Ken Herbert's questions to VSE Corp (VSEC) leadership • Q2 2025
Question
Ken Herbert of RBC Capital Markets inquired about the drivers of organic growth for the second half of the year, the performance split between commercial and business jet markets, the potential margin impact from the "one VSE" integration, and specific opportunities within the engine MRO and distribution space.
Answer
President & CEO John Cuomo detailed that while the Used Serviceable Material (USM) business is being strategically reduced, strong performance in the engine markets, particularly commercial, is driving growth. He noted that a significant portion of Kaelstrom synergies has already been realized, contributing to strong margins, but advised against getting too far ahead on future margin expansion. Cuomo also clarified that VSE has ample opportunity to grow its commercial engine distribution and that its MRO relationships with one OEM do not preclude working with others.