VSE

INTEGRITY • AGILITY • VALUE

2010 VSE Annual Report and Form 10-K

This document is printed using soy-based inks using FSC and Green 
Seal™ certified paper that contains recycled post-consumer fiber. 

2010 VSE Annual Report and Form 10-K—INTEGRITY • AGILITY • VALUE

2010 Highlights

Corporate Profile
We conduct our business operations in more than 100 
locations world-wide under four reportable operating 
segments: Federal; International; IT, Energy and 
Management Consulting; and Infrastructure. VSE’s 
offerings include:

  Logistic Services–Multi-dimensional functions 

that converge to support one service task/
equipment system such as true field support, 
supply chain management and warehouse 
management. 

  Engineering and Equipment Refurbishment– 

Conceptual design, engineering of 
equipment,vehicle reset, parts supply, and 
advanced technologies.

  IT Services–Complete enterprise architecture, 
data mining, public protection/security, and 
technical/ software engineering for systems, 
assessments and reviews. 

  Construction Management–Planning, 

preparation, permitting, feasibility studies, 
procurement, and construction management for 
major complexes as well as all civil works projects. 

  Technical and Management Consulting–
Professional competencies in technology 
roadmaps and solutions, policy impacts, analysis, 
cyber-security and infrastructure protection and 
mitigation measurements.

Stockholder Inquiries
VSE is a publicly owned company and its shares are 
traded on the NASDAQ Global Select Market under 
the symbol VSEC. Inquiries about stock ownership, 
dividends, and stockholder changes of address may 
be directed to our Transfer Agent: Registrar and 
Transfer Company, 10 Commerce Drive, Cranford, 
New Jersey 07016-1340, or to VSE at 2550 Huntington 
Avenue, Alexandria, Virginia 22303-1499, Attention: 
Corporate Secretary, Telephone (703) 329-4770.

Further information about VSE and its subsidiaries 
is available at www.vsecorp.com; www.icrcsolutions.
com; www.gbsolutionsinc.com, www.energetics.com 
and www.akimeka.com.

VSE had several notable accomplishments in 2010. 
For the third year in a row, Government Executive 
Magazine named VSE the “Number #1 Government 
Contractor (small);” Forbes magazine recognized VSE 
as the “Number #27 Best Small Business in America;” 
and the Association for Capital Growth named us the 
Top Corporate Growth Company (over $500 million) 
in the Washington, DC metro area. Deltek, Inc., 
named VSE the winner of the Business Impact Award, 
based on being one of the “fastest-growing and most 
innovative government contractors in the nation.” 
Finally, VSE was chosen as Letterkenny Army Depot’s 
Supplier of the Year. 

Akimeka LLC, a native Hawaiian health service 
information technology consulting company, 
was acquired by VSE on August, 19th. Akimeka 
recorded revenues during 2009 of approximately $38 
million and operating income of about $6.5 million. 
Akimeka is headquartered in Kihei, Hawaii and has 
been serving the U.S. Government market for more 
than a decade with additional offices in Alexandria, 
VA; Orlando, FL and San Antonio, TX. Akimeka 
complements VSE’s prior acquisition in 2008, G&B 
Solutions, an established full-service IT provider to 
many federal agencies, including the Departments 
of Health and Human Services, Homeland Security, 
Labor, Social Security Administration, the Pension 
Benefits Guarantee Corporation, and the National 
Institutes of Health. 

The Federal Group CED business unit was awarded 
a prime contract to continue work under U.S. Army 
CECOM’ Rapid Response (“R2”) replacement 
program known as “Rapid Response- Third 
Generation (R2-3G).” VSE will compete for task orders 
under the Indefinite Delivery/Indefinite Quantity 
contract over a five-year period. 

Other contract award highlights include: 

  January 2011 award on our LOGWORLD 
omnibus contract to provide equipment 
refurbishment support services to the Army 
Reserve for a base year and four one-year options 
with a potential value of $410 million; 

  10-year, $80 million IDIQ contract with the 
Department of Justice, Bureau of Alcohol, 
Tobacco, Firearms, and Explosives (ATF) to 
provide services similar to the VSE Treasury 
Seized Asset Program; 

  $190 million/ five year IDIQ contract to provide 

Integration Kits (“VIKs”), spare VIK components, 
and engineering and installation support on 
tactical wheeled vehicles and combat vehicles for 
the U.S. Army and the U.S. Marine Corps.

