Parsons Delivers Strong Second Quarter 2020 Operating Earnings and Cash Flow Results
CENTREVILLE, Va., Aug. 5, 2020 /PRNewswire/ -- Parsons Corporation (NYSE: PSN) today announced financial results for the second quarter ended June 30, 2020.
CEO Commentary
"Inclusion, diversity, and equality have been a central aspect of Parsons' core values for decades, and recent watershed events have elevated our commitment to assuring we achieve our vision of equal opportunity for all in these areas. These core values enhance our creativity and entrepreneurial culture, which is a key aspect of our competitive advantage and continued growth and success," said Chuck Harrington, chairman and chief executive office of Parsons Corporation.
"We delivered record second quarter profitability and strong cash flow results, while overcoming ongoing COVID-19 headwinds to achieve revenue results that were in-line with our internal expectations. Our long history of commitment to innovation, agility, and collaboration continues to differentiate Parsons and is enabling the acceleration of our transition to deliver more technology and transactional solutions. We are well positioned in our markets and will leverage our strong balance sheet to enhance our portfolio and drive future growth."
Second Quarter 2020 Results
Total revenue for the second quarter of 2020 decreased by $10 million, or 1%, from the prior year period to $979 million. This decrease was driven by approximately $67 million of contract work that was delayed as a result of the COVID-19 pandemic. Operating income increased to $46 million primarily as a result of an increase in gross profit and lower IPO-related long-term incentive compensation expenses and transaction-related costs. Net income decreased to $23 million and net income margin decreased to 2.4% from the prior year period. These decreases were driven by an income tax benefit associated with the establishment of a $56 million deferred tax asset resulting from Parsons conversion from an S-Corporation to a C-Corporation in the second quarter of 2019. Diluted earnings per share (EPS) attributable to Parsons was $0.23 in the second quarter of 2020, compared to $0.44 in the prior year period.
Adjusted EBITDA including noncontrolling interests for the second quarter of 2020 was $91 million, a 20% increase over the prior year period. Adjusted EBITDA margin increased 160 basis points to 9.3%.
Adjusted EPS increased to $0.49, compared to $0.43 in the second 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 Six Months Ended
Growth
June June Dollars/ Percent June June
30, 30, 30, 30, Dollars/ Percent
2020 2019 2020 2019
Percent Percent
Revenue $
482,210 $
478,497 $
3,713 1 $
959,781 $
901,309 $
58,472 6
% %
Adjusted EBITDA $
47,756 $
35,809 $
11,947 33 $
79,465 $
76,534 $
2,931 4
% %
Adjusted EBITDA margin 9.9 7.5 2.4 32 8.3 8.5 -0.2 -2
% % % % % % % %
Second quarter 2020 revenue increased $4 million, or 1%, compared to the prior year period. The increase was driven by $28 million of increased volume on new and existing contracts, $8 million from acquisitions, offset by approximately $32 million of delayed contract work as a result of COVID-19. Excluding the impact from COVID-19, organic revenue growth would have been 6%, and 8% over the first half of 2020.
Second quarter 2020 Federal Solutions Adjusted EBITDA including noncontrolling interests increased by $12 million, or 33%, compared to the prior year period. Adjusted EBITDA margin increased to 9.9%, or by 240 basis points from the second quarter of 2019. These increases were primarily driven by higher profit margins driven by an increase in incentive fee recognition and a decrease in volume on contracts with pass-through costs.
Critical Infrastructure Segment
Three Months Ended
Growth Fiscal Year Ended Growth
June June Dollars/ Percent June June
30, 30, 30, 30, Dollars/ Percent
2020 2019 2020 2019
Percent Percent
Revenue $
497,249 $
511,245 $
(13,996) -3 $
990,671 $
992,838 $
(2,167) 0
% %
Adjusted EBITDA $
43,405 $
40,396 $
3,009 7 $
72,192 $
71,695 $
497 1
% %
Adjusted EBITDA margin 8.7 7.9 0.8 10 7.3 7.2 0.1 1
% % % % % %
% %
Second quarter 2020 revenue decreased $14 million, or 3%, compared to the prior year period. The decrease was primarily driven by approximately $35 million of delayed contract work as a result of COVID-19, partially offset by an increase in business volume under new and existing contracts. Excluding the impact from COVID-19, revenue growth would have been 4%.
