Parsons Delivers Strong Third Quarter 2020 Results
CENTREVILLE, Va., Nov. 4, 2020 /PRNewswire/ -- Parsons Corporation (NYSE: PSN) today announced financial results for the third quarter ended September 30, 2020.
CEO Commentary
"We delivered strong third quarter results with record adjusted EBITDA and generated outstanding cash flow. We also recently announced a significant pending strategic acquisition in the rapidly expanding space market that exceeds all our disciplined quantitative and qualitative M&A criteria, while also preserving our financial flexibility for potential future acquisitions," said Chuck Harrington, chairman and chief executive officer of Parsons Corporation.
"Our strong operational performance enabled us to win large new contracts in high-priority national security markets. We continue to execute our strategic plan and look forward to further leveraging our strong balance sheet to drive additional shareholder value."
Third Quarter 2020 Results
Total revenue for the third quarter of 2020 decreased by $19 million, or 2%, from the prior year period to $1 billion. Operating income increased 24% to $66 million primarily as a result of an increase in equity in earnings and lower indirect, general and administrative (IG&A) expenses. Net income decreased to $41 million and net income margin decreased to 4.0% from the prior year period. These decreases were driven by the nonrecurring positive tax benefit impact included in the third quarter of 2019 from elections made in connection with the filing of the company's 2018 S-Corporation tax return and associated with the company's change in tax status. Diluted earnings per share (EPS) attributable to Parsons was $0.40 in the third quarter of 2020, compared to $0.57 in the prior year period.
Adjusted EBITDA including noncontrolling interests for the third quarter of 2020 was $101 million, a 13% increase over the prior year period. Adjusted EBITDA margin increased 130 basis points to 10.0%.
Adjusted EPS increased to $0.57, compared to $0.53 in the third quarter of 2019.
Information about the company's use of non-GAAP financial information is provided on page nine and in the non-GAAP reconciliation tables included herein.
Segment Results
Federal Solutions Segment
Three Months Ended
Growth
Nine Months Ended
Growth
September September Dollars/ Percent September September
30, 30, 30, 30, Dollars/ Percent
2020 2019 2020 2019
Percent Percent
Revenue $
498,156 $
486,175 $
11,981 2 $
1,457,937 $
1,387,484 $
70,453 5
% %
Adjusted EBITDA $
45,936 $
50,445 $
(4,509) -9 $
125,401 $
126,979 $
(1,578) -1
% %
Adjusted EBITDA margin 9.2 10.4 -1.2 -11 8.6
% 9.2
% -0.6 -6
% % % % % %
Third quarter 2020 revenue increased $12 million, or 2%, compared to the prior year period primarily due to an increase in business volume on new and existing contracts.
Third quarter 2020 Federal Solutions Adjusted EBITDA including noncontrolling interests decreased by $5 million, or 9%, compared to the prior year period. Adjusted EBITDA margin decreased to 9.2% from the third quarter of 2019. These decreases were primarily driven by a large technical performance incentive fee recognized in the third quarter of 2019 and an increase in volume on contracts with pass-through costs during the third quarter 2020.
Critical Infrastructure Segment
Three Months Ended
Growth Fiscal Year Ended
Growth
September September Dollars/ Percent September September
30, 30, 30, 30, Dollars/ Percent
2020 2019 2020 2019
Percent Percent
Revenue $
506,080 $
537,102 $
(31,022) -6 $
1,496,751 $
1,529,940 $
(33,189) -2
% %
Adjusted EBITDA $
54,865 $
38,545 $
16,320 42 $
127,057 $
110,240 $
16,817 15
% %
Adjusted EBITDA margin 10.8 7.2 3.7 51 8.5 7.2 1.3 18
% % % % % %
% %
Third quarter 2020 revenue decreased $31 million, or 6%, compared to the prior year period. The decrease was primarily driven by lower volume on contracts with pass-through revenue.
Third quarter 2020 Critical Infrastructure Adjusted EBITDA including noncontrolling interests increased by $16 million, or 42%, compared to the prior year period. Adjusted EBITDA margin increased to 10.8%. These increases were primarily driven by higher equity in earnings from unconsolidated joint ventures and lower IG&A costs.
Third Quarter 2020 Key Performance Indicators
-- Book-to-bill ratio (third quarter): 1.2x on net bookings of $1.2
billion. Book-to-bill ratio (trailing twelve-months): 1.0x on net
bookings of $4.0 billion.
-- Total backlog: $7.8 billion, a 6% decrease from the third quarter of
2019 and a 1% increase from the second quarter of 2020.
-- Cash flow from operating activities: $145 million. This strong
performance was driven by healthy cash collections.
-- Net cash: Cash and cash equivalents were $614 million and total debt was
$587 million for a total net cash position of $27 million as of
September 30, 2020. Following the $300 million all-cash acquisition of
Braxton, as of September 30, 2020, pro forma net debt was approximately
$273 million, positioning the company for continued investment in the
implementation of its growth strategy. The company's pro forma net debt
to trailing twelve-month adjusted EBITDA leverage ratio at the end of
the third quarter of 2020 was 0.8x. The company defines net debt as
total debt less cash and cash equivalents.
Third Quarter 2020 Significant Contract Wins
Parsons continues to win large single-award contracts in markets of national security importance.
-- Awarded a $307 million contract with a classified customer.
-- Awarded a $115 million option year contract on the Combatant Commands
Cyber Mission Support (CCMS) contract by the U.S. General Services
Administration.
-- Awarded a $51 million contract by the U.S. Air Force for the
manufacturing, integration and sustainment of 13 Recovery of Airbase
Denied by Ordnance (RADBO) systems. RADBO employs the Parsons developed
ZEUS(TM) directed energy system to destroy unexploded ordinance with
extreme accuracy in previously denied areas and improves the safety of
deployed warfighters. This program is the first Department of Defense
(DoD) ground-based laser system placed into production.
Recent Additional Corporate Highlights
Parsons continues to build on its strong track record of acquiring and integrating leading-edge technology companies in high-growth markets that broaden its portfolio and customer footprint. In addition, the company was recognized for its commitment to various important military friendly programs.
-- Announced on October 29, 2020, its intent to acquire Braxton Science &
Technology Group, LLC (Braxton). The addition of Braxton complements
Parsons' space portfolio, increases its product offerings in high-growth
markets, and adds critical intellectual property that complements and
expands the company's capabilities for the U.S. Air Force, Space Force,
and research laboratories. The transaction is also consistent with
Parsons' strategy of acquiring high-growth, defense, and intelligence
technology companies with software and hardware intellectual property
that enhance its technology and transactional revenue growth and margin
profile.
-- Recognized numerous times as one of the best companies for its
commitment to military personnel, veterans and their families.
-- Presented with the 2021 Military Friendly® Employer Silver
designation by VIQTORY Media for its comprehensive veteran and
military spouse employment, transition, retention and career
development programs that ultimately improve the lives of veterans.
-- Named a "Best for Vets Employer - 2020" by Military Times, as one of
the country's best employers and organizations with
military-connected employment programs, benefits and support
efforts.
-- Recognized by the Department of Defense for its commitment to
supporting employees who serve in the National Guard and Reserve in
the United States.
Fiscal Year 2020 Guidance
The company is narrowing its adjusted EBITDA guidance range for fiscal year 2020 and reiterating the revenue and cash flow from operating activities guidance ranges it initially issued on March 10, 2020, based on its financial results for the first nine months of 2020 and its current outlook for the remainder of year. The table below summarizes the company's fiscal year 2020 guidance.
(in millions
Current FY20 Guidance
Prior FY20 Guidance
---
Revenue
$3.95 - $4.05 billion
$3.95 - $4.05 billion
Adjusted EBITDA including non-controlling interest
$340 - $360 million
$330 - $360 million
Cash Flow from Operating Activities
$230 - $250 million
$230 - $250 million
---
Net income guidance is not presented as the company believes market volatility in its share price and the resulting impact on the company's equity-based compensation expense, as well as charges to interest, taxes, depreciation, amortization and other matters affecting net income will preclude the company from providing accurate net income guidance for fiscal year 2020.
Conference Call Information
Parsons will host a conference call today, November 4, 2020, at 8:00 a.m. ET to discuss the financial results for its third quarter 2020.
Listeners may access a webcast of the live conference call from the Investor Relations section of the company's website at www.Parsons.com. Listeners may also access a slide presentation on the website, which summarizes the company's third quarter 2020 results. Listeners should go to the website 15 minutes before the live event to download and install any necessary audio software.
Listeners may also participate in the conference call by dialing +1 866-987-6581 (domestic) or +1 602-563-8686 (international) and entering passcode 6876155.
A replay will be available on the company's website approximately two hours after the conference call and continuing for one year. A telephonic replay also will be available through November 11, 2020 at +1 855-859-2056 (domestic) or +1 404-537-3406 (international) and entering passcode 6876155.
About Parsons Corporation
Parsons is a leading disruptive technology provider in the global defense, intelligence, and critical infrastructure markets, with capabilities across cybersecurity, missile defense, space, connected infrastructure, and smart cities. Please visit parsons.com, and follow us on LinkedIn and Facebook to learn how we're making an impact.
Forward-Looking Statements
This Earnings Release and materials included therewith contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in the forward-looking statements, including, among others: the impact of COVID-19; any issue that compromises our relationships with the U.S. federal government or its agencies or other state, local or foreign governments or agencies; any issues that damage our professional reputation; changes in governmental priorities that shift expenditures away from agencies or programs that we support; our dependence on long-term government contracts, which are subject to the government's budgetary approval process; the size of our addressable markets and the amount of government spending on private contractors; failure by us or our employees to obtain and maintain necessary security clearances or certifications; failure to comply with numerous laws and regulations; changes in government procurement, contract or other practices or the adoption by governments of new laws, rules, regulations and programs in a manner adverse to us; the termination or nonrenewal of our government contracts, particularly our contracts with the U.S. federal government; our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors' protests of major contract awards received by us; our ability to generate revenue under certain of our contracts; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; changes in estimates used in recognizing revenue; internal system or service failures and security breaches; and inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements or other unfavorable outcomes. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption "Risk Factors" in our Annual Report with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2019 on Form 10K, filed on March 10, 2020, and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statement made in this presentation that becomes untrue because of subsequent events, new information or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.
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Bryce McDevitt
Dave Spille
Parsons Corporation
Parsons Corporation
(703) 797-3001
(571) 655-8264
Bryce.McDevitt@Parsons.com
Dave.Spille@Parsons.com
PARSONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
September September September September
30, 30, 30, 30,
2020 2019 2020 2019
Revenue $
1,004,236 $
1,023,277 $
2,954,688 $
2,917,424
Direct cost of contracts 788,769 798,552 2,307,725 2,297,512
Equity in earnings of unconsolidated joint ventures 16,741 7,274 26,624 29,305
Indirect, general and administrative expenses 165,937 178,550 537,351 581,428
Operating income 66,271 53,449 136,236 67,789
Interest income 88 427 512 1,129
Interest expense (5,475) (4,909) (13,656) (19,577)
Other income (expense), net 1,653 (3,127) 1,916 (1,580)
Total other income (expense) (3,734) (7,609) (11,228) (20,028)
Income before income tax expense 62,537 45,840 125,008 47,761
Income tax (expense) benefit (16,017) 15,453 (32,992) 67,063
Net income including noncontrolling interests 46,520 61,293 92,016 114,824
Net income attributable to noncontrolling interests (5,862) (4,481) (15,086) (8,012)
Net income attributable to Parsons Corporation $
40,658 $
56,812 $
76,930 $
106,812
Earnings per share:
Basic $
0.40 $
0.57 $
0.76 $
1.19
Diluted $
0.40 $
0.57 $
0.76 $
1.19
Weighted average number shares used to compute basic and diluted EPS (in thousands) (Unaudited)
Three Months Ended Nine Months Ended
September September September September
30, 30, 30, 30,
2020 2019 2020 2019
Basic weighted average number of shares outstanding 100,737 99,435 100,700 89,977
Equity-based awards 378 321
Convertible senior notes 4,458
Diluted weighted average number of shares outstanding 105,573 99,435 101,022 89,977
Net income available to shareholders used to compute diluted EPS as a result of adopting the if-converted method in connection with the Convertible Senior Notes (in thousands) (Unaudited)
Three Months Ended Nine Months Ended
September September September September
30, 30, 30, 30,