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2010 VSE Annual Report and Form 10-K—INTEGRITY • AGILITY • VALUE

Financial Highlights

Revenues
($M)

Net Income
($M)

Earnings Per
Diluted
Share

($)

Stockholders’
Equity ($M)

1043.6

1014.6

866

653.2

363.7

’06

’07

’09 ’10

’08
Y E A R

Funded
Backlog ($M)

567

476

408

407

24 23.7

4.674.56

19

14.1

3.74

2.82

123.8

101.3

76.1

56.4

7.8

’06

’07

’08
Y E A R

’09 ’10

1.61

’06

’07

’08
Y E A R

’09 ’10

38.2

’06

’07

’08
Y E A R

’09 ’10

Number of
Employees

Dividends
Per Share ($)

Stock Price,
End of Year ($)

2897

2534

0.23

0.195

0.175

1920

0.155

0.135

48.84

45.08

39.23

33.02

1223

857

’10

’06

’07

’09

’08
Y E A R

’10

’06

’07

’09

’08
Y E A R

16.95

’10

’06

’07

’09

’08
Y E A R

’07

’09

’08
Y E A R

’10

299

’06

Income Statement Data (in thousands, except share data)

Year Ended December 31

2010

% CHANGE

2009

Revenues

$

866,036

-14.65%

$

1,014,639

Net income

Earnings per share (diluted)

23,687

4.56

-1.40%

-2.36%

Weighted average shares (diluted)

5,189,263

24,024

4.67

5,146,347

Balance sheet data (in thousands, except percentages)

December 31

2010

% CHANGE

2009

Total assets

$

288,426

Working capital

Stockholders’ equity

Return on equity

54,569

123,776

23.4%

13.56%

18.88%

22.18%

$

253,990

45,902

101,310

31.6%

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2010 VSE Annual Report and Form 10-K—INTEGRITY • AGILITY • VALUE

Message to Stockholders

Overview

Our operating results for 2010 reflect continuing 
efforts toward improved profitability. Operating 
margins increased from 3.8% to 4.4%. 
Accordingly, net operating income for 2010 
remained strong despite the challenges to our 
revenues resulting from a decline in low margin 
“pass-through” work. Revenues generated by our 
direct labor remained strong and continued to 
provide a valuable contribution to our bottom 
line. Our improved profit margins in 2010 
have enabled us to continue to provide our 
shareholders with an above average return on 
equity. 

Our efforts to further grow our bottom line 
results will continue to be focused on increases 
in our direct labor workforce and the pursuit of 
more profitable business markets. The acquisition 
of Akimeka represents a key initiative on both 
of these fronts, as this acquisition brought us 
over 200 highly skilled, professional employees 
performing services in one of our targeted 
strategic markets. Company-wide, we added 363 
employees in 2010, ending the year with 2,897 
employees. 

Strategic Planning 2011-2013

Our Strategic Planning process continues to 
be a successful tool for ensuring our continued 
success. Throughout 2010, we reviewed the 
2010-2012 Strategic Plan on a quarterly basis. We 
updated the plan in mid-2010 and at the end of 
the year we launched our 2011-2013 plan. Key 
focus areas include: 
  Agility and flexibility are key strengths of 
VSE Corporation. We continue to operate 
our business through discreet operating 
groups dedicated to their unique business 
lines and customer bases. They have the 
autonomy to respond quickly to our 
customers’ needs.

  Refinement of our key business metrics. We 
have established specific goals for each of our 
operating groups with the express intent to 
further increase shareholder value.

  We continue to focus on improved 
profitability by securing work that is 
performed by our own direct labor and 
strategic partners.

Operational Challenges

As a federal technical services contractor, we 
depend upon the priorities and pace of funding 
of our primary client, the Federal Government. 
Retaining and expanding our workforce, while 
clients work through contract award delays and 
funding issues continues to be an especially 
challenging effort. We believe there will be a 
strong demand for expertise in our core areas, 
and that the composition of our workforce and 
services we offer are well aligned with near and 
long term government spending priorities.

Declining budgets faced by our federal customers 
are challenging our efforts to sustain our 
business levels. Reductions in our customers’ 
budgets mean more competition for less work. 
Additionally, budget pressures have led to 
delayed awards and program launches and to 
an increasing number of protests. Our efforts 
to mitigate the delays in new contract awards 
include a revitalized focus on directing work 
toward our existing large omnibus contracts. 
We will continue to aggressively bid and 
win contracts while monitoring trends and 
opportunities as we move forward through 2011.

