UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended ~~September~~March 3031, ~~2025~~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

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

Title of each class

Trading Symbol

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 ~~October~~May 245, ~~2025~~2026: 2028,~~686~~057,~~361~~152

	TABLE OF CONTENTS
		Page
PART I	FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Unaudited Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	4
	Unaudited Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025	4
	Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024	5
	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025	5
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024	6
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2026 and 2025	6
	Unaudited Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024	7
	Unaudited Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2026 and 2025	7
	Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	9
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025	8
	Notes to Unaudited Consolidated Financial Statements	109
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2320
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	2723
ITEM 4.	Controls and Procedures	2723
PART II	OTHER INFORMATION
ITEM 1.	Legal Proceedings	2725
ITEM 1A.	Risk Factors	2725
ITEM 2.	Unregistered Sales of Equity Securities, ~~Use of Proceeds~~ and ~~Issuer~~Use ~~Purchases~~ of ~~Equity Securities~~Proceeds	2825
ITEM 5.	Other Information	2825
ITEM 6.	Exhibits	2926
Signatures		3027

-2-

Table of Contents

Forward-Looking Statements

This quarterly report on Form 10-Q (“Form 10-Q”) 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, ~~including,~~some ~~but~~of ~~not~~which ~~limited~~are tounknown, ~~those identified elsewhere in this document,~~ including ~~in Item 1A~~, ~~Risk~~without ~~Factors~~limitation, ~~Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 3, Quantitative and Qualitative Disclosures About Market Risk, as well as with respect to the~~ risks ~~described~~related ~~in Item 1A, Risk Factors,~~ to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 3, 2025 (“2024 Form 10-K") and in Item 1A. Risk Factors of this report. 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~~•the ~~are~~performance ~~cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as~~ of the ~~date~~aviation ~~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.~~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 Company's ability to realize the expected strategic benefits and cost synergies from the PAG Acquisition (as defined herein) after taking into account any business disruption, maintenance of customer, employee, or supplier relationships, management distraction during the integration process or other factors beyond the Company's control;

•the accuracy of the Company's assumptions relating to the PAG Acquisition;

•the significant expenses that have been incurred and will be incurred in connection with the PAG Acquisition;

•the Company's ability to successfully integrate and achieve the strategic and other objectives, 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") and in Item 1A. Risk Factors of this report.

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.

-3-

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VSE CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

	September 30,		December 31,
	March 31,		December 31,
(in thousands, except share and per share amounts)	~~2025~~2026		~~2024~~2025
Assets
Current assets:
Cash and cash equivalents	$	81,~~784~~239,407	$	2969,~~505~~358
Receivables (net of allowance of $5.4 million and $4.1 million, respectively)	176,399		158,104
Receivables (net of allowance of $7.3 million and $7.2 million, respectively)	216,504		190,732
Contract assets	3445,~~027~~723		2941,~~960~~468
Inventories	~~464~~625,~~315~~737		~~434~~553,~~059~~834
Prepaid expenses and other current assets	3833,~~755~~569		3037,~~899~~937
Current assets held-for-sale	—		282,820
Total current assets	2,160,940		893,329
Total current assets	722,280		965,347
Property and equipment (net of accumulated depreciation of $37.9 million and $34.2 million, respectively)	93,821		91,098
Property and equipment (net of accumulated depreciation of $30.8 million and $21.3 million, respectively)	82,986		71,041
Intangible assets (net of accumulated amortization of $111.8 million and $100.2 million, respectively)	318,809		295,962
Intangible assets (net of accumulated amortization of $93.5 million and $82.7 million, respectively)	201,849		197,157
Goodwill	638,889		641,242
Goodwill	428,705		428,263
Operating lease right-of-use assets	48,272		50,151
Operating lease right-of-use assets	42,975		43,225
Note receivable	27,735		27,041
Note receivable	26,342		—
Other assets	22,197		29,755
Other assets	55,310		37,597
Total assets	$	3,310,663	$	2,028,578
Total assets	$	1,560,447	$	1,742,630
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt	$	729,~~500~~924	$	307,~~000~~500
Accounts payable	~~112~~147,~~425~~910		~~145~~154,~~492~~506
Accrued expenses and other current liabilities	6165,~~357~~550		5273,~~749~~161
Dividends payable	2,~~069~~806		2,~~059~~339
Current liabilities held-for-sale	—		68,200
Total current liabilities	246,190		237,506
Total current liabilities	183,351		298,500
Long-term debt, net of current portion	331,051		285,304
Long-term debt, less current portion	348,596		400,173
Deferred compensation	4,613		5,918
Deferred compensation	7,331		7,262
Long-term operating lease obligations	41,557		43,693
Long-term operating lease obligations	37,609		39,498
Deferred tax liabilities	16,782		12,394
Other long-term liabilities	~~220~~4,254		94,~~011~~955
Total liabilities	~~577~~644,~~107~~447		~~754~~589,~~444~~770
Commitments and contingencies (Note 8)
Stockholders' equity:
Common stock, par value $0.05 per share; authorized 44,000,000 shares; issued and outstanding 20,686,361 and 20,590,496, respectively	1,034		1,030
Common stock, par value $0.05 per share, authorized 44,000,000 shares; issued and outstanding 28,055,592 and 23,398,046, respectively	1,403		1,170
Additional paid-in capital	~~597~~2,~~210~~241,751		~~591~~1,~~600~~041,483
Retained earnings	~~384~~421,~~416~~891		~~392~~395,~~484~~643
Accumulated other comprehensive income	~~680~~1,171		~~3,072~~512
Total stockholders' equity	~~983~~2,~~340~~666,216		~~988~~1,~~186~~438,808
Total liabilities and stockholders' equity	$	13,~~560~~310,~~447~~663	$	12,~~742~~028,~~630~~578

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

-4-

Table of Conten ts

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

	Three months ended September 30,				Nine months ended September 30,
			Three months ended March 31,
(in thousands, except share and per share amounts)	~~2025~~		~~2024~~		~~2025~~2026		~~2024~~2025
Revenues:
Products	$	~~176,035~~	$	~~118,363~~	$	~~510~~202,~~189~~350	$	~~341~~160,~~834~~551
Services	~~106,874~~		~~85,279~~		~~300~~122,~~904~~230		~~217~~95,~~019~~494
Total revenues	~~282,909~~		~~203,642~~		~~811~~324,~~093~~580		~~558~~256,~~853~~045
Costs and operating expenses:
Products	~~147,682~~		~~99,887~~		~~429~~164,~~377~~292		~~289~~136,~~172~~867
Services	~~94,486~~		~~77,015~~		~~270~~112,~~510~~289		~~197~~86,~~455~~229
Selling, general and administrative expenses	~~667~~		~~2,542~~		56,~~594~~201		92,~~247~~311
Earn-out receivable fair value adjustments	23,300		—		29,200		—
Amortization of intangible assets					9,050		6,134
Lease abandonment and termination (benefits) costs	—		(652)		—		12,205
Total costs and operating expenses					291,832		231,541
Amortization of intangible assets	6,687		4,778		19,308		12,457
Operating income					32,748		24,504
Total costs and operating expenses	272,822		183,570		753,989		520,536
Interest (income) expense, net					(1,402)		7,939
Operating income	10,087		20,072		57,104		38,317
Income from continuing operations before income taxes					34,150		16,565
Interest expense, net	4,339		8,987		18,723		28,003
Provision for income taxes					5,095		2,597
Income from continuing operations before income taxes	5,748		11,085		38,381		10,314
Net income from continuing operations					29,055		13,968
Provision for income taxes	2,157		2,343		7,184		1,318
Loss from discontinued operations, net of tax					—		(22,941)
Net income from continuing operations	3,591		8,742		31,197		8,996
Net income (loss)					$	29,055	$	(8,973)
Income (loss) from discontinued operations, net of tax	321		2,908		(33,061)		(6,734)
Net income (loss)	$	3,912	$	11,650	$	(1,864)	$	2,262
Earnings (loss) per share:
Basic
Continuing operations	$	~~0.17~~	$	~~0.47~~	$	1.5106	$	0.5268
Discontinued operations	~~0.02~~		~~0.16~~		~~(1.60)~~—		(01.3911)
	$	~~0.19~~	$	~~0.63~~	$	(01.~~09)~~06	$	(0.1343)
Diluted
Continuing operations	$	~~0.17~~	$	~~0.47~~	$	1.5004	$	0.5267
Discontinued operations	~~0.02~~		~~0.16~~		~~(1.59)~~—		(01.3911)
	$	~~0.19~~	$	~~0.63~~	$	(01.~~09)~~04	$	(0.1344)
Weighted average shares outstanding:
Basic	~~20,681,203~~		~~18,425,643~~		2027,~~656~~497,~~680~~210		1720,~~125~~617,~~502~~949
Diluted	~~20,756,508~~		~~18,479,123~~		2027,~~742~~834,~~957~~475		1720,~~211~~740,~~825~~319
Dividends declared per share	$	~~0.10~~	$	~~0.10~~	$	0.3010	$	0.3010

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

-5-

Table of Conten ts

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three months ended September 30,					Nine months ended September 30,
					Three months ended March 31,
(in thousands)	~~2025~~		~~2024~~			~~2025~~		2026		~~2024~~		2025
Net income (loss)	$	~~3,912~~	$	~~11,650~~		$	~~(1,864)~~	$	29,055	$	~~2,262~~	$	(8,973)
Other comprehensive loss, net of tax:
Other comprehensive income (loss), net of tax:
Change in fair value of interest rate swap agreements, net of tax	~~(240)~~		~~(4,645)~~			~~(2,392)~~		659		~~(1,920)~~		(1,454)
Total other comprehensive loss, net of tax	(240)		(4,645)			(2,392)				(1,920)
Total other comprehensive income (loss), net of tax								659				(1,454)
Comprehensive income (loss)	$	~~3,672~~	$	~~7,005~~		$	~~(4,256)~~	$	29,714	$	~~342~~	$	(10,427)

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

-6-

Table of Conten ts

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity

(Unaudited)

	Three months ended September 30, 2025
	Three months ended March 31, 2026
				AdditionalPaid-InCapital		RetainedEarnings		Accumulated OtherComprehensiveIncome		TotalStockholders'Equity
	Common Stock
(in thousands, except per share data)	Shares	Amount
Balance at June 30, 2025	20,677	$	1,034	$	595,001	$	382,572	$	920	$	979,527
Balance at December 31, 2025	23,398	$	1,170	$	1,041,483	$	395,643	$	512	$	1,438,808
Net income	—	—		—		329,~~912~~055		—		329,~~912~~055
Stock-based compensation	9	—		2,209		—		—		2,209
Issuance of common stock, net	4,588	229		828,757		—		—		828,986
Other comprehensive loss, net of tax	—	—		—		—		(240)		(240)
Proceeds from stock purchase contract issued under tangible equity units, net of issuance costs	—	—		375,302		—		—		375,302
Dividends declared ($0.10 per share)	—	—		—		(2,068)		—		(2,068)
Stock-based compensation (a)	70	4		(3,791)		—		—		(3,787)
Balance at September 30, 2025	20,686	$	1,034	$	597,210	$	384,416	$	680	$	983,340
Other comprehensive income, net of tax	—	—		—		—		659		659
Dividends declared (0.10 per share)	—	—		—		(2,807)		—		(2,807)
Balance at March 31, 2026	28,056	$	1,403	$	2,241,751	$	421,891	$	1,171	$	2,666,216
(a) Stock-based compensation resulted in a net debit to additional paid-in capital due to the Company’s share price appreciation resulting in tax withholdings upon vesting exceeding stock-based compensation expense.