Second quarter 2020 Critical Infrastructure Adjusted EBITDA including noncontrolling interests increased by $3 million, or 7%, compared to the prior year period. Adjusted EBITDA margin increased to 8.7%, or by 80 basis points from the second quarter of 2019. These increases were primarily driven by higher earnings from consolidated joint ventures and improved project margins.
Second Quarter 2020 Key Performance Indicators
-- Book-to-bill ratio (second quarter): 1.0x on net bookings of $1.0
billion. Book-to-bill ratio (trailing twelve-months): 1.0x on net
bookings of $4.0 billion.
-- Total backlog: $7.7 billion, a 9% decrease from the second quarter of
2019.
-- Cash flow from operating activities: $88 million compared to $12 million
in the second quarter of 2019. This increase was driven by strong
collections and income and payroll tax deferrals totaling approximately
$33 million dollars.
-- Debt: total and net debt were $249 million and $120 million,
respectively. The company's net debt to trailing twelve-month adjusted
EBITDA leverage ratio at the end of the second quarter of 2020 was 0.4x.
The company defines net debt as total debt less cash and cash
equivalents, which was $129 million at June 30, 2020.
Recent Significant Contract Wins
Parsons continues to win large single-award, multiple-award, and joint venture projects.
-- Awarded a $307 million contract with a classified customer to provide
enterprise security, including both cyber and physical security. This
contract was awarded in the third quarter of 2020.
-- As the lead partner of a joint venture (JV), Parsons was awarded a $224
million recompete contract for the Riyadh Metro, the largest ongoing
metro project in the world. Parsons' work scope includes program, design
and construction management; systems testing, and commissioning.
-- Awarded a $950 million ceiling multiple-award
indefinite-delivery/indefinite-quantity contract for the U.S. Air
Force's Advanced Battle Management System mission. The Air Force will
use this contract for the maturation, demonstration and proliferation of
capabilities across platforms and domains, leveraging open systems
design, modern software and algorithm development in order to enable
Joint All Domain Command and Control (JADC2).
Recent Additional Corporate Highlights
Parsons recently announced the introduction of three new solutions to maximize the health, safety and security of its communities. The company also appointed three new distinguished members to its Board of Directors. In addition, the company was recognized for its STEM workforce diversity initiatives, its Engineering excellence, and its outstanding mentorship and partnership as part of the Department of Defense's Mentor-Protégé Program.
-- During the second quarter of 2020, Parsons introduced three new
solutions to maximize public safety:
-- DetectWise(TM), an integrated, touchless suite of solutions that
monitors real-time health and facilitates the safe movement of
people in public areas.
-- In partnership with Faunhofer USA, Parsons is in the process of
developing and commercializing a diamond electrode biosensor for
direct and rapid detection of SARS-CoV-2, the virus that causes
coronavirus.
-- Grid Armor(TM), a predictive resiliency solution that helps utility
companies improve operational efficiency and better respond to and
prevent potential catastrophic events such as wildfires, and major
power outages.
-- As announced previously, Letitia A. Long, former director of the
National Geospatial-Intelligence Agency (NGA), was elected to Parsons
board of directors in April 2020. In addition, General Darren W. McDew,
U.S. Air Force (ret.), and David C. Wajsgras were appointed to the
company's board in July 2020. Gen. McDew served with distinction in the
U.S. military for 36 years, culminating as the Commander, United States
Transportation Command (USTRANSCOM). Mr. Wajsgras has 20 years of
experience at the senior executive management level, including Chief
Financial Officer of The Raytheon Company and President of its
Intelligence, Information and Services (IIS) business unit.
-- Signed multiple value-added reseller agreements with COVID-19 health and
safety screening partners.
-- Recognized by STEM Workforce Diversity magazine for the fifth
consecutive year as a top national STEM employer for minority groups,
women, and people with disabilities working in science, technology,
engineering, and math (STEM).
-- Announced that three of the company's projects received Engineering
Excellence Awards from the American Council of Engineering Companies.
These prestigious awards signify the quality of the work Parsons'
performs and the level of attention the company provides to its
customers and to the communities in which it serves.
