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Item 9A. Controls and Procedures

2024-03-08 compared with 2023-03-10 · 37 added, 24 removed, 133 unchanged (31% of the section changed)

4 unchanged sentences

Management's Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

Management is responsible for establishing and maintaining adequate internal control over financial reporting and for assessing the effectiveness of internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

Based on its assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2022.

Based on the assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2023.

As permitted by the SEC rules, management's assessment and conclusion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2023, excludes an assessment of internal control over financial reporting of Desser Aerospace, acquired on July 3, 2023.

Desser Aerospace represents total assets, excluding goodwill and intangibles related to the acquisitions, and revenues constituting 4% and 6%, respectively, of our consolidated total assets and total revenues as of and for the year ended December 31, 2023.

Grant Thornton LLP, an independent registered public accounting firm, audited our consolidated financial statements included in this report and our internal control over financial reporting, and the firm's report on our internal control over financial reporting are set forth below.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Change in Internal Controls

During the fourth quarter of fiscal year 2022, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), that have materially affected these controls or are reasonably likely to materially affect these controls subsequent to the evaluation of these controls.

During the fourth quarter of fiscal year 2023, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), that have materially affected these controls or are reasonably likely to materially affect these controls after the evaluation of these controls.

Report of Independent Registered Public Accounting Firm

14 unchanged sentences

We believe that our audit provides a reasonable basis for our opinion.

Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of Desser-Graham Partnership, L.P.

(“Desser Aerospace”), a wholly-owned subsidiary, whose financial statements reflect total assets, excluding goodwill and intangibles related to the acquisition, and revenues constituting 4 and 6 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

As indicated in Management’s Report, Desser Aerospace was acquired during 2023.

Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of Desser Aerospace.

Definition and limitations of internal control over financial reporting

9 unchanged sentences

Other Information

During the three months ended December 31, 2023, 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.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

21 unchanged sentences

Schedule II - Valuation and Qualifying Accounts

Balance at Beginning of Year Additions Charged to Statement of Income Accounts Deductions Balance at End of Year

(in thousands)

Allowance for credit losses on accounts receivable

Year Ended December 31,

Year ended December 31, 2021 1,493 572 388 1,677

Year ended December 31, 2020 396 1,767 (1) 670 1,493

Valuation allowance for deferred tax assets

Year ended December 31, 2022 8,257 78 — 8,335

Year ended December 31, 2021 7,926 331 — 8,257

2023 2022 2021

Allowance for credit losses (in thousands):

Allowance as of beginning of year $ 2,019 $ 1,677 $ 1,493

Additions charged to costs and operating expenses

1,484 2,084 572

Additions charged to other accounts (a)

Allowance as of end of year $ 3,449 $ 2,019 $ 1,677

Year Ended December 31,

(1) Increase in 2020 primarily due to allowances booked as a result of the financial impact from the COVID-19 pandemic.

(2) Increase in 2020 primarily due to full valuation allowance established against capital loss DTA in connection with the Prime Turbines stock sale and full valuation allowance against foreign tax loss DTA.

2023 2022 2021

Valuation allowance for deferred tax assets (in thousands):

Allowance as of beginning of year $ 8,337 $ 8,257 $ 7,926

Additions charged to costs and operating expenses

Additions charged to other accounts (a)

Allowance as of end of year $ 9,906 $ 8,337 $ 8,257

EXHIBIT INDEX

5 unchanged sentences

3.2 Certificate of Amendment of the Restated Certificate of Incorporation of VSE Corporation dated as of May 2, 2006 (Exhibit 3.1 to Form 10-Q dated August 1, 2006)

3.3 Certificate of Amendment of the Restated Certificate of Incorporation of VSE Corporation dated as of May 4, 2022

3.3 Certificate of Amendment of the Restated Certificate of Incorporation of VSE Corporation dated as of May 4, 2022 (Exhibit 3.1 to Form 10-K dated March 10, 2 023)

