VSE Announces License Agreement with Honeywell and Increases 2023 Aviation Segment Guidance

VSE Corporation (NASDAQ: VSEC, "VSE", or the "Company"), a leading provider of aftermarket distribution and maintenance, repair and overhaul ("MRO") services for air and land transportation assets for commercial and government markets, announced today that it has entered into an asset purchase and perpetual license agreement with Honeywell International Inc. (“Honeywell”) to exclusively manufacture and support certain of Honeywell’s fuel control systems on four key engine platforms through its VSE Aviation business.

Under the terms of the agreement, VSE Aviation acquired certain contracts, equipment, and inventory from Honeywell and will utilize the acquired assets and the license to exclusively manufacture, manage aftermarket distribution, and repair more than 340 unique Honeywell fuel control systems. VSE Aviation will support three in-production engine platforms manufactured by Rolls Royce and Pratt & Whitney Canada (P&WC), including P&WC PT-6 engine variants. These systems and subcomponents will support more than 20,000 in-service aircraft powered by these engines, spanning over 120 platforms in the business and general aviation (B&GA) and rotorcraft markets.

This new agreement expands VSE Aviation’s existing capabilities supporting Honeywell’s fuel control systems and associated subcomponents. Since 2015, VSE Aviation has served as the exclusive distributor of these products. In addition, VSE Aviation has a long-established and successful history as an MRO provider to support these fuel control systems. Through this new agreement, VSE expands the relationship to become the licensed manufacturer with perpetual rights to the intellectual property of these components.

MANAGEMENT COMMENTARY

“VSE Aviation has a long history of supporting Honeywell fuel control systems and subcomponents as both a distributor and MRO service provider. We believe this new asset purchase and license agreement significantly strengthens our existing, long-term relationship with Honeywell and is a testament to the value of our differentiated OEM-focused value proposition. We expect this agreement to provide long-term, sustainable revenue and an improved mid-term EBITDA margin outlook for VSE Aviation from these critical and highly technical aircraft components and associated intellectual property,” stated John Cuomo, President and CEO of VSE Corporation.