-- Parsons received its third Nunn-Perry Award for outstanding mentorship
and partnership as part of the Department of Defense Mentor-Protégé
Program with Mb Solutions, Inc. under the Missile Defense Agency.
Fiscal Year 2020 Guidance
The company is again reiterating the fiscal year 2020 guidance it initially issued on March 10, 2020, based on its financial results for the first half of 2020 and its current outlook for the remainder of year. The table below summarizes the company's fiscal year 2020 guidance.
Fiscal Year 2020 Guidance
Revenue
$3.95 billion - $4.05 billion
Adjusted EBITDA including
non-controlling interest
$330 million - $360 million
Cash Flow from Operating
Activities
$230 million - $250 million
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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, August 5, 2020, at 8:00 a.m. ET to discuss the financial results for its second 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 second 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 8494908.
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 August 12, 2020 at +1 855-859-2056 (domestic) or +1 404-537-3406 (international) and entering passcode 8494908.
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 Six Months Ended
June June June June
30, 2020 30, 2019 30, 2020 30, 2019
Revenue $
979,459 $
989,742 $
1,950,452 $
1,894,147
Direct cost of contracts 749,324 784,723 1,518,956 1,498,960
Equity in earnings of unconsolidated joint ventures 3,769 11,634 9,883 22,031
Indirect, general and administrative expenses 187,640 225,359 371,414 402,878
Operating income (loss) 46,264 (8,706) 69,965 14,340
Interest income 196 225 424 702
Interest expense (4,159) (6,376) (8,181) (14,668)
Other income (expense), net 715 1,506 263 1,547
Total other income (expense) (3,248) (4,645) (7,494) (12,419)
Income (loss) before income tax expense 43,016 (13,351) 62,471 1,921
Income tax (expense) benefit (11,891) 53,496 (16,975) 51,610
Net income including noncontrolling interests 31,125 40,145 45,496 53,531
Net (income) loss attributable to noncontrolling interests (7,826) 114 (9,224) (3,531)
Net income attributable to Parsons Corporation $
23,299 $
40,259 $
36,272 $
50,000
Earnings per share:
Basic $
0.23 $
0.44 $
0.36 $
0.59
Diluted $
0.23 $
0.44 $
0.36 $
0.59
Weighted average number shares used to compute basic and diluted EPS (in thousands) (Unaudited)
Three Months Ended Six Months Ended
June June June June
30, 30, 30, 30,
2020 2019 2020 2019
Basic weighted average number of shares outstanding 100,695 92,336 100,682 85,249
Dilutive common share equivalents 291 266
Diluted weighted average number of shares outstanding 100,986 92,336 100,949 85,249
PARSONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)
(Unaudited)
June
30, 2020 December 31, 2019
Assets
Current assets:
Cash and cash equivalents (including
$31,221 and $51,171 Cash of
consolidated joint ventures) $
129,579 $
182,688
Restricted cash and investments 7,041 12,686
Accounts receivable, net (including
$257,967 and $166,355 Accounts
receivable of consolidated joint
ventures, net) 717,358 671,492
Contract assets (including $27,010
and $26,458 Contract assets of
consolidated joint ventures) 645,556 575,089
Prepaid expenses and other current
assets (including $8,524 and $11,182
Prepaid expenses and other current
assets of consolidated joint
ventures) 89,662 84,454
Total current assets 1,589,196 1,526,409
Property and equipment, net
(including $2,672 and $2,945
Property and equipment of
consolidated joint ventures, net) 124,764 122,751
Right of use assets, operating leases 225,054 233,415
Goodwill 1,045,344 1,047,425
Investments in and advances to
unconsolidated joint ventures 64,905 68,620
Intangible assets, net 214,936 259,858
Deferred tax assets 129,737 130,401
Other noncurrent assets 57,246 61,489
Total assets $
3,451,182 $
3,450,368
Liabilities and Shareholders' Equity
(Deficit)
Current liabilities:
Accounts payable (including $91,969
and $85,869 Accounts payable of
consolidated joint ventures) $
209,858 $
216,613
Accrued expenses and other current
liabilities (including $112,014 and
$74,857 Accrued expenses and other
current liabilities of consolidated
joint ventures) 642,357 639,863
Contract liabilities (including
$41,945 and $32,638 Contract
liabilities of consolidated joint
ventures) 219,037 230,681
Short-term lease liabilities,
operating leases 47,648 49,994
Income taxes payable 12,053 7,231
Total current liabilities 1,130,953 1,144,382
Long-term employee incentives 22,122 56,928
Long-term debt 249,448 249,353
Long-term lease liabilities,
operating leases 201,472 203,624
Deferred tax liabilities 9,117 9,621
Other long-term liabilities 131,818 125,704
Total liabilities 1,744,930 1,789,612
Contingencies (Note 12)
Shareholders' equity (deficit):
Common stock, $1 par value;
authorized 1,000,000,000 shares;
146,495,690 and 146,440,701 shares
issued; 23,929,462 and 21,772,888
public shares outstanding;
76,795,221 and 78,896,806 ESOP
shares outstanding 146,496 146,441
Treasury stock, 45,771,008 shares at
cost (934,240) (934,240)
Additional paid-in capital 2,658,036 2,649,975
Accumulated deficit (182,753) (218,025)
Accumulated other comprehensive loss (19,991) (14,261)
Total Parsons Corporation
shareholders' equity 1,667,548 1,629,890
Noncontrolling interests 38,704 30,866
Total shareholders' equity 1,706,252 1,660,756
Total liabilities, redeemable common
stock and shareholders' equity $
3,451,182 $
3,450,368
PARSONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
For the Six Months Ended
June June
30, 2020 30, 2019
Cash flows from operating activities:
Net income including noncontrolling interests $
45,496 $
53,531
Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization 64,490 61,665
Amortization of debt issue costs 369 629
Gain on disposal of property and equipment (43) (24)
Provision for doubtful accounts 38 (866)
Deferred taxes 325 (64,924)
Foreign currency transaction gains and losses 1,185 (352)
Equity in earnings of unconsolidated joint ventures (9,883) (22,031)
Return on investments in unconsolidated joint ventures 15,893 15,023
Stock-based compensation 6,432
Contributions of treasury stock 29,468 24,529
Changes in assets and liabilities, net of acquisitions and newly consolidated
joint ventures:
Accounts receivable (49,618) (97,450)
Contract assets (70,739) (50,842)
Prepaid expenses and current assets (999) (4,967)
Accounts payable (6,228) (4,517)
Accrued expenses and other current liabilities (21,983) 17,763
Contract liabilities (11,047) 11,464
Income taxes 4,048 (7,223)
Other long-term liabilities (28,648) 20,097
Net cash used in operating activities (31,444) (48,495)
Cash flows from investing activities:
Capital expenditures (22,938) (25,953)
Proceeds from sale of property and equipment 943 1,873
Payments for acquisitions, net of cash acquired (287,482)
Investments in unconsolidated joint ventures (3,844) (5,049)
Return of investments in unconsolidated joint ventures 17 4,403
Net cash used in investing activities (25,822) (312,208)
Cash flows from financing activities:
Proceeds from borrowings 180,600 350,000
Repayments of borrowings (180,600) (530,000)
Payments for debt costs and credit agreement (286)
Contributions by noncontrolling interests 223 8,147
Distributions to noncontrolling interests (1,605) (20,787)
Purchase of treasury stock (819)
Taxes paid on vested stock (1,149)
Proceeds from issuance of common stock 1,684 537,331
Dividend paid (52,093)
Net cash (used in) provided by financing activities (847) 291,493
Effect of exchange rate changes (641) (602)
Net decrease in cash, cash equivalents, and restricted cash (58,754) (69,812)
Cash, cash equivalents and restricted cash:
Beginning of year 195,374 281,195
End of period $
136,620 $
211,383
Contract Awards
(in thousands)
:
---
Three Months Ended Six Months Ended
June June June June