3.4 B y-Laws of VSE Corporation as am ended through October 22, 2022 (Exhibit 3.4 to Form 10 - Q dated July 27, 2023)

3.5 Amendment No.

3 to the By-Laws of VSE Corporation as amended through October 1, 2022

3 to the By-Laws of VSE Corporation as amended through October 1, 2022 (Exhibit 3 .2 to F orm 10-K dated March 10, 2023)

4.1 Specimen Stock Certificate as of May 19, 1983 (Exhibit 4 to Registration Statement No.

1 unchanged sentence

4.2 Description of VSE Corporation Securities Registered Pursuant to Section 12 of the Securities Act of 1934 (filed herewith)

10.1 Executive Employment Agreement dated as of September 24, 2019, by and between VSE Corporation and Robert Moore (Exhibit 10.1 to Form 8-K dated September 27, 2019)

10.2 Executive Employment Agreement dated as of July 28, 2021, by and between VSE Corporation and Farinaz S.

7 unchanged sentences

10.6 Executive Employment Agreement dated as of December 7, 2021, by and between VSE Corporation and Chad Wheeler (Exhibit 10.4 to Form 8-K dated December 9, 2021)

10.7 Separation and Release Agreement (dated as of December 31, 2022, by and between VSE Corporation and Robert A.

Exhibit 10.2 +

10.8 Separation and Release Agreement dated as of April 26, 2021, by and between VSE Corporation and Thomas M.

Kiernan (Exhibit 10.1 to Form 10-Q dated April 29, 2021)

10.9 Fourth Amended and Restated Business Loan and Security Agreement dated January 5, 2018 among VSE Corporation and its wholly owned subsidiaries, Citizens Bank N.A.

7 unchanged sentences

10.13 Fourth Amendment to the Fourth Amended and Restated Business Loan and Security Agreement, dated as of October 7, 2022, by and among the Company, as a borrower, various subsidiaries of the Company party thereto as borrowers or guarantors, the lenders from time to time party thereto and Citizens Bank, N.A., as administrative agent (Exhibit 10.1 to Form 10-Q dated October 27, 2022)

10.14 F ifth Amendment to the Fourth Amended and Restated Business Loan and Security Agreement, dated as of July 2, 2 023, by and among the Company, as a borrower, various subs idiaries of the Compa ny party thereto as borrower s or guarantors, the lenders from time to time party th er eto and Citizens Bank, N.A., as administrative agent ( Exhibit 10.1 to Form 10Q dated July 27, 2023)

10.15 Sixth Amendment to the Fourth Amended and Restated Business Loan and Security Agreement, dated as of December 28, 2023 , by and among the Company, as a borrower, various subsidiaries of the Company party thereto as borrowers or guarantors, the lenders from time to time party thereto and Citizens Bank, N.A., as administrative agent

10.16 Lease Agreement by and between Metropark 7 LLC and VSE Corporation (Exhibit 10.2 to Form 8-K dated November 4, 2009)

10.15 VSE Corporation Deferred Supplemental Compensation Plan effective January 1, 1994 as amended by the Board through March 9, 2004 (Exhibit 10.2 to Form 10-Q dated April 28, 2004)

10.16 VSE Corporation 2006 Restricted Stock Plan, as amended in February 2020

10.17 VSE Corporation Deferred Supplemental Compensation Plan effective January 1, 1994 , as amended and restated effective November 1, 2023

10.18 VSE Corporation 2006 Restricted Stock Plan, as amended in March 2023 (Appendix A to Definitive Proxy Statement on Schedule 14A filed on March 20, 2023)

10.19 VSE Corporation 2021 Employee Stock Purchase Plan (Appendix A to the Registrant’s Proxy Statement on Schedule 14A (Commission File No.

6 unchanged sentences

32.2 Section 906 CFO and PAO Certification

99.1 Audit Committee Charter (as adopted by the Board Of Directors of VSE Corporation on March 9, 2004)(Appendix A to Registrant's definitive proxy statement for the Annual Meeting of Stockholders held on May 3, 2004)

97.1 VSE Corporation Clawback Policy

101.INS XBRL Instance Document

25 unchanged sentences

Koonce Director March 7, 2024

Lafond Director March 9, 2023

/s/ Bonnie K.

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures