VSE Reports Second Quarter 2009 Results

35% Increase in Second Quarter Net Income
ALEXANDRIA, Va.--(Business Wire)--
VSE Corporation (Nasdaq: VSEC) reported the following consolidated financial
results for the three and six months ended June 30, 2009 and 2008:

VSE Corporation and Subsidiaries
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share amounts)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
Revenues $ 255,109 $ 251,688 $ 495,564 $ 440,411
Contract costs 244,440 243,639 477,249 426,455
Gross profit 10,669 8,049 18,315 13,956
Selling, general and administrative expenses 180 220 382 383
Interest (income) expense, net (60 ) 34 (119 ) (113 )
Income before income taxes 10,549 7,795 18,052 13,686
Provision for income taxes 4,107 3,026 6,970 5,319
Net income $ 6,442 $ 4,769 $ 11,082 $ 8,367

Basic earnings per share $ 1.26 $ 0.94 $ 2.16 $ 1.65
Basic weighted average shares outstanding 5,130,372 5,065,799 5,121,414 5,062,292

Diluted earnings per share $ 1.25 $ 0.94 $ 2.16 $ 1.64
Diluted weighted average shares outstanding 5,142,799 5,094,615 5,134,759 5,090,643

Dividends declared per share $ 0.050 $ 0.045 $ 0.095 $ 0.085

Financial Results

VSE revenues increased approximately $3.4 million (up 1%) and $55 million (up
13%) for the three and six month periods of 2009 compared to the same periods of
2008. The increase is primarily due to: the Route Clearing Vehicle Modernization
Program in our Communications and Engineering Division (CED); an increase in
International Group revenues; growth in the equipment refurbishment services
provided by our Engineering and Logistics Division (ELD); and an increase in G&B
Solutions (G&B) revenues due partly to G&B`s inclusion in our financial results
for a full six months in 2009.

VSE net income increased approximately $1.7 million (up 35%) and $2.7 million
(up 32%) for the three and six month periods of 2009 compared to the same
periods of 2008. The increase in net income was primarily due to profits on our
ELD equipment refurbishment services; the inclusion of G&B in our financial
results for a full six months in 2009; and profits on the Route Clearing Vehicle
Modernization Program.

VSE`s funded backlog was approximately $536 million at June 30, 2009 compared to
approximately $567 million at December 31, 2008.

CEO Comments

VSE CEO Mo Gauthier commented, "Our second quarter net income reflects an
improvement consistent with our previously stated goal of increasing our profit
margins. Since the beginning of 2009 we have added approximately 500 new
employees as we increase our revenue generated by direct labor as compared to
revenue from subcontractors. We believe that our position in the DoD market and
our growth in Federal Civilian agencies will position us for steady and
incremental progress; however the government funding priorities during this
transition year may impact us in ways that are not anticipated. We look forward
to reporting on our progress."

VSE Services

VSE marked its 50th year as a government contractor in January 2009. Established
in 1959, VSE is a diversified professional services company providing
engineering and consulting services, systems integration, infrastructure
support, and information technology management and solutions, principally to
agencies of the United States Government and other government prime contractors
at locations across the United States and around the world. For additional
information on VSE services and products, please see our web site at
www.vsecorp.com or contact Randy Hollstein, Corporate Vice President of Sales
and Marketing, at (703) 329-3206.

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

Safe Harbor

This news release contains statements which, to the extent they are not
recitations of historical fact, constitute "forward looking statements" under
federal securities laws. All such statements are intended to be subject to the
safe harbor protection provided by applicable securities laws. For discussions
identifying some important factors that could cause actual VSE results to differ
materially from those anticipated in the forward looking statements in this news
release, see VSE`s public filings with the Securities and Exchange Commission.

VSE Corporation
Keren Ackerman, 703-329-4605

Copyright Business Wire 2009

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