30, 2020 30, 2019 30, 2020 30, 2019
Federal Solutions $
433,140 $
422,829 $
1,048,830 $
1,231,369
Critical Infrastructure 571,951 555,313 922,356 967,841
Total Awards $
1,005,091 $
978,142 $
1,971,186 $
2,199,210
Backlog
(in thousands)
:
---
June June
30, 2020 30, 2019
Federal Solutions:
Funded $
1,308,663 $
1,003,167
Unfunded 3,654,203 4,031,137
Total Federal Solutions 4,962,866 5,034,304
Critical Infrastructure:
Funded 2,719,037 3,428,364
Unfunded 36,787 38,286
Total Critical Infrastructure 2,755,824 3,466,650
Total Backlog $
7,718,690 $
8,500,954
Book-To-Bill Ratio:
---
Three Months Ended Six Months Ended
June June June June
30, 2020 30, 2019 30, 2020 30, 2019
Federal Solutions 0.9 0.9 1.1 1.4
Critical Infrastructure 1.2 1.1 0.9 1.0
Overall 1.0 1.0 1.0 1.2
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 Six Months Ended
June June June June
30, 2020 30, 2019 30, 2020 30, 2019
Net income attributable to Parsons Corporation $
23,299 $
40,259 $
36,272 $
50,000
Interest expense, net 3,963 6,151 7,757 13,966
Income tax provision (benefit) 11,891 (53,496) 16,975 (51,610)
Depreciation and amortization (a) 32,081 31,074 64,490 61,665
Net income attributable to noncontrolling interests 7,826 (114) 9,224 3,531
Equity based compensation (b) 12,854 43,311 5,133 47,161
Transaction-related costs (c) (2,485) 7,715 9,526 17,070
Restructuring (d) 1,143 353 1,110 2,571
Other (e) 589 952 1,170 3,875
Adjusted EBITDA $
91,161 $
76,205 $
151,657 $
148,229
(a) Depreciation and amortization for the
three and six months ended June 30,
2020 is $27.0 million and $54.4
million, respectively in the Federal
Solutions Segment and $5.1 million
and $10.1 million, respectively in
the Critical Infrastructure Segment.
Depreciation and amortization for
the three and six months ended June
30, 2019 is $24.2 million and $49.0
million, respectively in the Federal
Solutions Segment and $6.8 million
and $12.6 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 Six Months Ended
June June June June
30, 2020 30, 2019 30, 2020 30, 2019
Federal Solutions Adjusted EBITDA attributable to $
47,700 $
35,700 $
79,317 $
76,299
Parsons Corporation
Federal Solutions Adjusted EBITDA attributable to 56 109 148 235
noncontrolling interests
Federal Solutions Adjusted EBITDA including $
47,756 $
35,809 $
79,465 $
76,534
noncontrolling interests
Critical Infrastructure Adjusted EBITDA attributable to 35,519 40,525 62,876 68,201
Parsons Corporation
Critical Infrastructure Adjusted EBITDA attributable to 7,886 (129) 9,316 3,494
noncontrolling interests
Critical Infrastructure Adjusted EBITDA including $
43,405 $
40,396 $
72,192 $
71,695
noncontrolling interests
Total Adjusted EBITDA including noncontrolling interests $
91,161 $
76,205 $
151,657 $
148,229
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 Six Months Ended
June June June June
30, 2020 30, 2019 30, 2020 30, 2019
Net income attributable to Parsons Corporation $
23,299 $
40,259 $
36,272 $
50,000
Deferred tax asset recognition (a) (56,363) (56,363)
Acquisition related intangible asset amortization 22,127 21,389 44,826 42,295
Equity based compensation (b) 12,854 43,311 5,133 47,161
Transaction-related costs (c) (2,485) 7,715 9,526 17,070
Restructuring (d) 1,143 353 1,110 2,571
Other (e) 589 952 1,170 3,875
Tax effect on adjustments (8,023) (17,578) (15,591) (18,066)
Adjusted net income attributable to Parsons Corporation 49,504 40,038 82,446 88,543
Adjusted earnings per share:
Weighted-average number of basic shares 100,695 92,336 100,682 85,249
outstanding
Weighted-average number of diluted shares 100,986 92,336 100,949 85,249
outstanding
Adjusted net income attributable to Parsons $
0.49 $
0.43 $
0.82 $
1.04
Corporation per basic share
Adjusted net income attributable to Parsons $
0.49 $
0.43 $
0.82 $
1.04
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.
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SOURCE Parsons Corporation