	Three months ended September 30, 2024
	Three months ended March 31, 2025
				AdditionalPaid-InCapital		RetainedEarnings		Accumulated OtherComprehensiveIncome		TotalStockholders'Equity
	Common Stock
(in thousands, except per share data)	Shares	Amount
Balance at June 30, 2024	18,420	$	921	$	403,666	$	371,872	$	4,857	$	781,316
Balance at December 31, 2024	20,591	$	1,030	$	591,600	$	392,484	$	3,072	$	988,186
Net income	—	—		—		11,650		—		11,650
Net loss	—	—		—		(8,973)		—		(8,973)
Stock-based compensation	979	—3		~~1,317~~50		—		—		~~1,317~~53
Other comprehensive loss, net of tax	—	—		—		—		(41,~~645~~454)		(41,~~645~~454)
Dividends declared ($0.10 per share)	—	—		—		(12,~~842~~068)		—		(12,~~842~~068)
Balance at September 30, 2024	18,429	$	921	$	404,983	$	381,680	$	212	$	787,796
Balance at March 31, 2025	20,670	$	1,033	$	591,650	$	381,443	$	1,618	$	975,744

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

-7-

Table of Conten ts

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of ~~Stockholders'~~Cash ~~Equity (continued)~~Flows

(Unaudited)

	Nine months ended September 30, 2025
		Three months ended March 31,
								AdditionalPaid-InCapital		RetainedEarnings		Accumulated OtherComprehensiveIncome		TotalStockholders'Equity
(in thousands)		2026				2025
	Common Stock
						(a)
(in thousands, except per share data)	Shares			Amount
Cash flows from operating activities:
Balance at December 31, 2024	20,591			$	1,030			$	591,600	$	392,484	$	3,072	$	988,186
Net income (loss)		$	29,055			$	(8,973)
Net loss	—			—				—		(1,864)		—		(1,864)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation	95			4				5,610		—		—		5,614
Depreciation and amortization		12,747				9,905
Other comprehensive loss, net of tax	—			—				—		—		(2,392)		(2,392)
Amortization of debt issuance cost		440				332
Dividends declared ($0.30 per share)	—			—				—		(6,204)		—		(6,204)
Deferred taxes		5,415				(5,764)
Balance at September 30, 2025	20,686			$	1,034			$	597,210	$	384,416	$	680	$	983,340
Stock-based compensation		4,581				3,522
Impairment and loss on sale of business segments		—				33,952
Loss on sale of property and equipment		3				10
Gain on settlement of corporate-owned life insurance		(357)				—
Interest income on note receivable		(694)				—
Changes in operating assets and liabilities, net of impact of acquisitions:
Receivables		(25,772)				(19,393)
Contract assets		(4,755)				(920)
Inventories		(71,544)				(6,359)
Prepaid expenses and other current assets and other assets		515				(29,910)
Operating lease assets and liabilities, net		396				372
Accounts payable and deferred compensation		(10,847)				(10,892)
Accrued expenses and other liabilities		(1,447)				(12,514)
Net cash used in operating activities		(62,264)				(46,632)
Cash flows from investing activities:
Purchases of property and equipment		(6,457)				(2,875)
Proceeds from the sale of business segments, net of cash divested		—				2,746
Cash paid for acquisitions, net of cash acquired		(5,391)				—
Purchases of intangible assets		(16,000)				—
Proceeds from corporate owned life insurance settlements		760				—
Net cash used in investing activities		(27,088)				(129)
Cash flows from financing activities:
Borrowings on bank credit facilities		47,273				74,489
Repayments on bank credit facilities		(49,148)				(39,989)
Proceeds from issuance of common stock, net		829,457				—
Proceeds from issuance of tangible equity units, net		445,386				—
Payment of debt financing costs		(1,313)				—
Payment of taxes for equity transactions		(8,930)				(4,201)
Dividends paid		(2,340)				(2,060)
Other		(984)				—
Net cash provided by financing activities		1,259,401				28,239
Net increase (decrease) in cash and cash equivalents		1,170,049				(18,522)
Cash and cash equivalents, beginning of period		69,358				29,030
Cash and cash equivalents, end of period		$	1,239,407			$	10,508
(a) The cash flows related to discontinued operations and held-for-sale assets and liabilities have not been segregated, and remain included in the major classes of assets and liabilities. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. See Note (3) "Discontinued Operations".

	Nine months ended September 30, 2024
				AdditionalPaid-InCapital		RetainedEarnings		Accumulated OtherComprehensiveIncome		TotalStockholders'Equity
	Common Stock
(in thousands, except per share data)	Shares	Amount
Balance at December 31, 2023	15,757	$	788	$	229,103	$	384,702	$	2,132	$	616,725
Net income	—	—		—		2,262		—		2,262
Issuance of common stock	2,430	122		161,571		—		—		161,693
Stock issuance in connection with acquisition	127	6		9,994		—		—		10,000
Stock-based compensation	115	5		4,315		—		—		4,320
Other comprehensive loss, net of tax	—	—		—		—		(1,920)		(1,920)
Dividends declared ($0.30 per share)	—	—		—		(5,284)		—		(5,284)
Balance at September 30, 2024	18,429	$	921	$	404,983	$	381,680	$	212	$	787,796

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

-8-

Table of Contents

VSE CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

	Nine months ended September 30,
(in thousands)	2025		2024
	(a)		(a)
Cash flows from operating activities:
Net (loss) income	$	(1,864)	$	2,262
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	29,730		20,411
Amortization of debt issuance cost	1,266		997
Deferred taxes	(19,117)		(9,840)
Stock-based compensation	9,908		6,497
Impairment and loss on sale of business segments	47,046		16,867
Loss on sale of property and equipment	10		421
Lease abandonment and termination costs	—		12,205
Earn-out receivable fair value adjustments	29,200		—
Interest income on note receivable	(1,342)		—
Changes in operating assets and liabilities, net of impact of acquisitions:
Receivables	(23,243)		(32,720)
Contract assets	(2,954)		5,267
Inventories	(26,522)		(26,808)
Prepaid expenses and other current assets and other assets	(8,991)		(8,232)
Operating lease assets and liabilities, net	837		(10,442)
Accounts payable and deferred compensation	(42,067)		(67,860)
Accrued expenses and other liabilities	(2,549)		4,563
Net cash used in operating activities	(10,652)		(86,412)
Cash flows from investing activities:
Purchases of property and equipment	(14,513)		(17,439)
Proceeds from the sale of business segments, net of cash divested	138,816		42,118
Cash paid for acquisitions, net of cash acquired	(47,745)		(112,206)
Net cash provided by (used in) investing activities	76,558		(87,527)
Cash flows from financing activities:
Borrowings on bank credit facilities	648,066		527,165
Repayments on bank credit facilities	(720,825)		(507,165)
Proceeds from issuance of common stock	463		161,693
Payment of debt financing costs	(2,584)		—
Payment of taxes for equity transactions	(5,077)		(2,758)
Dividends paid	(6,195)		(5,019)
Net cash (used in) provided by financing activities	(86,152)		173,916
Net decrease in cash and cash equivalents	(20,246)		(23)
Cash and cash equivalents, beginning of period	29,030		7,930
Cash and cash equivalents, end of period	$	8,784	$	7,907
Supplemental disclosure of noncash investing and financing activities:
Note receivable from the sale of business segment	$	25,000	$	—
(a) The cash flows related to discontinued operations and held-for-sale assets and liabilities have not been segregated, and remain included in the major classes of assets and liabilities. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. See Note (3) "Discontinued Operations".

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

-9-

VSE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~September~~March 3031, ~~2025~~2026

Table of Contents

(1) Nature of Operations and Basis of Presentation

Nature of Operations

VSE Corporation ~~(collectively~~, ~~with~~through its ~~consolidated~~ subsidiaries) (collectively, "VSE," or the "Company,") is a ~~leading~~diversified ~~provider~~aftermarket ofproducts ~~aftermarket~~and ~~parts~~services ~~distribution~~company serving commercial and ~~maintenance,~~government ~~repair~~markets. The Company's operations include aircraft and ~~overhaul~~airframe ~~("MRO")~~parts ~~services~~supply ~~for~~and ~~air~~distribution ~~transportation~~and ~~assets~~MRO ~~for~~services ~~commercial~~of aircraft components and ~~government~~engine ~~markets~~accessories. The Company operates inas one reportable segment aligned with the Company's operating segment: Aviation.

Basis of Presentation

The Company's accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to SEC Form 10-Q and Article 10 of SEC Regulation S-X. Therefore, such financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025 ("~~2024~~2025 Form 10-K"). In the Company's opinion, all adjustments, including normal recurring items, considered necessary for a fair presentation of results for the interim periods have been included in the accompanying unaudited consolidated financial statements. Operating results for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, ~~2025~~2026.

In February 2024, VSE entered into two separate agreements to sell substantially all of the Federal and Defense segment assets. Additionally, in April 2025, VSE completed the ~~previously announced~~ sale of all of the issued and outstanding shares of common stock of its Fleet segment. See Note (3) "Discontinued Operations" for further information. The consolidated financial statements present the results of operations for the Federal and Defense and Fleet ~~segment~~segments as discontinued operations for ~~all periods presented, and~~ the ~~related~~three ~~assets~~months ~~and~~ended ~~liabilities~~March ~~as held-for-sale as of December~~ 31, ~~2024~~2025.

In February 2024, VSE completed the sale of substantially all of the Federal and Defense segment assets. See Note (3) "Discontinued Operations" for further information. The consolidated financial statements present the results of operations for the Federal and Defense segment as discontinued operations for all periods presented.

Certain reclassifications, including reclassifications for discontinued operations, have been made to the prior period financial information. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates affecting the financial statements include fair value measurements, inventory provisions, collectability of receivables, valuation allowances on deferred tax assets, fair value of goodwill and other intangible assets and contingencies.

-109-

Table of Contents

(2) Acquisitions

~~2025~~Fiscal ~~Acquisition~~2025

Aero 3, Inc. ("Aero 3")

On December 23, 2025, the Company completed the acquisition of GenNx/AeroRepair IntermediateCo Inc., the parent company of Aero 3, Inc., for a total cash consideration, subject to working capital adjustments, of $346.4 million, net of cash acquired of $1.4 million. The acquisition was funded with proceeds from the Company's October 2025 underwritten public offering. Aero 3 is a diversified global MRO service provider and distributor supporting the wheel and brake aftermarket. The acquisition expands the Company's global aftermarket capabilities by broadening MRO, distribution, and proprietary product offerings to support commercial, business and general aviation operators while aligning with the Company's OEM-centric strategy.

The Company has not yet finalized the determination of the fair values allocated to various assets and liabilities, including, but not limited to, working capital and income taxes. Therefore, the allocation of the total consideration for the acquisition to the tangible and identifiable intangible assets acquired, and liabilities assumed, is preliminary until the Company obtains final information regarding their fair values, which could potentially result in changes to the Aero 3 opening balance sheet. Adjustments or changes to goodwill, assets or liabilities remain possible.

During the three months ended March 31, 2026, the purchase price allocation was adjusted as a result of working capital and measurement period adjustments. The adjustments were recorded as a result of new information obtained about facts and circumstances that existed as of the acquisition date. Such adjustments resulted in a $2.4 million decrease to goodwill, driven primarily by a $1.7 million decrease to income tax liabilities recorded within accrued expenses and other current liabilities and a $1.2 million decrease to deferred tax liabilities. The net decrease to goodwill was partially offset by other immaterial adjustments to contract assets, inventories, property and equipment, net, and accrued expenses and other current liabilities. The adjusted preliminary purchase price allocation is as follows (in thousands):



Receivables	$	12,244
Contract assets	1,324
Inventories	54,626
Prepaid expenses and other current assets	880
Property and equipment, net	4,404
Intangible asset - customer related	94,000
Goodwill	212,166
Operating lease right-of-use assets	5,163
Other assets	4,159
Total assets acquired	388,966
Accounts payable	(9,262)
Accrued expense and other current liabilities	(4,670)
Long-term operating lease obligations	(3,664)
Deferred tax liabilities	(20,000)
Other long-term liabilities	(4,971)
Total liabilities assumed	(42,567)
Net assets acquired, excluding cash	$	346,399

Goodwill resulting from the acquisition reflects the strategic advantage of expanding the Company's MRO services, parts distribution and proprietary solution capabilities to support the wheel and brake aftermarket. The value attributed to goodwill and customer relationships is not deductible for income tax purposes. The estimated value attributed to the customer relationship intangible assets is being amortized over a weighted average useful life of 12.1 years. Acquisition-related expenses related to the Aero 3 acquisition during the three months ended March 31, 2026 were not material.

-10-

Table of Contents

The following unaudited pro forma financial information presents the combined results of operations for Aero 3 and VSE Corporation for the three months ended March 31, 2025. The unaudited consolidated pro forma results of operations are as follows (in thousands):


	Three months ended March 31,
	2025
Revenue	$	279,882
Income from continuing operations	$	15,399

The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of Aero 3 as though it had occurred on January 1, 2024 and includes adjustments for intangible asset amortization; interest expense and debt issuance costs on long term debt; and acquisition and other transaction costs. The unaudited pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had occurred on January 1, 2024, nor is it indicative of future operating results.

PT6 Fuel Pumps License Agreement

On December 18, 2025, the Company entered into an Asset Purchase and License Agreement with an original equipment manufacturer for a purchase price of $10.8 million to exclusively manufacture, sell, market, distribute, and repair certain fuel pumps for use on the Pratt & Whitney PT6 engine series. The purchase price is expected to be mainly paid in 2026 and funded through the Company's sources of liquidity. As of March 31, 2026, the remaining liability associated with the purchase price is $5.4 million, which is recorded within accrued expenses and other current liabilities on the Company's consolidated balance sheets. The acquisition was accounted for as a business combination under ASC 805, Business Combinations. The acquisition is not material to the Company's consolidated financial statements.

The preliminary allocation of the purchase price comprised of net tangible assets of $2.1 million, goodwill of $1.9 million, and a customer-related intangible asset of $6.8 million, which is being amortized over a period of 16 years. Goodwill resulting from the acquisition reflects the strategic advantage of expanding existing distribution and MRO capabilities supporting certain PT6 fuel pumps. The value attributed to goodwill and customer relationships is deductible for income tax purposes. The Company has not yet finalized the determination of the fair values allocated to various assets and liabilities, including, but not limited to, working capital. Therefore, the allocation of the total consideration for the acquisition to the tangible and identifiable intangible assets acquired is preliminary until the Company obtains final information regarding their fair values, which could potentially result in changes to the opening balance sheet. Adjustments or changes to goodwill, assets or liabilities remain possible.

Acquisition-related expenses incurred and the pro-forma impact of the acquisition is not material to the Company’s results of operations.