Note of Appreciation

We would like to take a moment to acknowledge 
Don Ervine for his exceptional leadership and 
dedication to the success of VSE Corporation. 
Throughout his tenure, Don has served VSE 
Corporation with great distinction, and we are 
grateful for his contributions to VSE as Chairman 
of the Board, CEO, COO and President.  Don has 
been an integral part of VSE’s growth and success 
over the past 25 years, guiding the company from 
a small business to $1 billion in revenue in 2008. 
His commitment to our customers, shareholders 
and our employees has been stellar. We thank 
Don for his dedication and extraordinary service, 
and wish him all the best in the years to come as 
he has decided to retire from the Board in May of 
this year.

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2010 VSE Annual Report and Form 10-K—INTEGRITY • AGILITY • VALUE

Looking Ahead

While 2010 has been a challenging year for VSE, 
we have implemented strategies to strengthen 
our business operations that enhance our ability 
to secure and execute federal contracts. We have 
the talent, dedication, experience and leadership 
in place who remain focused on serving our 

clients with the same dedication and commitment 
VSE has always maintained throughout its 52 
years of business. Our core values: Integrity – 
Agility – Value will continue to guide us through 
all aspects in our conduct of business.

Maurice A Gauthier 
CEO/President/COO

March 2011

Clifford M. Kendall 
Chairman of the Board

March 2011

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2010 VSE Annual Report and Form 10-K—INTEGRITY • AGILITY • VALUE

Board of Directors

Bonnie K. Wachtel 
Vice President and General Counsel, 
Wachtel & Co., Inc.

Ralph E. Eberhart 
General, USAF (Ret.) 
President, Armed Forces Benefit Association 
Chairman and Director of 
5Star Bank/Life/Funds/Investments

Clifford M. Kendall 
Chairman of the Board 
2011 Tech Council of Maryland Lifetime 
Achievement Award 
2010 Government Contractor Hall of  
Fame Inductee

Calvin S. Koonce, Ph.D. 
Chairman, Koonce Securities, Inc. 
Securities Broker/Dealer

James F. Lafond, CPA 
Retired Executive; formerly 
Washington Area Managing Partner, 
PricewaterhouseCoopers LLP

Jimmy D. Ross 
General, USA (Ret.) 
Senior Logistics Consultant, 
Cypress International, Inc.

David M. Osnos, Esq. 
Of Counsel 
Arent Fox LLP 
Attorneys-at-Law

Donald M. Ervine 
Retired President/CEO/COO 
Former VSE Chairman of the Board 
VSE Corporation

Maurice A. Gauthier 
CEO/President/COO 
VSE Corporation

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2010 VSE Annual Report and Form 10-K—INTEGRITY • AGILITY • VALUE

VSE Corporation is the federal services company of choice for solving problems of global significance 
with agility, integrity and value. VSE is dedicated to making our clients successful through the effective 
use of highly experienced people, systems, and technology in logistics and equipment refurbishment, 
supply chain management, engineering, IT services, construction program management and 
consulting. In helping others succeed, we increase shareholder value by capturing new work, 
exceeding our customers’ expectations, increasing our technical competence, affording more 
employment opportunities and building great industry teammates.

VSE specializes in improving the reliability of systems and equipment and reducing associated 
costs. Our reputation for success and our quality management system are based on self-governance, 
openness and honesty. The foundation of VSE’s success also is based on highly experienced leadership, 
state-of-the-art IT communications, creative thinking, teamwork and motivation. 

VSE’s policy is to provide services of the highest quality to meet or exceed the expectations and 
requirements of our customers on time and at a fair price. VSE’s quality management system is 
registered to the ISO 9001:2008 standard.

VSE is proud of our continued growing support to the U.S. military, navies of allied nations and 
federal and civil agencies. VSE strives to provide our customers with competitive, cost effective 
solutions to specific problems while remaining true to our roots as a value engineering firm. 

VSE has adopted the primary community responsibility of assisting wounded warriors, military 
veterans and their families. 

NASDAQ: VSEC

ISO 9001:2008

Celebrating

52

years
of Excellence

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2010 VSE Annual Report and Form 10-K—INTEGRITY • AGILITY • VALUE

Facilities

VSE Corporation Headquarters
2550 Huntington Avenue 
Alexandria, Virginia 22303 
(703) 960-4600 or  
Toll-free: (800) 455-4873

United States Locations

Huntsville, Alabama

Anchorage, Alaska

Fort Smith, Arkansas

North Little Rock, Arkansas

Texarkana, Arkansas

Barstow, California

Camp Parks, California

China Lake, California

Chula Vista, California

Concord, California

Dublin, California

Fort Hunter Liggett, California

Fort Irwin, California

Fresno, California

Jolon, California

Los Alamitos, California

Los Angeles, California

Point Mugu, California

Riverside, California

Sacramento, California

San Diego, California

San Jose, California

Santa Clara, California

Vallejo, California

Yermo, California

Denver, Colorado

Fort Carson, Colorado

Lakewood, Colorado

Bradley Airport, Connecticut

Jacksonville, Florida

Maitland, Florida

Miami, Florida

Tampa, Florida

Orlando, Florida

Valrico, Florida

College Park, Georgia

East Point, Georgia

Forest Park, Georgia

Fort McPherson, Georgia

Fort Stewart, Georgia

Warner Robbins, Georgia

Anderson AFB, Guam

Tamuning, Guam

Hickam AFB, Hawaii

Honolulu, Hawaii

Artist rendition of new VSE Headquarters in Springfield, Virginia set to open in Spring 2012.

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2010 VSE Annual Report and Form 10-K—INTEGRITY • AGILITY • VALUE

Facilities

Kaneohe Bay, Hawaii

Kihei, Hawaii

Schofield Barracks, Hawaii

Boise, Idaho

Mountain Home AFB, Idaho

Darien, Illinois

Hamel, Illinois

Indianapolis, Indiana

Des Moines, Iowa

Belle Chase NAS, Louisiana

Fort Polk, Louisiana

Adelphi, Maryland

Baltimore, Maryland

Columbia, Maryland

Fort Meade, Maryland

Indian Head, Maryland

Lexington Park, Maryland

Sterling Heights, Michigan

Long Beach, Mississippi

Vicksburg, Mississippi

Weldon Springs, Missouri

Helena, Montana

Bridgeport, New Jersey

Fort Dix, New Jersey

Shrewsbury, New Jersey

South Brunswick, New Jersey

Sparta, New Jersey 

Chaparral, New Mexico

McGregor, New Mexico

Cherry Point, North Carolina

Fort Bragg, North Carolina

Marine Corps Air Station New River, North Carolina

Bismarck, North Dakota

Broken Arrow, Oklahoma

Fort Sill, Oklahoma

Tinker AFB, Oklahoma

Midwest City, Oklahoma

Coraopolis, Pennsylvania

Guaynabo, Puerto Rico

Charleston, South Carolina

Fort Jackson, South Carolina

Marine Corps Air Station, Beaufort, South Carolina 

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Corpus Christi, Texas

Fort Bliss, Texas

Fort Hood, Texas

Fort Sam Houston, Texas

Gatesville, Texas

Harlingen, Texas

San Antonio, Texas

Texarkana, Texas

Ogden, Utah

Salt Lake City, Utah

Alexandria, Virginia

Arlington, Virginia

Ashburn, Virginia

Chesapeake, Virginia

Fort Monroe, Virginia

Hampton, Virginia

Ladysmith, Virginia

Langley AFB, Virginia

Reston, Virginia

Ruther Glen, Virginia

Fort Lewis, Washington

Vancouver, Washington

Morgantown, West Virginia

Washington, D.C.

Fort McCoy, Wisconsin

International Locations
Afghanistan

Armed Forces Africa

Alexandria, Egypt 

Kaiserslautern, Germany

Iraq

Rome, Italy

Atsugi, Japan

Kadena AFB/Torri Station, Okinawa, Japan

Tokyo, Japan

Kuwait

Tuxpan, Vera Cruz, Mexico

Osan Air Base, Republic of Korea

Camp Carroll, South Korea

Romania

Raohsiong, Taiwan

Golchuk, Turkey

2550 Huntington Avenue

Alexandria, Virginia 22303-1499

www.vsecorp.com 

email: info@vsecorp.com

(703) 960-4600 

(800) 455-4873

7067 Columbia Gateway Drive, Suite 200

1861 Wiehle Avenue, Suite 200

2550 Huntington Avenue

1305 N. Holopono Street, Suite 3

Columbia, Maryland 21046 

Reston, Virginia 20190 

Alexandria, Virginia 22303

Kihei, Hawaii 96753

www.energetics.com

www.gbsolutionsinc.com

www.icrcsolutions.com

www.akimeka.com

(410) 290-0370

(703) 883-1140

(703) 519-9910

(808) 442-7100