all answer. It's mix. give qualitative going you on to the

lower obviously some work. So then within our margin we've extremely business, and got some high work margin

the Now see the positive MRO area. of as higher-margin there, I end, on the ahead, that out some it's look I in have at some we that opportunities growth

continues is there. thing as program that is Honeywell to our to revenue fuel opportunities than controls of that a driver and margin would The I see that second more a driver ramp, highlight we'll continue

in a Or permanently TCI or the for kind segment of that margins opportunity an average there historical? lower? will bit line become to Is with be

time. answer future maybe maybe kind understand a bit and the better, we'll give business to think I that of it a in time some

no further back to Cuomo turn There like this floor I'd the time. are questions closing to Mr. for comments. at over

Thank Have earnings VSE. rest our your you and forward during day. all in to much for second of of very We with it look quarter great you appreciate your continued support speaking July a call.

This concludes teleconference. today's

You may disconnect time. a at you participation, wonderful lines and your this your have day. for Thank