Turbine Weld Industries, LLC ("Turbine Weld")

On May 1, 2025, the Company acquired Turbine Weld for a total cash consideration of $49.9 million, net of cash acquired of $0.9 million. The acquisition purchase price was funded by borrowings under the Company's ~~previous~~prior revolving credit facility. Turbine Weld is a specialized MRO service provider of complex technical and proprietary engine components for business and general aviation platforms. The acquisition strengthens the Company’s MRO portfolio of services by broadening technical capabilities and expanding the repair portfolio. The acquisition is not material to the Company's consolidated financial statements.

The preliminary allocation of the purchase price ~~resulted~~comprised inof net tangible assets, excluding cash acquired, of $12.6 million, goodwill of $13.3 million, and a customer-related intangible asset of $24.0 million, which is being amortized over a period of 10 years. Goodwill resulting from the acquisition of Turbine Weld reflects the strategic advantage of expanding the Company's MRO services to new customers. The value attributed to goodwill and customer relationships is deductible for income tax purposes. The Company has not yet finalized the determination of the fair values allocated to various assets and liabilities, including, but not limited to, ~~income~~working ~~taxes~~capital. Therefore, the allocation of the total consideration for the acquisition to the tangible and identifiable intangible assets acquired, and liabilities assumed, is preliminary until the Company obtains final information regarding their fair values, which could potentially result in changes to the Turbine Weld opening balance sheet. Adjustments or changes to goodwill, assets or liabilities remain possible.

Acquisition-related expenses related to the Turbine Weld acquisition were not material during the three months ended September 30, 2025. The Company incurred $1.5 million in acquisition-related expenses related to the Turbine Weld acquisition during the nine months ended September 30, 2025, which are included in selling, general and administrative expenses. The pro-forma impact of the acquisition is not material to the Company’s results of operations.

2024 Acquisitions

Turbine Controls, Inc. ("TCI")

On April 24, 2024, the Company completed the acquisition of TCI for a total consideration of $122.4 million. The total consideration consisted of cash consideration of $112.4 million, net of $1.2 million cash acquired, and in-kind payment in the form of shares of the Company's common stock with a value equal to approximately $10.0 million. The purchase price of this acquisition was funded by borrowings under the Company's previous revolving credit facility. TCI is a leading provider of aftermarket MRO support services for complex engine components, as well as engine and airframe accessories, across commercial and military applications. The acquisition presents an opportunity for the Company to accelerate its MRO strategy, including expanding the Company's repair capability offerings and adding several new OEM relationships.

-11-

Table of Contents

Acquisition-related expenses totaled $0.5 million for the three months ended March 31, 2025, which are included in selling, general and administrative expenses. The ~~final~~pro-forma ~~purchase~~impact ~~price~~of ~~allocation~~the acquisition is asnot ~~follows~~material ~~(in~~to ~~thousands):~~the Company’s results of operations.

Receivables	$	9,122
Contract assets	16,193
Inventories	5,512
Prepaid expenses and other current assets	570
Other assets	214
Property and equipment, net	6,434
Intangible asset - customer related	59,000
Goodwill	40,201
Operating lease right-of-use assets	7,832
Total assets acquired	145,078
Accounts payable	(9,764)
Accrued expense and other current liabilities	(5,624)
Long-term operating lease obligations	(7,339)
Total liabilities assumed	(22,727)
Net assets acquired, excluding cash	$	122,351
Cash consideration, net of cash acquired	$	112,351
VSE common stock, at fair value	10,000
Total	$	122,351

Goodwill resulting from the acquisition of TCI reflects the strategic advantage of expanding the Company's MRO services to new customers. The value attributed to goodwill and customer relationships is deductible for income tax purposes. The estimated value attributed to the customer relationship intangible assets is being amortized on a straight-line basis using a useful life of 10 years.

The Company incurred $0.1 million and $2.2 million in acquisition-related expenses related to the TCI acquisition during the three and nine months ended September 30, 2024, respectively, which are included in selling, general and administrative expenses.

The following unaudited pro forma financial information presents the combined results of operations for TCI and VSE Corporation for the three and nine months ended September 30, 2025, and 2024, respectively. The unaudited consolidated pro forma results of operations are as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Revenue	$	282,909	$	203,642	$	811,093	$	590,635
Income from continuing operations	$	3,591	$	8,937	$	31,197	$	9,796

The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of TCI as though it had occurred on January 1, 2023 and includes adjustments for intangible asset amortization; interest expense and debt issuance costs on long-term debt; and acquisition and other transaction costs. The unaudited pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had occurred on January 1, 2023, nor is it indicative of future operating results.

Kellstrom Aerospace Group, Inc. ("Kellstrom Aerospace")

On December 3, 2024, the Company completed the acquisition of Kellstrom Aerospace for a total consideration of approximately $188.9 million, consisting of cash consideration of $168.6 million, net of $10.6 million cash acquired, and in-kind payment in the

-12-

Table of Contents

form of shares of the Company's common stock with a value equal to approximately $20.3 million. The purchase price of this acquisition was funded by the Company's October 2024 underwritten public offering and borrowings under the Company's previous revolving credit facility. Kellstrom Aerospace is a diversified global distributor and service provider supporting the commercial aerospace engine aftermarket. The acquisition provides an opportunity to improve the Company's position in the commercial aviation aftermarket by expanding product and capability offerings both domestically and internationally, including participation in aircraft engine maintenance events.

The Company has not yet finalized the determination of the fair values allocated to various assets and liabilities, including, but not limited to, working capital and income taxes. Therefore, the allocation of the total consideration for the acquisition to the tangible and identifiable intangible assets acquired, and liabilities assumed, is preliminary until the Company obtains final information regarding their fair values, which could potentially result in changes to the Kellstrom Aerospace opening balance sheet. Adjustments or changes to goodwill, assets or liabilities remain possible.

During the nine months ended September 30, 2025, the purchase price allocation was adjusted as a result of a working capital settlement and to reflect measurement period adjustments based on new information obtained about facts and circumstances that existed as of the acquisition date. Such adjustments resulted in a $12.9 million decrease to goodwill, driven by a $8.4 million increase to deferred tax assets, a $2.3 million fair value step up to operating lease right-of-use assets, and a $2.2 million working capital settlement which reduced net purchase consideration.

The adjusted preliminary purchase price is as follows (in thousands):

Receivables	$	27,379
Contract assets	2,925
Inventories	37,686
Prepaid expenses and other current assets	2,723
Property and equipment, net	10,301
Intangible asset - customer related	41,900
Goodwill	87,804
Operating lease right-of-use assets	14,141
Deferred tax assets	8,210
Total assets acquired	233,069
Accounts payable	(27,750)
Accrued expense and other current liabilities	(6,153)
Long-term operating lease obligations	(10,300)
Total liabilities assumed	(44,203)
Net assets acquired, excluding cash	$	188,866
Cash consideration, net of cash acquired	$	168,599
VSE common stock, at fair value	20,267
Total	$	188,866

Goodwill resulting from the Kellstrom Aerospace acquisition reflects the strategic advantage of growing the Company's distribution and MRO capabilities in the commercial aerospace aftermarket. The value attributed to goodwill and customer relationships is not deductible for income tax purposes. The estimated value attributed to the customer relationship intangible assets is being amortized on a straight-line basis using a useful life of 8 years.

Acquisition-related expenses related to the Kellstrom Aerospace acquisition totaled $0.7 million for the nine months ended September 30, 2025 and $1.2 million for the three and nine months ended September 30, 2024, and are included in selling, general and administrative expenses.

-13-

Table of Contents

The following unaudited pro forma financial information presents the combined results of operations for Kellstrom Aerospace and VSE Corporation for the nine months ended September 30, 2025, and 2024, respectively. The unaudited consolidated pro forma results of operations are as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Revenue	$	282,909	$	252,226	$	811,093	$	696,086
Income from continuing operations	$	3,591	$	13,725	$	31,790	$	16,199

The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of Kellstrom Aerospace as though it had occurred on January 1, 2023 and includes adjustments for intangible asset amortization; interest expense and debt issuance costs on long-term debt; and acquisition and other transaction costs. The unaudited pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had occurred on January 1, 2023, nor is it indicative of future operating results.

(3) Discontinued Operations

Sale of Fleet Segment

OnIn April 1, 2025, VSE completed the sale of its Fleet segment for a total consideration of up to $230.0 million (the “Fleet Sale”). This consideration is comprised of $136.2 million of cash, net of $4.8 million cash divested. The consideration also includes a $25.0 million seller note and a potential earn-out payment of up to $65.0 million, subject to the achievement of certain milestones. The seller note is scheduled to mature in July 2030. See Note (11) "Fair Value Measurements" for information regarding the fair value of the earn-out~~, as the Company elected the fair value option in order to value the earn-out receivable~~. The Fleet Sale is consistent with the Company's long-term strategy of transforming to a pure-play aviation business focused on higher margin and higher growth aftermarket parts distribution and MRO businesses. The Company recorded a pre-tax impairment loss on the Fleet assets held-for-sale of $33.7 million during the three months ended March 31, 2025, which is included in loss from discontinued operations, net of tax in the consolidated statements of operations.

During the three months ended September 30, 2025, the Company recorded a pre-tax gain of $0.2 million related to a settlement of net working capital. During the nine months ended September 30, 2025, the Company recorded a total pre-tax loss of $46.8 million, inclusive of $3.8 million of transaction fees. The loss was comprised of a pre-tax impairment charge on the Fleet assets held-for-sale of $33.7 million and a pre-tax loss on the Fleet Sale of $13.1 million, which was primarily attributable to a $8.3 million adjustment of a deferred tax liability related to the pre-tax impairment from the first quarter of 2025 and the impact of working capital adjustments of $4.8 million. The total loss is included in income (loss) from discontinued operations, net of tax in the consolidated statements of operations.

Sale of Federal and Defense Segment

In February 2024, VSE entered into two separate agreements to sell substantially all the Federal and Defense segment's operational assets ("FDS Sale") for a cash consideration of $42.9 million. The ~~FDS Sale is consistent with the~~ Company's ~~long-term strategic growth strategy of transforming to a pure-play aviation business focused on higher margin and higher growth aftermarket parts distribution and MRO businesses. The Company~~ recorded a pre-tax loss on the FDS Sale of $0.2 million ~~during~~for the ~~nine~~three months ended ~~September~~March 3031, 2025 related to a settlement of net working capital, ~~and~~which ais ~~pre-tax loss of $12.7 million and transaction fees of $2.5 million for the nine months ended September 30, 2024. All such losses and transaction fees are~~ included in ~~income (~~loss) from discontinued operations, net of tax in the consolidated statements of operations.

~~-14-~~The components of loss from discontinued operations, net of tax for the three months ended March 31, 2025 consist of the following (in thousands):

Table of Contents


	Three months ended March 31,
		2025
Revenues		$	75,358
Costs and operating expenses		71,829
Income from discontinued operations		3,529
Other impairment		33,708
Loss on the sale of discontinued operations		244
Loss from discontinued operations before income taxes		(30,423)
Benefit for income taxes		(7,482)
Loss from discontinued operations, net of tax		$	(22,941)

The components of income (loss) from discontinued operations, net of tax for the three and nine months ended September 30, 2025 and 2024, consist of the following (in thousands):

	For the three months ended September 30,				For the nine months ended September 30,
	2025		2024		2025		2024
Revenues	$	—	$	69,970	$	75,358	$	248,526
Costs and operating expenses	—		66,341		71,865		241,194
Income from discontinued operations	—		3,629		3,493		7,332
Other impairment	—		—		33,708		4,204
(Gain) loss on the sale of discontinued operations	(157)		—		13,338		12,663
Total income (loss) before income taxes	157		3,629		(43,553)		(9,535)
(Benefit) provision for income taxes	(164)		721		(10,492)		(2,801)
Income (loss) from discontinued operations, net of tax	$	321	$	2,908	$	(33,061)	$	(6,734)

The assets and liabilities reported as held-for-sale consist of the following (in thousands):

		December 31,
		2024
Assets
	Cash and cash equivalents	$	(475)
	Receivables, net	39,459
	Inventories	142,259
	Prepaid expenses and other current assets	11,057
	Property and equipment, net	14,546
	Intangible assets, net	124
	Goodwill	63,190
	Operating lease right-of-use assets	10,101
	Other assets	2,559
	Total assets held-for-sale	$	282,820
Liabilities
	Accounts payable	$	42,099
	Accrued expenses and other current liabilities	9,446
	Long-term operating lease obligations	8,645
	Deferred tax liabilities	8,010
	Total liabilities held-for-sale	$	68,200

Selected financial information related to cash flows from discontinued operations is as follows (in thousands):

	For the nine months ended September 30,
	Three months ended March 31,
	2025		~~2024~~
Depreciation and amortization	$	731	$	~~2,229~~
Stock-based compensation (a)	$	(225)	$	~~586~~
Purchases of property and equipment	$	208	$	~~2,040~~
(a) Stock-based compensation benefit was recognized during the nine months ended September 30, 2025 due to forfeitures in the period.
(a) Stock-based compensation benefit was recognized during the three months ended March 31, 2025 due to forfeitures in the period.