2020 2019 2020 2019
Net income attributable to Parsons Corporation 40,658 56,812 76,930 106,812
Convertible senior notes if-converted method interest adjustment 1,164
Diluted net income attributable to Parsons Corporation 41,822 56,812 76,930 106,812
PARSONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)
(Unaudited)
September
30, 2020 December 31, 2019
Assets
Current assets:
Cash and cash equivalents (including
$50,585 and $51,171 Cash of
consolidated joint ventures) $
614,031 $
182,688
Restricted cash and investments 3,726 12,686
Accounts receivable, net (including
$259,691 and $166,355 Accounts
receivable of consolidated joint
ventures, net) 775,060 671,492
Contract assets (including $29,054
and $26,458 Contract assets of
consolidated joint ventures) 610,893 575,089
Prepaid expenses and other current
assets (including $3,974 and $11,182
Prepaid expenses and other current
assets of consolidated joint
ventures) 77,909 84,454
Total current assets 2,081,619 1,526,409
Property and equipment, net
(including $2,649 and $2,945
Property and equipment of
consolidated joint ventures, net) 121,486 122,751
Right of use assets, operating leases 212,592 233,415
Goodwill 1,046,453 1,047,425
Investments in and advances to
unconsolidated joint ventures 71,289 68,620
Intangible assets, net 194,082 259,858
Deferred tax assets 130,904 130,401
Other noncurrent assets 60,336 61,489
Total assets $
3,918,761 $
3,450,368
Liabilities and Shareholders' Equity
(Deficit)
Current liabilities:
Accounts payable (including $72,949
and $85,869 Accounts payable of
consolidated joint ventures) $
208,307 $
216,613
Accrued expenses and other current
liabilities (including $141,476 and
$74,857 Accrued expenses and other
current liabilities of consolidated
joint ventures) 725,867 639,863
Contract liabilities (including
$44,267 and $32,638 Contract
liabilities of consolidated joint
ventures) 212,373 230,681
Short-term lease liabilities,
operating leases 48,661 49,994
Income taxes payable 1,342 7,231
Short-term debt 50,000
Total current liabilities 1,246,550 1,144,382
Long-term employee incentives 21,535 56,928
Long-term debt 537,119 249,353
Long-term lease liabilities,
operating leases 189,319 203,624
Deferred tax liabilities 9,273 9,621
Other long-term liabilities 145,494 125,704
Total liabilities 2,149,290 1,789,612
Contingencies (Note 12)
Shareholders' equity (deficit):
Common stock, $1 par value;
authorized 1,000,000,000 shares;
146,498,582 and 146,440,701 shares
issued; 24,637,043 and 21,772,888
public shares outstanding;
76,090,531 and 78,896,806 ESOP
shares outstanding 146,498 146,441
Treasury stock, 45,771,008 shares at
cost (934,240) (934,240)
Additional paid-in capital 2,675,383 2,649,975
Accumulated deficit (142,095) (218,025)
Accumulated other comprehensive loss (18,049) (14,261)
Total Parsons Corporation
shareholders' equity 1,727,497 1,629,890
Noncontrolling interests 41,974 30,866
Total shareholders' equity 1,769,471 1,660,756
Total liabilities, redeemable common
stock and shareholders' equity $
3,918,761 $
3,450,368
PARSONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Nine Months Ended
September September
30, 30,
2020 2019
Cash flows from operating activities:
Net income including noncontrolling interests $
92,016 $
114,824
Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization 95,442 92,692
Amortization of debt issue costs 760 802
Amortization of convertible notes discount 1,277
Gain on disposal of property and equipment (22) 1,045
Provision for doubtful accounts 54 (964)
Deferred taxes (763) (105,161)
Foreign currency transaction gains and losses 431 1,689
Equity in earnings of unconsolidated joint ventures (26,624) (29,305)
Return on investments in unconsolidated joint ventures 31,189 32,848
Stock-based compensation 11,044 9,224
Contributions of treasury stock 42,006 36,779
Changes in assets and liabilities, net of acquisitions and newly consolidated
joint ventures:
Accounts receivable (106,487) (31,726)
Contract assets (34,931) (59,161)
Prepaid expenses and current assets 7,649 2,980
Accounts payable (8,074) (6,946)
Accrued expenses and other current liabilities 48,901 40,186
Contract liabilities (18,094) 20,703
Income taxes (6,761) (3,019)
Other long-term liabilities (15,574) 13,138
Net cash provided by operating activities 113,439 130,628
Cash flows from investing activities:
Capital expenditures (29,178) (44,030)
Proceeds from sale of property and equipment 1,053 2,824
Payments for acquisitions, net of cash acquired (495,690)
Investments in unconsolidated joint ventures (7,969) (11,446)
Return of investments in unconsolidated joint ventures 17 6,632
Net cash used in investing activities (36,077) (541,710)
Cash flows from financing activities:
Proceeds from borrowings under credit agreement 212,900 530,000
Repayments of borrowings under credit agreement (212,900) (710,000)
Payments for debt costs and credit agreement (286)
Proceeds from issuance of convertible notes 400,000
Payments for purchase of bond hedges (54,968)
Proceeds from issuance of warrants 13,808
Transaction costs paid in connection with convertible notes issuance (10,307)
Contributions by noncontrolling interests 491 8,999
Distributions to noncontrolling interests (4,469) (35,378)
Purchase of treasury stock (819)
Taxes paid on vested stock (1,149)
Proceeds from issuance of common stock 1,684 536,879
Dividend paid (52,093)
Net cash provided by financing activities 345,090 277,302
Effect of exchange rate changes (69) (953)
Net increase (decrease) in cash, cash equivalents, and restricted cash 422,383 (134,733)
Cash, cash equivalents and restricted cash:
Beginning of year 195,374 281,195
End of period $
617,757 $
146,462
Contract Awards
(in thousands)
:
---
Three Months Ended Nine Months Ended
September September September September
30, 30, 30, 30,
2020 2019 2020 2019
Federal Solutions $
737,643 $
845,559 $
1,786,473 $
2,076,928
Critical Infrastructure 432,916 289,665 1,355,272 1,257,506
Total Awards $
1,170,559 $
1,135,224 $
3,141,745 $
3,334,434
Backlog
(in thousands)
:
---
September September
30, 30,
2020 2019
Federal Solutions:
Funded $
1,175,924 $
1,214,919
Unfunded 3,901,231 3,946,784
Total Federal Solutions 5,077,155 5,161,703
Critical Infrastructure:
Funded 2,619,454 3,050,525
Unfunded 80,001 38,286
Total Critical Infrastructure 2,699,455 3,088,811
Total Backlog $
7,776,610 $
8,250,514
Book-To-Bill Ratio:
---
Three Months Ended Nine Months Ended
September September September September
30, 30, 30, 30,
2020 2019 2020 2019
Federal Solutions 1.5 1.7 1.2 1.5
Critical Infrastructure 0.9 0.5 0.9 0.8
Overall 1.2 1.1 1.1 1.1
Non-GAAP Financial Information
The tables under "Parsons Corporation Inc. Reconciliation of Non-GAAP Measures" present Adjusted Operating Income, Adjusted Operating Margin, Earnings before Interest, Taxes, Depreciation, and Amortization ("EBITDA"), Adjusted EBITDA, EBITDA Margin, and Adjusted EBITDA Margin, reconciled to their most directly comparable GAAP measure. These financial measures are calculated and presented on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles ("Non-GAAP Measures"). Parsons has provided these Non-GAAP Measures to adjust for, among other things, the impact of amortization expenses related to our acquisitions of Williams Electric, Polaris Alpha and OGSystems, initial public offering transaction-related expenses, costs associated with a loss or gain on the disposal or sale of property, plant and equipment, restructuring and related expenses, costs associated with mergers and acquisitions, software implementation costs, legal and settlement costs, and other costs considered to non-operational in nature . These items have been Adjusted because they are not considered core to the company's business or otherwise not considered operational or because these charges are non-cash or non-recurring. The company presents these Non-GAAP Measures because management believes that they are meaningful to understanding Parsons's performance during the periods presented and the company's ongoing business. Non-GAAP Measures are not prepared in accordance with GAAP and therefore are not necessarily comparable to similarly titled metrics or the financial results of other companies. These Non-GAAP Measures should be considered a supplement to, not a substitute for, or superior to, the corresponding financial measures calculated in accordance with GAAP.
PARSONS CORPORATION
Non-GAAP Financial Information
Reconciliation of Net Income to Adjusted EBITDA
(in thousands)
Three Months Ended Nine Months Ended
September September September September
30, 30, 30, 30,
2020 2019 2020 2019
Net income attributable to Parsons Corporation $
40,658 $
56,812 $
76,930 $
106,812
Interest expense, net 5,387 4,482 13,144 18,448
Income tax provision (benefit) 16,017 (15,453) 32,992 (67,063)
Depreciation and amortization (a) 30,952 31,027 95,442 92,692
Net income attributable to noncontrolling interests 5,862 4,481 15,086 8,012
Equity based compensation (b) (991) (1,657) 4,142 45,504
Transaction-related costs (c) 2,411 9,891 11,937 26,961
Restructuring (d) 365 309 1,475 2,880
Other (e) 140 (902) 1,310 2,973
Adjusted EBITDA $
100,801 $
88,990 $
252,458 $
237,219
(a) Depreciation and amortization for the
three and nine months ended
September 30, 2020 is $25.7 million
and $80.1 million, respectively in
the Federal Solutions Segment and
$5.3 million and $15.4 million,
respectively in the Critical
Infrastructure Segment.
Depreciation and amortization for
the three and nine months ended
September 30, 2019 is $26.0 million
and $75.1 million, respectively in
the Federal Solutions Segment and
$5.0 million and $17.6 million,
respectively in the Critical
Infrastructure Segment.
(b) Reflects equity-based compensation
costs primarily related to cash-
settled awards.
(c) Reflects costs incurred in connection
with acquisitions, initial public
offering, and other non-recurring
transaction costs, primarily fees
paid for professional services and
employee retention.
(d) Reflects costs associated with and
related to our corporate
restructuring initiatives.
(e) Includes a combination of gain/loss
related to sale of fixed assets,
software implementation costs, and
other individually insignificant
items that are non-recurring in
nature.
PARSONS CORPORATION
Non-GAAP Financial Information
Computation of Adjusted EBITDA Attributable to Noncontrolling Interests
(in thousands)
(in thousands) Three months ended Nine Months Ended
September September September September
30, 30, 30, 30,
2020 2019 2020 2019
Federal Solutions Adjusted EBITDA attributable to $
45,874 $
50,359 $
125,191 $
126,658
Parsons Corporation
Federal Solutions Adjusted EBITDA attributable to 62 86 210 321
noncontrolling interests
Federal Solutions Adjusted EBITDA including $
45,936 $
50,445 $
125,401 $
126,979
noncontrolling interests
Critical Infrastructure Adjusted EBITDA attributable to 48,856 33,976 111,732 102,177
Parsons Corporation
Critical Infrastructure Adjusted EBITDA attributable to 6,009 4,569 15,325 8,063
noncontrolling interests
Critical Infrastructure Adjusted EBITDA including $
54,865 $
38,545 $
127,057 $
110,240
noncontrolling interests
Total Adjusted EBITDA including noncontrolling interests $
100,801 $
88,990 $
252,458 $
237,219
PARSONS CORPORATION
Non-GAAP Financial Information
Reconciliation of Net Income Attributable to Parsons Corporation to Adjusted Net Income Attributable to Parsons Corporation
(in thousands, except per share information)
Three Months Ended Nine Months Ended
September September September September
30, 30, 30, 30,
2020 2019 2020 2019
Net income attributable to Parsons Corporation $
40,658 $
56,812 $
76,930 $
106,812
Deferred tax asset recognition (a) 737 (29,309) 737 (85,672)
Acquisition related intangible asset amortization 20,881 22,143 65,707 64,438
Equity based compensation (b) (991) (1,657) 4,142 45,504
Transaction-related costs (c) 2,411 9,891 11,937 26,961
Restructuring (d) 365 309 1,475 2,880
Other (e) 140 (902) 1,310 2,973
Tax effect on adjustments (6,660) (5,025) (22,251) (23,091)
Adjusted net income attributable to Parsons Corporation 57,541 52,262 139,987 140,805
Adjusted earnings per share:
Weighted-average number of basic shares 100,737 99,435 100,700 89,977
outstanding
Weighted-average number of diluted shares 101,115 99,435 101,022 89,977
outstanding (f)
Adjusted net income attributable to Parsons $
0.57 $
0.53 $
1.39 $
1.56
Corporation per basic share
Adjusted net income attributable to Parsons $
0.57 $
0.53 $
1.39 $
1.56
Corporation per diluted share
(a) Reflects the reversal of a deferred
tax asset as a result of the company
converting from an S-Corporation to
a C-Corporation.
(b) Reflects equity-based compensation
costs primarily related to cash-
settled awards.
(c) Reflects costs incurred in connection
with acquisitions, initial public
offering, and other non-recurring
transaction costs, primarily fees
paid for professional services and
employee retention.
(d) Reflects costs associated with and
related to our corporate
restructuring initiatives
(e) Includes a combination of gain/loss
related to sale of fixed assets,
software implementation costs, and
other individually insignificant
items that are non-recurring in
nature.
(f) Excludes dilutive effect of
convertible senior notes due to bond
hedge.
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SOURCE Parsons Corporation