-15-

Table of Contents

(4) Revenue

Disaggregation of Revenues

The Company's revenues are derived from the delivery of products to its customers and from services performed for ~~its~~ commercial and government customers. ~~A summary of revenues by customer for the three and nine months ended September 30, 2025 and 2024 is as follows (in thousands):~~

	Three months ended September 30,	Nine months ended September 30,
		2025		2024		2025		2024
Commercial		$	282,421	$	202,786	$	808,662	$	552,066
Government		488		856		2,431		6,787
Total		$	282,909	$	203,642	$	811,093	$	558,853

-12-

ATable ~~summary~~ of ~~revenues by type for the three and nine months ended September 30, 2025 and 2024 is as follows (in thousands):~~ Contents

	Three months ended September 30,	Nine months ended September 30,
		2025		2024 (a)		2025		2024 (a)
Repair		$	106,874	$	85,279	$	300,904	$	217,019
Distribution		176,035		118,363		510,189		341,834
Total		$	282,909	$	203,642	$	811,093	$	558,853
(a) Certain revenue amounts in the prior year have been reclassified to conform to current presentation of revenue type categories.

A summary of revenues by customer for the three months ended March 31, 2026 and 2025 is as follows (in thousands):


	Three months ended March 31,
		2026		2025
Commercial		$	320,323	$	254,953
Government		4,257		1,092
Total		$	324,580	$	256,045

A summary of revenues by type for the three months ended March 31, 2026 and 2025 is as follows (in thousands):


	Three months ended March 31,
		2026		2025
Repair		$	122,230	$	95,494
Distribution		202,350		160,551
Total		$	324,580	$	256,045

Contract Balances

Contract balances were as follows (in thousands):

September 30,

December 31,

March 31,

December 31,

Financial Statement Classification

~~2025~~2026

~~2024~~2025

Billed and billable receivables

Receivables, net

~~176~~216,~~399~~504

~~158~~190,~~104~~732

Contract assets - unbilled receivables

Contract assets

3445,~~027~~723

2941,~~960~~468

Contract liabilities

Accrued expenses and other current liabilities

69,~~559~~381

46,~~479~~891

During the three months ended March 31, 2026 and 2025, the Company recognized revenue that was previously included in the beginning balance of contract liabilities of $3.3 million and $2.4 million, respectively.

(5) Debt

	September 30,		December 31,
	2025		2024
Bank credit facility - term loan	$	298,125	$	277,500
Bank credit facility - revolving facility	61,616		155,000
Principal amount of long-term debt	359,741		432,500
Less: debt issuance costs	(3,645)		(2,327)
Total debt	356,096		430,173
Less: current portion	(7,500)		(30,000)
Long-term debt, less current portion	$	348,596	$	400,173

Long-term debt consisted of the following (in thousands):

On May 2, 2025, the Company entered into a new credit agreement, which provides for a $300 million term loan facility and a $400 million revolving credit facility, both maturing on May 2, 2030. The revolving credit facility includes an aggregate amount


	March 31,		December 31,
	2026		2025
Bank credit facility - term loan	$	294,375	$	296,250
Amortizing notes	71,967		—
Principal amount of long-term debt	366,342		296,250
Less: debt issuance costs	(5,367)		(3,446)
Total debt, net of debt issuance costs	360,975		292,804
Less: current portion	(29,924)		(7,500)
Total long-term debt, net of current portion	$	331,051	$	285,304

~~-16-~~As of March 31, 2026, the interest rate on the Company's outstanding term loan was 5.17%. The Company did not have any outstanding borrowings under its revolving credit facility as of March 31, 2026 and December 31, 2025. The Company had letters of credit outstanding of $0.7 million and $0.6 million as of March 31, 2026 and December 31, 2025, respectively.

In February 2026, the Company entered into an underwriting agreement relating to the issuance of tangible equity units which are comprised, in part, of senior unsecured amortizing notes. See Note (13) "Common Stock and Tangible Equity Units Public Offerings" for further discussion of the amortizing notes. The amortizing notes are payable in quarterly installments, each of which will constitute a partial repayment of principal and a payment of interest at a rate of 5.93% per annum, with a final installment payment date of February 1, 2029, unless settled earlier. Future required principal payments on the amortizing notes are as follows: $16.6 million for the remainder of 2026, $23.7 million in 2027, $25.1 million in 2028, and $6.5 million in 2029.

-13-

Table of Contents

~~of $30 million which is available through a sub facility in the form of letters of credit.~~ The ~~new credit agreement replaced the~~ Company's ~~existing~~deferred ~~term loan and revolving credit facility~~$2.4 million ~~The proceeds~~ of ~~the~~debt ~~term~~issuance ~~loan~~costs ~~were~~related ~~utilized~~ to ~~pay~~the ~~fees~~amortizing ~~and~~notes, ~~expenses~~which ~~incurred~~will inbe ~~connection~~amortized ~~with the new agreement and~~ to ~~repay,~~interest inexpense ~~full,~~over ~~amounts~~the ~~outstanding~~note ~~under~~term using the ~~previous~~effective ~~credit~~interest ~~agreement~~rate method.

~~Borrowings~~Subsequent under the new credit agreement accrue interest at either the term SOFR or ABR, plus in each case an applicable margin (based on the Company's Total Net Leverage Ratio). The ABR for any day is a fluctuating rate per annum equal to the highest of (i) the Federal Funds Effective Rate plus .50%; (ii) the Prime Rate and (iii) the daily SOFR rate plus 1%. The applicable margin for term SOFR loans ranges from 1.25% to 2.25% and for ABR loans from 0.25% to 1.25%. The Company also pays a commitment fee with respect to undrawn amounts under the revolving loan facility ranging from .20% to .30% (based on the Company's Total Net Leverage Ratio) and fees on letters of credit that are issued.Event

~~The~~On May 5, 2026, the Company ~~incurred~~entered $into a first amendment to its existing senior secured credit agreement, dated as of May 2, 2025 (as amended and restated, supplemented or otherwise modified, the "Credit Agreement"), which provides for, among other things, a new senior secured term loan B facility in an aggregate principal amount of $900.60 million of(the ~~fees~~"New inTerm ~~connection~~Facility") ~~with~~and an upsize to the ~~new~~Company's existing senior secured revolving credit ~~agreement,~~facility offrom ~~which~~$400.0 million to $2500.30 million ~~were~~("the ~~deferred~~Revolving asFacility"), ~~debt~~maturing ~~issuance~~on ~~costs~~May 5, 2033 and ~~will~~May be2, ~~amortized~~2030, torespectively. Borrowings under the amended Credit Agreement will accrue interest ~~expense~~at ~~over~~either the ~~remaining~~Term ~~term~~SOFR ofor ABR (as defined in the ~~agreement~~Credit Agreement), plus in each case an applicable margin, based on the Company's Net Leverage Ratio (as defined in the Credit Agreement). The amendment replaces the Company's existing term loan.

AsOn ofMay ~~September 30~~5, ~~2025~~2026, the ~~interest~~Company ~~rate~~borrowed on$900.0 million under the ~~Company's~~New ~~outstanding~~Term ~~term~~Facility. ~~loan~~Borrowings ~~borrowings~~under ~~and~~the ~~weighted~~New ~~average~~Term ~~interest~~Facility ~~rate~~were onutilized ~~its~~(i) ~~aggregate~~to ~~outstanding~~pay ~~revolving~~fees ~~facility~~and ~~were~~expenses ~~5.91%~~incurred ~~and~~in ~~5.99%,~~connection ~~respectively.~~with Asthe ofamended ~~September~~Credit 30Agreement, ~~2025~~(ii) ~~and~~to ~~December 31~~repay, ~~2024~~in full, amounts outstanding under the ~~Company~~prior ~~had~~term ~~letters~~loan, ofand ~~credit~~(iii) ~~outstanding~~to fund a portion of ~~$0.6 million~~the ~~and~~purchase ~~$0.8 million,~~price ~~respectively~~for the PAG Acquisition (as defined later).

Future required ~~term~~payments ~~loan~~on ~~and~~the ~~revolving~~New ~~facility~~Term ~~payments~~Facility, asto be paid in equal quarterly installments of ~~September~~$9.0 ~~30,~~million ~~2025~~per year beginning in September 2026, are as follows: ($4.5 million for the remainder of 2026, $9.0 million in ~~thousands):~~each year from 2027 through 2032, and $841.5 million in 2033.

Year Ending	Term Loan		Revolving Facility		Total
Remainder of 2025	$	1,875	$	—	$	1,875
2026	7,500		—		7,500
2027	11,250		—		11,250
2028	20,625		—		20,625
2029	22,500		—		22,500
2030	234,375		61,616		295,991
Total	$	298,125	$	61,616	$	359,741

Restrictive covenants of the Credit Agreement include a maximum Total Net Leverage Ratio and a minimum Interest Coverage Ratio. The Company was in compliance with the required ratios and other terms and conditions under its Credit Agreement as of March 31, 2026.

Restrictive covenants of the new credit agreement include a maximum Total Net Leverage Ratio and a minimum Interest Coverage Ratio. The Company was in compliance with the required ratios and other terms and conditions under its credit agreement as of September 30, 2025.

(6) Derivative Instruments and Hedging Activities

The Company's derivative instruments designated as cash flow hedges as of ~~September~~March 3031, ~~2025~~2026 were as follows (in thousands):

Notional Amount

Paid Fixed Rate

Receive Variable Rate

Settlement and Termination

Interest rate swaps

$150,000

2.8%

1-month term SOFR

Monthly through October 31, 2027

Interest rate swaps

$100,000

4.5%

1-month term SOFR

Monthly through July 31, 2026

The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company's floating rate debt. For the three ~~and nine~~ months ended ~~September~~March 3031, 2026 and 2025, the Company reclassified $0.5 1 million and $10.6 5 million, respectively, from accumulated other comprehensive income to interest (income) expense, net. The Company estimates that it will reclassify $01.40 million of unrealized gains from accumulated other comprehensive income into earnings in the twelve months following ~~September~~March 3031, ~~2025~~2026. See Note (11) "Fair Value Measurements" for the fair value of the interest rate swaps.

-17-

Table of Contents

(7) Earnings Per Share

Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares of common stock outstanding during each period. Shares issued during the period are weighted for the portion of the period that they were outstanding. The calculation of diluted earnings per common share includes the dilutive effects for the assumed vesting of outstanding stock-based awards and settlement of prepaid stock purchase contracts, which were issued as part of the Company's February 2026 issuance of tangible equity units. See Note (13) "Common Stock and Tangible Equity Unit Public Offerings" for further discussion of the prepaid stock purchase contracts, which are assumed to be outstanding at the minimum settlement rate of 0.2171 shares per prepaid stock purchase contract in determining weighted-average shares for basic EPS. Additional shares are included in determining weighted-average shares for diluted EPS based on the imputed settlement rate utilizing the volume weighted-average price of the Company's common stock during the period not to exceed 0.2660 shares per prepaid stock purchase contract, if dilutive. The antidilutive common stock equivalents excluded from the diluted per share calculation are not material.

-14-

Table of Contents

The weighted-average number of shares outstanding used to compute basic and diluted EPS were as follows:

	Three months ended September 30,		Nine months ended September 30,
		Three months ended March 31,
	2025	2024	2025	2024
			2026	2025
Basic weighted average common shares outstanding	20,681,203	18,425,643	20,656,680	17,125,502
Effect of basic shares:
Effect of dilutive shares	75,305	53,480	86,277	86,323
Common shares outstanding			26,276,384	20,617,949
Diluted weighted average common shares outstanding	20,756,508	18,479,123	20,742,957	17,211,825
Prepaid stock purchase contracts at minimum settlement rate			1,220,826	—
Basic weighted average common shares outstanding			27,497,210	20,617,949
Effect of dilutive shares:
Restricted stock awards			134,874	122,370
Prepaid stock purchase contracts at volume weighted-average price			202,391	—
Total dilutive shares			337,265	122,370
Diluted weighted average common shares outstanding			27,834,475	20,740,319

(8) Commitments and Contingencies

Contingencies

The Company may have certain claims in the normal course of business, including legal proceedings, against it and against other parties. Legal liabilities are recorded when it is probable that the outcome in a proceeding will be unfavorable and the related loss amount can be reasonably estimated. In the Company's opinion, the resolution of these claims will not have a material adverse effect on its results of operations, financial condition, or cash flows.

Further, from time-to-time, government agencies audit or investigate whether the Company's operations are being conducted in accordance with applicable contractual and regulatory requirements. Government audits or investigations of the Company, whether relating to government contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed, which could lead to suspension or debarment from future government contracting. Government investigations often take years to complete and many result in no adverse action against the Company. The Company believes, based upon current information, that the outcome of any such government disputes, audits and investigations will not have a material adverse effect on its results of operations, financial condition, or cash flows.

-18-

Table of Contents

(9) Business Segment

~~The~~Following ~~sale~~the sales of the Company's Fleet and Federal and Defense segments, ~~allow~~the ~~VSE~~Company tomanages ~~focus~~its onbusiness as a ~~long-term~~single ~~strategic~~reportable ~~growth~~and ~~strategy~~operating segment focused on higher margin and higher growth aftermarket parts distribution and MRO ~~businesses~~activities. ~~Following~~The ~~the~~Company's ~~sales~~single ofoperating ~~the~~segment ~~Fleet~~provides aftermarket MRO and ~~Federal~~distribution services to commercial, business and ~~Defense~~general ~~segments~~aviation, ~~management~~cargo, ofmilitary ~~the~~and ~~Company's~~defense, ~~business~~and ~~operations~~rotorcraft iscustomers ~~conducted~~globally. ~~under~~Core aservices ~~single~~include ~~reportable~~parts ~~operating~~distribution, ~~segment:~~MRO ~~Aviation~~services including engine components and accessories, fuel controls, avionics, pneumatics, hydraulics, wheel and brake, as well as rotable exchange and supply chain services.

The Company's ~~Aviation~~single operating segment ~~provides~~is ~~aftermarket~~the ~~MRO~~only segment for which separate financial information is available and ~~distribution~~for ~~services~~which tosegment ~~commercial,~~results ~~business~~are evaluated regularly by the Company's President and ~~general~~Chief ~~aviation,~~Executive ~~cargo~~Officer, ~~military~~who ~~and~~is ~~defense~~the Chief Operating Decision Maker ("CODM"), in deciding how to allocate resources and ~~rotorcraft~~in ~~customers~~assessing ~~globally~~performance. ~~Core~~As ~~services~~the ~~include~~Company ~~parts~~operates ~~distribution,~~under ~~MRO~~a ~~services~~single ~~including~~reportable ~~engine~~operating ~~components~~segment, ~~and~~the ~~accessories,~~CODM ~~fuel~~evaluates ~~controls,~~segment ~~avionics,~~performance ~~pneumatics,~~based ~~hydraulics,~~on ~~wheel~~net income (loss) and ~~brake~~considers budget-to-actual, sequential period and ~~rotable~~prior ~~exchange~~period comparisons on a monthly basis when making decisions regarding capital and ~~supply~~personnel ~~chain~~allocation. ~~services~~Segment assets are reported on the consolidated balance sheets as total assets. Net sales of the Company exclude intercompany sales as these activities are eliminated in consolidation.

The operating segment reported below is the only segment for which separate financial information is available and for which segment results are evaluated regularly by the Company's President and Chief Executive Officer, who is the Chief Operating Decision Maker ("CODM"), in deciding how to allocate resources and in assessing performance. As the Company operates under a single reportable operating segment, the CODM evaluates segment performance based on net income (loss) and considers budget-to15-actual, sequential period and prior period variances on a monthly basis when making decisions about allocating capital and personnel. The expenses listed below are viewed as significant segment expenses as part of the CODM’s evaluation.

Net sales of the Company exclude intercompany sales as these activities are eliminated in consolidation. The Company's segment information is as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
Revenues	$	282,909	$	203,642	$	811,093	$	558,853
Costs and operating expenses:
Segment costs (a)	228,161		166,850		659,576		455,727
Depreciation and amortization (b)	10,182		6,951		28,974		17,919
Allocated corporate cost (c)	6,326		4,406		17,707		12,993
Unallocated corporate costs	28,153		5,363		47,732		33,897
Total costs and operating expenses	272,822		183,570		753,989		520,536
Operating income	10,087		20,072		57,104		38,317
Interest expense, net	4,339		8,987		18,723		28,003
Provision for income taxes	2,157		2,343		7,184		1,318
Income (loss) from discontinued operations, net of tax	321		2,908		(33,061)		(6,734)
Net income (loss)	$	3,912	$	11,650	$	(1,864)	$	2,262

(a) Segment costs consist of material, labor, overhead, and selling, general, and administrative costs attributable to the Aviation segment. (b) This line item includes only depreciation and amortization attributable to the Aviation segment. (c) Primarily includes costs for information technology, human resources, accounting, and legal support services allocated to the Aviation segment.

-19-

Table of Contents

(10) Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 were as follows (in thousands):

	Carrying Amount
Balance as of December 31, 2024	$	428,263
Balance as of December 31, 2025	$	641,242
Acquisitions	13,342
Measurement period adjustments	(2,353)
Measurement period adjustments	(12,900)
Balance as of March 31, 2026	$	638,889
Balance as of September 30, 2025	$	428,705

Goodwill ~~increased~~decreased during the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026 in connection with ~~the acquisition of Turbine Weld during the period, offset by~~ measurement period adjustments for the ~~Kellstrom~~Aero ~~Aerospace~~3 acquisition. See Note (2) "Acquisitions" for further information.

Intangible Assets

Intangible assets consisted of the following (in thousands):

		Cost				Accumulated Amortization				Net Intangible Assets
	Weighted-average Useful Life(in years)			Gross Carrying Value				Accumulated Amortization				Net Carrying Value
September 30, 2025
March 31, 2026
Customer-related	12.2	$	~~295,350~~	$	403,974	$	~~(93,501)~~	$	(108,919)	$	~~201,849~~	$	295,055
December 31, 2024
Distribution rights	15.1			26,600				(2,846)				23,754
Customer-related		$	271,350			$	(74,193)			$	197,157
Total	12.4			$	430,574			$	(111,765)			$	318,809
Trade names		8,500				(8,500)				—
December 31, 2025
Total		$	279,850			$	(82,693)			$	197,157
Customer-related	12.2			$	396,150			$	(100,188)			$	295,962

~~The~~On ~~gross~~March ~~carrying~~28, ~~amount~~2026, ~~of customer-related intangibles increased during~~ the ~~nine~~Company ~~months~~entered ~~ended~~into ~~September~~an ~~30,~~amendment ~~2025, in connection with~~ (the ~~acquisition~~"Amendment") ofto ~~Turbine~~its ~~Weld~~Asset ~~during~~Purchase ~~the~~and ~~period~~License asAgreement ~~discussed~~with inHoneywell ~~Note~~International ~~(2)~~Inc. ("~~Acquisitions.~~Honeywell"), ~~The~~originally ~~increase~~executed ~~was~~in ~~offset~~September by2023, ~~intangible~~for ~~assets~~total ~~with~~consideration ~~a cost~~ of $87.58 million, ~~which were fully amortized as~~ of ~~December~~which ~~31,~~$5.3 million ~~2024,~~is ~~and~~payable ~~are~~in nocash. ~~longer~~The ~~being~~Amendment ~~reflected~~expands in the ~~intangible~~scope ~~asset values as~~ of ~~September~~rights ~~30,~~and ~~2025.~~extends ~~The~~the ~~weighted-average~~expected useful ~~life~~lives ~~for~~of ~~all~~certain ~~intangible~~underlying assets asacquired ofunder ~~September~~the ~~30,~~original ~~2025 is 12~~agreement.2 ~~years.~~

AsThe Company accounted for the Amendment as an asset acquisition, with the consideration allocated to customer-related intangible assets, which is being amortized over a period of ~~September 30~~12 years. During the three months ended March 31, ~~2025~~2026, the ~~estimated~~Company ~~future~~paid ~~annual~~$4.0 million ~~amortization~~of ~~expense~~the ~~related~~cash toconsideration, which is reflected within purchases of intangible assets in the consolidated statements of cash flows. The remaining $1.3 million of cash consideration is included in accrued expenses and other current liabilities on the consolidated balance sheets as ~~follows~~of ~~(in~~March ~~thousands):~~31, 2026.

Year ending	Amount
Remainder of 2025	$	6,687
2026	26,749
2027	25,002
2028	24,169
2029	24,106
2030	23,666
Thereafter	71,470
Total	$	201,849

During the three months ended March 31, 2026, the Company reclassified distribution rights with a gross carrying value of $14.6 million and net carrying value of $12.1 million from other assets and prepaid expenses and other current assets to intangible assets. In addition, the Company acquired $12.0 million of distribution rights during the three months ended March 31, 2026, which are being amortized over a period of 15 years.

-2016-

Table of Contents

As of March 31, 2026, the estimated future annual amortization expense related to intangible assets is as follows (in thousands):


Year ending	Amount
Remainder of 2026	$	28,040
2027	35,613
2028	34,727
2029	34,663
2030	34,224
2031	31,702
Thereafter	119,840
Total	$	318,809

(11) Fair Value Measurements

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis and the level they fall within the fair value hierarchy (in thousands):

Amounts Recorded at Fair Value

Financial Statement Classification

Fair Value Hierarchy

Fair Value ~~September~~March 3031, ~~2025~~2026

Fair Value December 31, ~~2024~~2025

Non-COLI assets held in Deferred Supplemental Compensation Plan(a)

Other assets

Level 1

~~691~~699

~~629~~704

Interest rate swaps - current

Accrued expenses and other current liabilities

Level 2

~~686~~271

—553

Interest rate swaps - long-term

Other assets

Level 2

1,~~592~~831

41,~~093~~235

(a) Non-Company Owned Life Insurance ("COLI") assets held in the Company's deferred supplemental compensation plan consist of equity funds with fair value based on observable inputs such as quoted prices for identical assets in active markets and changes in fair value are recorded as selling, general and administrative expenses.

The carrying amounts of cash and cash equivalents, receivables, accounts payable and amounts included in prepaid expenses and other current assets and accrued expenses and other current liabilities that meet the definition of a financial instrument approximate fair value due to their relatively short maturity. The carrying value of the note receivable approximates fair value as the stated interest income effectively offsets the time value of money, resulting in minimal discounting impact. The carrying value of the Company's outstanding debt obligations approximates its fair value. The fair value of the note receivable and long-term debt are calculated using Level 2 inputs based on interest rates available for debt with terms and maturities similar to the Company's existing debt arrangements.

In connection with the sale of the Fleet segment in April 2025, the ~~Company~~total ~~may~~consideration ~~receive up~~ to ~~$65 million~~be inreceived ~~earn-out~~by ~~payments should~~ the ~~Fleet~~Company ~~segment~~included ~~achieve~~a ~~certain~~potential ~~milestones during 2025. The~~ earn-out ispayment ~~recorded at fair value using unobservable inputs and thus represents a Level 3 measurement within the fair value hierarchy. The Company's fair value estimates~~ of ~~the~~up ~~earn-out~~to ~~receivable were determined using a modified Black-Scholes model and other methods~~$65.0 million, ~~which~~subject ~~account~~to ~~for~~ the ~~probabilities~~achievement of ~~various~~certain ~~outcomes.~~milestones ~~The~~by ~~earn-out~~the ~~receivable~~divested isbusiness ~~measured~~during ~~at fair value each reporting period~~2025. ~~Changes~~Based inon ~~these~~the ~~assumptions~~preliminary ~~could~~results ~~result~~of inthe adivested ~~material~~business ~~change~~relative to the ~~fair~~required ~~value~~milestones ~~measurement.~~under ~~Subsequent changes in fair value are recorded within earn-out receivable fair value adjustments in~~ the ~~consolidated statements of operations. Pursuant to the~~ sale agreement, ~~half of~~ the ~~earn-out amount, if any, is due to the~~ Company bydoes ~~December~~not ~~31,~~expect ~~2026,~~that ~~with~~ the ~~second~~earn-out ~~half~~performance ~~due~~threshold bywill ~~June~~be ~~30, 2027~~achieved.

The following table presents the changes in the fair value of the earn-out receivable:

	Earn-out Receivable
Balance as of December 31, 2024	$	—
Sale date fair value of earn-out	29,200
Subsequent fair value adjustments (a)	(29,200)
Balance as of September 30, 2025	$	—
(a) The adjustment recognized during the second quarter of 2025 was initially classified within selling, general and administrative expenses within the consolidated statement of operations. During the third quarter of 2025, the adjustments were reclassified and separately disclosed to earn-out receivable fair value adjustments within the consolidated statements of operations.

The sale date fair value of the earn-out receivable was utilized in calculating the Company's impairment loss on Fleet assets classified as held-for-sale, which was recognized during the first quarter of 2025 and is included in income (loss) from discontinued operations, net of tax, in the consolidated statements of operations.

The fair value of the earn-out at the time of sale and at June 30, 2025 was determined using a modified Black-Scholes model based on significant inputs not observable in the market, incorporating asset volatility and a discount rate. The fair value of the earn-out receivable as of September 30, 2025 was determined using unobservable inputs, primarily internal forecasts. Based on updated forecasts, which incorporated actual performance to date of the divested entity subsequent to the sale, and the required milestones under the sale agreement, the Company does not expect that the earn-out performance thresholds will be achieved. Accordingly, the Company recorded a fair value adjustment during the three months ended September 30, 2025, resulting in a full write-down of the earn-out receivable.

-21-

Table of Contents

(12) Income Taxes

Income tax expense during interim periods is based on the estimated annual effective income tax rate plus any discrete items that are recorded in the period in which they occur. The Company's tax rate is affected by discrete items that may occur in any given year but may not be consistent from year to year.

The Company's effective tax rate for continuing operations was 3714.59% and 1815.7% for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 ~~respectively,~~ and ~~21.1% and 12.8% for the three and nine months ended September 30~~2025, ~~2024~~ respectively. The effective tax ~~rates~~rate ~~were~~was ~~higher~~lower for the three ~~and the nine~~ months ended ~~September 30~~March 31, ~~2025~~2026 as compared to the same ~~periods~~period of the prior year primarily due to ~~the recognition of an accrual for~~ a ~~potential tax dispute associated with the dissolution of a foreign subsidiary. Additionally,~~ higher ~~pre-tax~~impact ~~book~~from ~~income in~~ the ~~nine~~excess ~~months~~stock ~~ended~~compensation ~~September~~deduction ~~30,~~on ~~2025 compared to~~ the ~~same~~current ~~period~~year's ~~in 2024 reduced the favorable tax impact arising from various discrete tax adjustments in 2025~~rate.

The Company recorded higher deferred tax assets in 2025 as compared to 2024 primarily attributable to (i) the release of valuation allowance associated with tax attributes in connection with the Kellstrom acquisition, (ii) recognition of a deferred tax asset related to the fair value adjustment of the earn-~~out receivable, and (iii) accelerated recognition of a tax gain related to the Fleet Sale under the installment sale method.~~ 17-

On July 4, 2025, Congress enacted the One Big Beautiful Bill Act (“OBBBA”), which includes several changes to the Internal Revenue Code that may result in changes to the Company’s income tax expense. The Company does not believe that changes in tax law will materially affect the Company’s operating performance, financial position or effective tax rate.

(13) Lease Abandonment, Lease Termination and Other Restructuring Costs

In connection with the FDS sale as described in Note (3) "Discontinued Operations," the Company implemented post-sale changes including the abandonment and termination of its former headquarters office space. The Company ceased use of the office space during the second quarter of 2024 and formally terminated the office lease during the third quarter of 2024. This activity resulted in a one-time lease termination benefit of $0.7 million during the three months ended September 30, 2024 and net lease abandonment and termination charges of $12.2 million during the nine months ended September 30, 2024. Additionally, the Company incurred $0.2 million and $4.0 million in corporate restructuring expenses during the three and nine months ended September 30, 2024, primarily related to the cancellation of contracts and leasing agreements associated with the FDS Sale.

(14) Subsequent Event

On October 27, 2025, the Company, through one of its subsidiaries, signed a definitive agreement to acquire all of the capital stock of GenNx/AeroRepair IntermediateCo Inc. for approximately $350 million in cash (the “Acquisition”). The Acquisition is subject to customary closing conditions and approvals.

-22-

Table of Contents

(13) Common Stock and Tangible Equity Unit Public Offerings

Common Stock Public Offering

In February 2026, the Company entered into an underwriting agreement with certain underwriters relating to the issuance and sale of 4,587,766 shares of the Company's common stock at a public offering price of $188.00 per share (including exercise by the underwriters of their overallotment option to purchase additional shares). The Company received proceeds of $829.0 million, net of issuance costs, and transaction-related legal and accounting fees of $1.1 million, of which approximately $0.5 million were recorded within accounts payable as of March 31, 2026. The Company used the net proceeds from the offering to fund a portion of the cash consideration for the PAG Acquisition. Prior to the consummation of the PAG Acquisition, the Company utilized the net proceeds for general corporate purposes, including to invest in liquid assets.

Tangible Equity Unit Public Offering

In February 2026, the Company entered into an underwriting agreement with certain underwriters relating to the issuance and sale of 9,200,000 tangible equity units of the Company, at a stated amount of $50.00 per unit (the "Units"), including exercise by the underwriters of their overallotment option to purchase additional Units. The Company received proceeds of $444.9 million from the offering, net of issuance costs, and transaction-related legal and accounting fees of $1.2 million, of which approximately $0.5 million were recorded within accounts payable as of March 31, 2026. The net proceeds were used in the same manner as the net proceeds of the February 2026 common stock public offering. Each Unit issued is comprised of (i) a prepaid stock purchase contract issued by the Company and (ii) an amortizing note issued by the Company. The net proceeds were allocated to the prepaid stock purchase contract and amortizing notes on a relative fair value basis.

Prepaid Stock Purchase Contracts

Each prepaid stock purchase contract has a fair value per unit of $42.1775 pursuant to which the Company will deliver to the holder, on February 1, 2029 (subject to postponement in certain limited circumstances), unless earlier settled, a number of shares of the Company’s common stock per purchase contract equal to an applicable settlement rate ranging from 0.2171 to 0.2660 shares. Unless settled earlier and subject to certain anti-dilution adjustments, each purchase contract will settle based upon the arithmetic average of the daily volume weighted average price of the Company's common stock on each of the 20 consecutive trading days beginning on, and including, the 21st scheduled trading day immediately preceding February 1, 2029 ("the applicable market value") as follows:

•if the applicable market value is greater than or equal to the threshold appreciation price (initially $230.3086), holders will receive 0.2171 shares of common stock for each Purchase Contract (the “minimum settlement rate”);

•if the applicable market value is greater than the reference price (initially approximately $188.00) but less than the threshold appreciation price, holders will receive a number of shares of common stock for each Purchase Contract equal to the Unit stated amount of $50.00, divided by the applicable market value; and

•if the applicable market value is less than or equal to the reference price, holders will receive 0.2660 shares of common stock for each Purchase Contract.

No prepaid stock purchase contracts were settled during the three months ended March 31, 2026. The value allocated to the prepaid stock purchase contracts, net of issuance costs, of approximately $375.3 million is recorded in additional paid-in capital on the Company's consolidated balance sheets.

Amortizing Notes

Each amortizing note issued by the Company has an initial principal amount of $7.8225 that pays quarterly installments of $0.7188 per amortizing note (except for the May 1, 2026 installment payment, which was $0.6868 per amortizing note), which cash payment in the aggregate will be equivalent to 5.750% per year with respect to the $50.00 stated amount per Unit. The value allocated to the amortizing notes, net of issuance costs, of approximately $69.6 million is recorded within long-term debt, less current portion on the Company's consolidated balance sheets except for principal repayments due within twelve months, which are recorded within current portion of long-term debt. See Note (5) "Debt" for further information on the amortizing notes.

-18-

Table of Contents

(14) Subsequent Events

Acquisitions

Acquisition of NorthStar Technologies, LLC ("NorthStar")

On April 1, 2026, the Company acquired NorthStar, a provider of MRO services, third-party logistics, and kitting services supporting the engine aftermarket. The acquisition expands the Company’s engine service capabilities within business and general aviation and strengthens its OEM-focused strategy by enhancing integration within an engine OEM’s aftermarket supply chain and supporting growing demand for engine teardown and labor-intensive services.

The acquisition is not material to the Company’s consolidated financial statements and was funded through existing sources of liquidity. The preliminary purchase price allocation has not yet been completed due to the limited time between the acquisition date and the issuance of these unaudited consolidated financial statements.

Acquisition of Precision Aviation Group ("PAG" or "PAG Acquisition")

On May 5, 2026, the Company completed its previously announced acquisition of PAG, a portfolio company of GenNx360 Capital Partners, for total upfront consideration of approximately $2.025 billion, consisting of $1.750 billion in cash and an in-kind payment in the form of 1,415,752 shares of newly issued equity of a VSE subsidiary, exchangeable for shares of the Company's common stock following an initial lock-up period. In addition, the stock purchase agreement provides for up to $125.0 million of contingent earn-out consideration, payable in cash or equity at the Company's sole discretion, based on PAG's 2026 adjusted EBITDA performance.

The cash portion of the purchase price was funded through (i) net proceeds of approximately $1.3 billion from the Company’s public offerings of common stock and tangible equity units completed in February 2026 and (ii) borrowings under the New Term Facility.

The acquisition expands the Company’s scale and enhances its engine and component service capabilities across the aviation aftermarket, while broadening its global customer base, increasing geographic reach, and strengthening its position as a leading provider of integrated MRO, repair, and supply chain solutions with differentiated technical and component-level capabilities.

The preliminary purchase price allocation has not yet been completed due to the limited time between the acquisition date and the issuance of these unaudited consolidated financial statements. During the three months ended March 31, 2026, the Company incurred $4.5 million of PAG acquisition-related expenses, which are included in selling, general and administrative expenses.

Credit Agreement Amendment

On May 5, 2026, in connection with the PAG acquisition, the Company entered into a first amendment to its existing Credit Agreement, which provides for, among other things, a $900.0 million term loan B facility and an upsize of the Company's existing revolving credit facility from $400.0 million to $500.0 million, maturing on May 5, 2033 and May 2, 2030, respectively. See Note (5) "Debt" for further information.

-19-

Table of Contents

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

Business Overview

VSE Corporation, through its subsidiaries (collectively, "VSE" or the "Company"), is a ~~diversified~~leading ~~aviation~~provider of aftermarket ~~products~~distribution and ~~services company providing~~ maintenance, repair and overhaul ("MRO") services, ~~parts~~for ~~distribution,~~air ~~logistics,~~transportation ~~supply~~assets ~~chain~~for ~~management~~commercial and ~~consulting~~government ~~services~~markets. ~~for~~The ~~transportation~~Company ~~assets~~operates toas ~~commercial~~a ~~and~~single ~~government~~reportable ~~markets.~~segment aligned with the Company's operating segment.

Recent Developments

~~Sale~~PAG ~~of Fleet Segment~~Acquisition

InOn ~~April~~May ~~2025~~5, 2026, the Company completed ~~the~~its previously announced ~~sale~~acquisition of ~~its~~Precision ~~Fleet~~Aviation ~~segment~~Group (“PAG”), a portfolio company of GenNx360 Capital Partners. PAG is a leading global provider of aviation aftermarket MRO, distribution, and supply chain services supporting commercial, business and general aviation (“B&GA”), rotorcraft, and defense markets, with a diversified customer base and broad component and engine service capabilities (such acquisition, the “PAG Acquisition”). See Note (35) "~~Discontinued Operations~~Debt" and (14) “Subsequent Events” to the consolidated financial statements for further information.

~~Acquisition~~Credit ofAgreement ~~Turbine Weld Industries, LLC~~Amendment

In ~~May~~connection ~~2025~~with the completed stock purchase agreement to acquire PAG, the Company ~~completed~~entered ~~the~~into ~~acquisition~~an ofamended ~~Turbine~~agreement ~~Weld~~with ~~Industries~~certain financial institutions on May 5, ~~LLC~~2026 ~~("Turbine~~to ~~Weld")~~provide new senior secured financing, which consists of a ~~specialized~~$900.0 million ~~MRO~~term ~~provider~~loan B facility and an upsize of ~~complex~~the ~~technical~~Company's ~~and~~existing ~~proprietary~~revolving ~~engine~~facility ~~components~~from ~~for~~$400.0 million ~~business~~to ~~and~~$500.0 million. ~~general~~As ~~aviation~~part ~~platforms~~of the amended agreement, the Company paid off its existing Term Loan A Facility in full. See Note (25) ~~"Acquisitions"~~“Debt” to the consolidated financial statements for further information.

~~New~~Underwritten ~~Credit~~Public ~~Agreement~~Offerings

In ~~May~~February ~~2025~~2026, the Company ~~entered~~completed ~~into~~concurrent underwritten public offerings of (i) 4,587,766 shares of its common stock at a ~~new~~public ~~credit~~offering ~~agreement~~price of $188.00 per share (the “Common Stock Offering”) and (ii) 9,200,000 5.750% tangible equity units, each with a stated value of $50.00 (the “Units Offering,” and together with the Common Stock Offering, the “Offerings”). The Common Stock Offering closed on February 4, 2026, and the Units Offering closed on February 5, 2026. Net proceeds of approximately $1.3 billion were received by the Company, which ~~fully~~were ~~replaced~~used ~~its~~to ~~previous~~finance ~~credit~~a ~~agreement~~portion of the cash consideration for the PAG Acquisition. See Note (513) ~~"Debt"~~“Common Stock and Tangible Equity Unit Public Offerings” to the consolidated financial statements for further information.

Business Trends

During the ~~third~~first quarter of ~~2025~~2026, the Company's delivered record results driven by strong execution ofon new and existing distribution awards, ~~the~~ expansion of product ~~line~~offerings and ~~repair~~MRO capabilities, increased end-market demand, and contributions from recent acquisitions ~~generated strong results, with quarterly revenue reaching $282~~.9 ~~million~~Revenue for the three months ended ~~September 30~~March 31, ~~2025~~2026 was $324.6 million, representing a 3927% increase year-over-year. Market growth, share gains and contributions from the recent acquisitions of Kellstrom Aerospace and Turbine Weld have resulted in increased repair and distribution revenue of 25% and 49%, respectively, during the three months ended September 30, 2025, compared to the same period for the prior year. The Company's growth has been driven by several strategic initiatives, including executing on newly awarded distribution agreements, the introduction of new products and repair capabilities, including its Original Equipment Manufacturers ("OEM") licensed manufacturing program, and investments to increase capacity and the addition of new capabilities supporting recent acquisitions.

~~The~~Market ~~Company~~growth ~~believes~~and ~~the~~share ~~acquisitions~~gains ofdrove ~~TCI~~increases in ~~April~~repair ~~2024,~~and ~~Kellstrom~~distribution ~~Aerospace~~revenue inof ~~December~~28% ~~2024~~ and ~~Turbine~~26%, ~~Weld~~respectively, incompared ~~May~~to ~~2025~~the ~~are~~prior-year ~~strongly~~period. ~~aligned~~Growth ~~with~~was ~~VSE's~~supported ~~core~~by ~~business~~several ~~and~~strategic ~~increase~~initiatives, ~~its~~including ~~exposure to~~ the ~~high-growth,~~execution ~~higher-margin~~of ~~engine~~newly ~~aftermarket.~~awarded ~~Furthermore~~distribution agreements, ~~the~~expansion ~~Company~~of ~~believes~~repair ~~that~~capabilities ~~the~~through ~~Honeywell~~increased ~~FCS~~capacity, ~~acquisition~~and incontinued ~~September~~advancement ~~2023~~of tothe ~~exclusively~~Company’s ~~manufacture,~~OEM ~~sell,~~licensed ~~market,~~manufacturing ~~distribute,~~program. ~~and~~These ~~repair~~initiatives ~~certain~~have ~~fuel~~further ~~control~~strengthened ~~systems, expands~~ the Company'’s ~~existing~~position ~~capabilities~~in ~~and~~the ~~provides~~aviation ~~access~~aftermarket, towhile ~~new~~deeper ~~customers~~OEM ~~and~~partnerships ~~end~~have ~~markets~~expanded ~~while~~access ~~strengthening~~to ~~the~~new ~~Company's~~markets ~~partnership~~and ~~with~~established ~~Honeywell~~customer bases.

Recent acquisitions, including Turbine Weld in May 2025 and Aero 3 in December 2025, are aligned with the Company’s core strategy and have increased exposure to the high-23growth, higher-margin commercial MRO and distribution aftermarket.

-20-

Table of Contents

Results of Operations

The following table summarizes the Company's consolidated results of operations (in thousands):

	Three months ended September 30,								Nine months ended September 30,
			Three months ended March 31,
	2025		2024		Change ($)		Change (%)		2025		2024		Change ($)		Change (%)
									2026		2025		Change ($)		Change (%)
Revenues	$	~~282,909~~	$	~~203,642~~	$	~~79,267~~	39	%	$	~~811~~324,~~093~~580	$	~~558~~256,~~853~~045	$	~~252~~68,~~240~~535	4527	%
Costs and operating expenses	~~272,822~~		~~183,570~~		~~89,252~~		49	%	~~753~~291,~~989~~832		~~520~~231,~~536~~541		~~233~~60,~~453~~291		4526	%
Operating income	~~10,087~~		~~20,072~~		~~(9,985)~~		~~(50)~~	%	5732,~~104~~748		3824,~~317~~504		188,~~787~~244		4934	%
Interest expense, net	4,339		8,987		(4,648)		(52)	%	18,723		28,003		(9,280)		(33)	%
Interest (income) expense, net									(1,402)		7,939		(9,341)		NM (a)
Income from continuing operations before income taxes	~~5,748~~		~~11,085~~		~~(5,337)~~		~~(48)~~	%	3834,~~381~~150		1016,~~314~~565		2817,~~067~~585		~~272~~106	%
Provision for income taxes	~~2,157~~		~~2,343~~		~~(186)~~		~~(8)~~	%	75,~~184~~095		12,~~318~~597		52,~~866~~498		~~445~~96	%
Net income from continuing operations	$	~~3,591~~	$	~~8,742~~	$	~~(5,151)~~	~~(59)~~	%	$	3129,~~197~~055	$	813,~~996~~968	$	2215,~~201~~087	~~247~~108	%
(a) Percentage change is not meaningful (NM)

Revenues. Revenues increased for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, compared to the same ~~periods~~period in the prior year primarily driven by contributions from the acquisitions of ~~Kellstrom~~Turbine ~~Aerospace~~Weld and ~~Turbine~~Aero ~~Weld~~3, ~~new~~recently initiated distribution contract wins and improved demand for the Company's commercial aerospace ~~and business and general aviation~~ products and services resulting from ~~solid~~strong end market activity in global commercial air travel. ~~The~~Distribution revenue ~~increase during the nine months ended September 30, 2025 was also driven by contributions from the acquisition of TCI. Aviation distribution revenue~~ increased $5741.78 million, or 4926%, and repair revenue increased $2126.67 million, or 2528%, for the three months ended ~~September~~March 3031, ~~2025~~2026, compared to the same period in the prior year. Aviation distribution revenue increased $168.4 million, or 49%, and repair revenue increased $83.9 million, or 39%, for the nine months ended September 30, 2025, compared to the same period in the prior year.

~~Costs and~~ Operating ~~Expenses~~Income. ~~Costs~~Operating ~~and~~income ~~operating expenses~~ increased for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, compared to the same ~~periods~~period inof the prior year, primarily ~~due~~driven toby ~~increases in~~ revenue. ~~Included~~growth ~~in costs~~ and ~~operating~~a ~~expenses~~favorable isshift ~~the~~in ~~amortization~~sales ofmix ~~intangible~~and ~~assets~~pricing. ~~related~~The toincrease ~~acquisitions, which~~ was ~~$6.7~~partially ~~million~~offset ~~for~~by ~~the~~increased ~~three~~costs ~~months~~and ~~ended~~operating ~~September 30,~~expenses ~~2025,~~driven ~~compared~~by tohigher ~~$4.8~~revenue ~~million~~and ~~for~~an ~~the~~increase ~~same period~~ in ~~the~~amortization ~~prior year. Amortization~~ of intangible assets ~~was~~of $192.39 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, compared to ~~$12.5 million for~~ the same period in the prior year. Additionally, for the three and nine months ended September 30, 2025, the Company recognized a $23.3 million and a $29.2 million charge, respectively, on the fair value of the earn-out receivable from the Fleet Sale.

~~Operating~~Interest (Income.) ~~Operating income decreased for the three months ended September 30~~Expense, ~~2025, compared to the same period of the prior year primarily due to the $23~~net.3 ~~million~~Net ~~valuation~~interest ~~adjustment charge on the earn-out receivable from the Fleet Sale and increased intangible asset amortization, partially offset by the previously mentioned increased revenues. Operating~~ income increased for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, compared to the same period ofin the prior year, primarily due to ~~increased~~interest ~~revenues~~income asearned ~~well~~on asexcess ~~one-time~~cash ~~prior~~proceeds ~~year~~from ~~charges,~~the ~~including~~February a2026 ~~lease~~underwritten ~~abandonment~~public ~~charge~~offerings ~~of $12.2 million~~ and ~~corporate~~on ~~restructuring~~a ~~charges~~note ~~of $4~~receivable.0 ~~million.~~ The ~~operating income~~ increase was ~~partially~~further ~~offset~~driven by ~~the~~lower ~~previously~~borrowings ~~mentioned~~under ~~increased~~the ~~amortization~~Company's ofdebt ~~intangible~~facilities ~~assets, earn-out valuation adjustment charges,~~ and ana ~~increase~~reduction in ~~corporate~~the ~~acquisition~~average ~~and~~interest ~~integration~~rate ~~costs~~on ~~incurred~~borrowings ~~during~~outstanding, ~~the~~which ~~current~~together ~~period~~decreased interest expense.

~~Interest~~Provision ~~Expense~~for Income Taxes. ~~Interest~~The ~~expense~~Company's ~~decreased~~effective tax rate for ~~the~~continuing ~~three~~operations was 14.9% and ~~nine~~15.7% for the three months ended ~~September 30~~March 31, 2026 and 2025, asrespectively. ~~compared~~The toCompany's ~~the~~tax ~~same~~rate ~~periods~~is affected by discrete items that may occur in ~~the~~any ~~prior~~given year ~~primarily~~but ~~due~~may not be consistent from year to ayear. ~~decrease~~Permanent indifferences ~~the~~such ~~Company's~~as ~~debt~~foreign ~~facility~~derived ~~borrowings~~intangible income deduction, Section 162(m) limitation, capital gains tax treatment, state income taxes, certain federal and astate ~~lower~~tax ~~average~~credits ~~interest~~and ~~rate~~other onitems ~~borrowings~~caused ~~outstanding.~~differences ~~The~~between the Company's ~~also~~statutory ~~recognized~~U.S. ~~interest~~federal income ontax ~~the~~rate ~~note~~and ~~receivable~~its ofeffective $1tax rate.3 ~~million~~The ~~during~~lower ~~the~~effective ~~three~~tax ~~and~~rate ~~nine~~for the three months ended ~~September~~March 3031, ~~2025~~2026 was primarily driven by a higher impact from the excess stock compensation deduction on the current year's rate.

Provision for Income Taxes. The Company's effective tax rate for continuing operations was 37.5% and 18.7% for the three and nine months ended September 30, 2025 respectively, and 21.1% and 12.8% for the three and nine months ended September 30, 2024 respectively. The Company's tax rate is affected by discrete items that may occur in any given year but may not be consistent from year to year. Permanent differences such as foreign derived intangible income deduction, Section 162(m) limitation, capital gains tax treatment, state income taxes, certain federal and state tax credits and other items caused differences between the Company's statutory U.S. federal income tax rate and its effective tax rate. The higher effective tax rates for the three and nine months ended September 30, 2025 is primarily due to the recognition of an accrual for a potential tax dispute associated with the dissolution of a foreign subsidiary. Additionally, higher pre-tax book income in the nine months ended September 30, 2025 compared to the same period in 2024 reduced the favorable tax rate impact arising from various discrete tax adjustments in 2025.

-24-

Table of Contents

Liquidity and Capital Resources

Liquidity

OnThe ~~May~~Company's 2,internal ~~2025,~~sources ~~the~~of ~~Company~~liquidity ~~entered~~are ~~into~~primarily afrom ~~new~~operating ~~credit agreement~~activities, ~~which~~specifically ~~provides~~from ~~for~~changes ain ~~$300 million~~the ~~term~~level ~~loan~~of ~~facility~~revenues and aassociated ~~$400 million~~inventory, ~~revolving~~accounts ~~credit~~receivable ~~facility~~and accounts payable, ~~both~~and ~~maturing~~from onprofitability. ~~May~~Significant 2increases or decreases in revenues and inventory, ~~2030~~accounts receivable and accounts payable can affect liquidity. ~~The~~Inventory ~~new~~and ~~debt~~accounts ~~agreement~~payable ~~provides~~levels acan ~~lower~~be ~~interest~~affected ~~rate,~~by ~~greater~~the ~~flexibility~~timing of large opportunistic inventory purchases and ~~increased~~by ~~borrowing~~distributor ~~capacity~~agreement requirements. ~~The~~Accounts ~~new~~receivable ~~credit~~and ~~agreement~~accounts ~~replaced~~payable levels can be affected by changes in the ~~Company's~~level ~~previous~~of ~~term~~work ~~loan~~performed and ~~revolving~~by ~~credit~~the ~~facility,~~timing ~~which~~of ~~were~~large ~~scheduled~~purchases. In addition to ~~mature~~operating cash flows, other significant factors that affect the Company's overall management of liquidity include capital expenditures and investments in ~~October~~the ~~2026~~acquisition of businesses.

~~Borrowings~~The ~~under~~Company's ~~the~~primary ~~new~~external ~~credit~~financing ~~agreement~~sources ~~will~~are ~~accrue~~the ~~interest~~capital atmarkets ~~either~~and ~~the~~its ~~term~~credit ~~SOFR~~agreement, ~~rate~~which ~~plus~~includes ~~the~~a ~~SOFR~~$300.0 million ~~margin~~term orloan ~~ABR~~and ~~plus~~a ~~the~~revolving ~~ABR~~facility ~~margin.~~with ~~The~~an ~~Company,~~aggregate atmaximum ~~its~~borrowing ~~option~~capacity ~~may~~of ~~select~~$400.0 million ~~between~~as ~~one~~of March 31, ~~three~~2026, orboth ~~six~~maturing ~~month~~on ~~Term~~May ~~SOFR~~2, ~~Rates~~2030. ~~The~~For ~~applicable~~the ~~SOFR~~three ~~margin~~months orended ~~ABR~~March 31, ~~margin~~2026, ~~will~~outstanding beborrowings ~~determined~~under ~~based on~~ the ~~Company’s~~credit ~~Total Net Leverage Ratio.~~

The Company's primary sources of external financing are the capital markets and its credit agreement. The Company's internal sources of liquidity are primarily from operating activities, specifically from changes in the level of revenues and associated inventory, accounts receivable and accounts payable, and profitability. Significant increases or decreases in revenues and inventory, accounts receivable and accounts payable can affect the Company's liquidity. Inventory and accounts payable levels can be affected by the timing of large opportunistic inventory purchases and by distributor agreement requirements. Accounts receivable and accounts payable levels can be affected by changes in the level of work the Company performs and by the timing of large purchases. In addition to operating cash flows, other significant factors that affect the Company's overall management of liquidity include capital expenditures, divestitures, and investments in the acquisition of businesses.-21-

~~The~~Table ~~Company's outstanding borrowings under the credit agreement decreased approximately $72.8 million for the nine months ended September 30, 2025. As~~ of September 30, 2025, the Company had borrowings outstanding under its term loan of $298.1 million, borrowings outstanding under its revolving facility of $61.6 million, outstanding letters of credit of $0.6 million, and $337.8 million of unused commitments under the credit agreement.Contents

agreement decreased $1.9 million. As of March 31, 2026, the Company had $294.4 million outstanding under the term loan, $0.7 million in outstanding letters of credit, and $399.3 million in unused commitments.

In February 2026, the Company completed the Common Stock Offering and the Units Offering that resulted in net proceeds of approximately $1.3 billion, which were used to finance a portion of the cash consideration for the PAG Acquisition. See Note (13) “Common Stock and Tangible Equity Unit Public Offerings” to the consolidated financial statements for further information. As of March 31, 2026, the Company had $72.0 million in outstanding principal obligations related to the tangible equity units.

The Company believes its existing balances of cash and cash equivalents, along with its cash flows from operations and debt instruments under its credit agreement mentioned above, will provide sufficient liquidity for business operations as well as capital expenditures, dividends, and other capital requirements associated with its business operations over the next twelve months and thereafter for the foreseeable future.

Cash Flows

The following table summarizes the Company's cash flows (in thousands):

	Nine months ended September 30,
			Three months ended March 31,
	2025		2024
					2026		2025
Net cash used in operating activities	$	~~(10,652)~~	$	~~(86,412)~~	$	(62,264)	$	(46,632)
Net cash provided by (used in) investing activities	76,558		(87,527)
Net cash used in investing activities					(27,088)		(129)
Net cash (used in) provided by financing activities	(86,152)		173,916
Net cash provided by financing activities					1,259,401		28,239
Net decrease in cash and cash equivalents	$	(20,246)	$	(23)
Net increase (decrease) in cash and cash equivalents					$	1,170,049	$	(18,522)

Cash used in operating activities ~~decreased~~increased $7515.86 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, as compared to the same period of the prior year., ~~The decrease was~~ primarily due to ana ~~increase~~greater inuse of cash for inventory purchases, partially offset by higher net income from continuing operations, ~~after~~adjusted ~~adjusting~~ for non-cash expenses~~, and improved working capital management~~.

Cash ~~provided~~used byin investing activities increased $~~164~~27.10 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, as compared to the same period of the prior year., ~~The increase was~~ primarily ~~due~~driven toby ~~cash~~$16.0 ~~provided~~million ~~during~~in ~~the~~purchases ~~current~~of ~~period~~intangible ofassets, $~~138~~5.84 million ~~related~~in tocash ~~the~~paid ~~Fleet~~for ~~and FDS sales~~acquisitions, net of cash ~~divested~~acquired, ~~offset~~a ~~by cash provided in the prior period of~~ $423.16 million ~~related to the FDS sale. The~~ increase ~~was~~in ~~also~~purchases ~~driven~~of byproperty ~~higher~~and ~~cash paid for the prior year TCI acquisition~~equipment, ~~net~~and ~~of cash acquired, of~~ $~~112~~2.37 million, asin ~~compared~~prior toyear ~~cash~~proceeds ~~paid~~from ~~for~~ the ~~current~~sale ~~year Turbine Weld acquisition, net~~ of ~~cash~~the ~~acquired,~~Federal ofand ~~$49.9~~Defense ~~million~~segment. ~~See~~Refer to Note (2) "Acquisitions", ~~and~~ Note (3) "Discontinued Operations", and Note (10) "Goodwill and Intangible Assets" to the consolidated financial statements for further information.

Cash ~~used~~provided inby financing activities increased $~~260.~~1.2 ~~million~~billion for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, as compared to the same period of the prior year, primarily due to $1.3 ~~The~~billion ~~increase~~of ~~was~~net ~~primarily~~proceeds ~~due~~received tofrom the Company's February 2026 Common Stock Offering and Units Offering, partially offset by higher net repayments of ~~debt~~the Company's credit facilities of $36.4 million during the current period and higher tax payments for equity transactions of $724.87 million,.

~~-25-~~The Company paid cash dividends totaling $2.3 million or $0.10 per share during the three months ended March 31, 2026. Pursuant to the terms of the credit agreement, payment of cash dividends are subject to annual restrictions. The Company has paid cash dividends annually since 1973.

Table of Contents

as compared to net borrowings of debt during the prior period of $20.0 million. The increase was also driven by the prior period receipt of $161.7 million in proceeds related to the Company's public underwritten offering of its common stock in May 2024.

The Company paid cash dividends totaling $6.2 million or $0.30 per share during the nine months ending September 30, 2025. Pursuant to the Company's credit agreement, the payment of cash dividends is subject to annual restrictions. The Company has paid cash dividends each year since 1973.

Other Obligations and Commitments

There have not been any material changes to the Company's other obligations and commitments that were included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025 ("~~2024~~2025 Form 10-K").

Inflation and Pricing

There have not been any material changes to this disclosure from those discussed in the Company's ~~2024~~2025 Form 10-K.

-22-

Table of Contents

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on its financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Disclosures About Market Risk

Interest Rate Risk

The Company's credit agreement provides available borrowing at variable interest rates. The Company's interest expense is impacted by the overall global economic and interest rate environment. Accordingly, future interest rate changes could potentially put the Company at risk for a material adverse impact on future earnings and cash flows. To mitigate this risk, the Company has employed interest rate hedges to fix rates on a portion of its outstanding borrowings for specified periods. For additional information related to the Company's debt and interest rate swaps, see Note (5) and Note (6), respectively, to the Consolidated Financial Statements.

The Company believes there have been no material changes in market risks from those discussed in the Company's 2024 Form 10-K.

Critical Accounting Policies, Estimates and Judgments

The Company's consolidated financial statements are prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP"), which requires the Company to make estimates and assumptions. Certain critical accounting policies affect the more significant accounts, particularly those that involve judgments, estimates and assumptions used in the preparation of the Company's consolidated financial statements, including revenue recognition, inventory valuation, business combinations, goodwill and intangible assets, and income taxes. If any of these estimates, assumptions or judgments prove to be incorrect, the Company's reported results could be materially affected. Actual results may differ significantly from the Company's estimates under different assumptions or conditions. See "Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations" and Note (1) "Nature of Business and Summary of Significant Accounting Policies" in the Company's ~~2024~~2025 Annual Report on Form 10-K for further discussions of the Company's significant accounting policies and estimates. There have been no significant changes in the Company's critical accounting estimates during the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, from those disclosed in the Company's ~~2024~~2025 Form 10-K.

Recently Issued Accounting Pronouncements

For a description of recently announced accounting standards, including the expected dates of adoption and estimated effects, if any, on the Company's consolidated financial statements, see Note (1) "Nature of Business and Summary of Significant Accounting Policies — Recent Adopted Accounting Pronouncements” to the Company's Consolidated Financial Statements included in its ~~2024~~2025 Form 10-K.

-26-

Table of Contents

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~See~~There ~~"Disclosures~~have ~~About~~been ~~Market~~no ~~Risk"~~material changes in ~~Item~~market 2.risks ~~Management's~~from ~~Discussion~~those ~~and~~discussed ~~Analysis~~in ofthe ~~Financial~~Company's ~~Condition~~2025 ~~and~~Form ~~Results of Operations.~~10-K

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management of the Company has evaluated, with the participation of its Chief Executive Officer and Chief Financial Officer, the effectiveness of the disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~September~~March 3031, ~~2025~~2026, disclosure controls and procedures were effective to ensure that information the Company is required to disclose in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

In connection with the ~~Company's~~acquisition ~~acquisitions~~ of ~~Kellstrom~~Turbine ~~Aerospace~~Weld and ~~Turbine~~Aero ~~Weld~~3, certain areas of the Company's internal control over financial reporting changed. These areas are primarily related to integrating corporate functions such as entity level controls and certain financial reporting controls. Certain control structure items remain in operation at ~~Kellstrom~~Turbine ~~Aerospace~~Weld and ~~Turbine~~Aero ~~Weld~~3, primarily related to information technology, inventory management, human resources, processing and billing of revenues, and collection of those revenues. The control structures at ~~Kellstrom~~Turbine ~~Aerospace~~Weld and ~~Turbine~~Aero ~~Weld~~3 have been modified to appropriately oversee and incorporate these activities into the overall control structure. The Company will continue to evaluate the need for additional internal controls over financial reporting.

-23-

Table of Contents

There have been no additional changes in the Company's internal control over financial reporting during the quarterly period covered by this report that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

-24-

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

~~Other~~There ~~than as disclosed in this section, there~~ have been no material changes to the previously disclosed risk factors in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2024~~2025 ("~~2024~~2025 Form 10-K”) ~~and in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2025 and June 30, 2025 (the "2025 10-Qs")~~. The risk factors disclosed in the Company's ~~2024~~2025 Form 10-K ~~and 2025 10-Qs~~ should be considered together with information included in this Quarterly Report on Form 10-Q for the quarter ended ~~September~~March 3031, ~~2025~~2026, and under "Forward-Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

~~Global~~Item ~~economic~~2. Unregistered ~~conditions~~Sales ~~and~~of ~~political~~Equity ~~factors~~Securities ~~could~~and Use ~~adversely~~of ~~affect the Company's revenues.~~Proceeds

~~Revenues~~The ~~for~~Company ~~work~~did ~~performed~~not ~~in,~~purchase orany ~~products~~of ~~delivered~~its ~~to,~~equity ~~foreign~~securities ~~countries~~during ~~are~~the ~~subject~~period tocovered ~~economic conditions in those countries and to political risks posed~~ by ~~ongoing~~this ~~conditions~~report orother ~~foreign~~than ~~conflicts~~40,835 ~~including~~shares ~~the~~of ~~continuing~~common ~~Russia-Ukraine~~stock ~~and~~that ~~Middle~~were ~~East~~voluntarily ~~conflicts,~~forfeited ~~potential~~to ~~terrorist~~VSE ~~activity,~~by ~~and~~participants ~~evolving global trade tensions, including those involving China. Changes~~ in ~~government~~its ~~policies~~2006 orRestricted ~~regimes~~Stock inPlan ~~these regions may affect~~ (the ~~Company's~~"2006 ~~ability~~Plan") to ~~continue~~cover ~~ongoing~~their ~~work~~personal ortax ~~initiate~~liability ~~new~~for ~~projects.~~vesting ~~Political~~stock ~~and~~awards ~~economic~~under ~~conditions in both~~ the ~~United~~2006 ~~States and abroad, as well as global prices and availability of oil and other commodities, could also influence demand for certain of our products and services~~Plan. VSE Corporation has been added to China’s Ministry of Commerce “Unreliable Entity List.” Under applicable provisions, entities on this list may be subject to restrictions on import and export activities, investment in China, or cooperation with Chinese organizations and individuals. The Company

-27-

Table of Contents

currently believes that any potential restrictions would apply only to the parent company, VSE Corporation, and not to its operating subsidiaries, which are the entities conducting business involving China. At this time, the Company has not experienced any material impact on its operations as a result of this designation. However, the Company continues to monitor the situation, as future developments could affect the Company's ability to source products, serve customers, or maintain consistent operations.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

The Company did not purchase any of its equity securities during the three months ended September 30, 2025 other than 5,225 shares of common stock that were voluntarily forfeited to VSE by participants in its 2006 Restricted Stock Plan (the "2006 Plan") to cover their personal tax liability for vesting stock awards under the 2006 Plan.

Item 5. Other Information

During the three months ended ~~September~~March 3031, ~~2025~~2026, no director or "officer," as defined in Rule 16a-1(f) of the Exchange Act, of the Company adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.

-2825-

Item 6. Exhibits

(a) Exhibits
Exhibit 10.1						Consulting Agreement, dated October 24, 2025, between Tarang Sharma and VSE Corporation.
Exhibit 2.1						Stock Purchase Agreement, dated January 29, 2026, by and among VSE Corporation, VSE Mach HoldCo Acquisition Corp., VSE Mach Acquisition Corp., GenNx/PAG IntermediateCo Inc., and GenNx360 PAG Buyer, LLC (incorporated by reference to Exhibit 2.1 to Form 8-K dated January 29, 2026) *†
Exhibit 4.1						Purchase Contract Agreement, dated February 5, 2026, between the Company and U.S. Bank Trust Company, National Association, as Purchase Contract Agent, as Trustee and as attorney-in-fact for the holders of the Purchase Contract (incorporated by reference to Exhibit 4.1 to Form 8-K dated February 5, 2026)
Exhibit 4.2						Indenture, dated February 5, 2026, between the Company and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Form 8-K dated February 5, 2026)
Exhibit 4.3						First Supplemental Indenture, dated February 5, 2026, between the Company and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.3 to Form 8-K dated February 5, 2026)
Exhibit 31.1						Section 302 CEO Certification
Exhibit 31.2						Section 302 CFO Certification
Exhibit 32.1						Section 906 CEO Certification
Exhibit 32.2						Section 906 CFO Certification
Exhibit 101.INS						Inline XBRL Instance Document
Exhibit 101.SCH						Inline XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE						Inline XBRL Taxonomy Extension Presentation Document
Exhibit 104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-~~29-~~K. The Company will furnish supplementally a copy of any omitted schedules or exhibits to the Securities and Exchange Commission upon request.

† Certain information has been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish supplementally a copy of any omitted information to the Securities and Exchange Commission upon request.

-26-

Table of Contents

VSE CORPORATION AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			VSE CORPORATION
Date:	~~October~~May 278, ~~2025~~2026	By:	/s/ John A. Cuomo
			John A. Cuomo
			Director, Chief Executive Officer and President
			(Principal Executive Officer)

Date:	~~October~~May 278, ~~2025~~2026	By:	/s/ Adam R. Cohn
			Adam R. Cohn
			Chief Financial Officer
			(Principal Financial Officer)
			(Principal Financial Officer and Principal Accounting Officer)

Date:	October 27, 2025	By:	/s/ Tarang Sharma
			Tarang Sharma
			Chief Accounting Officer
			(Principal Accounting Officer)

-27-

-30-

Filing Compare · VSE CORP