Parsons Reports Fourth Quarter and Full Year 2020 Results
CENTREVILLE, Va., Feb. 24, 2021 /PRNewswire/ -- Parsons Corporation (NYSE: PSN) today announced financial results for the fourth quarter and year ended December 31, 2020.
CEO Commentary
"We delivered robust cash flow and margins, along with a healthy book-to-bill ratio in the fourth quarter. We also generated strong full-year results in the midst of a global pandemic, setting new corporate records for cash flow, adjusted EBITDA, and adjusted EBITDA margin," said Chuck Harrington, chairman and chief executive officer of Parsons Corporation.
"We will continue to build and leverage our strong balance sheet and cash flow to drive growth and differentiation through investments in our people, technology, and M&A. We are excited about our outlook and believe our strategy and portfolio are closely aligned with the Biden Administration's national defense, infrastructure, and environmental priorities. We look forward to providing a more detailed update on our strategy and outlook during our upcoming investor day."
Fourth Quarter 2020 Results
Total revenue for the fourth quarter of 2020 decreased by $73 million, or 7%, from the prior year period to $964 million. This decrease was primarily driven by $45 million of contract work impacted by the COVID-19 pandemic and lower pass-through revenue. Operating income increased 71% to $42 million primarily due to lower indirect, general and administrative (IG&A) expenses and increased net contract profitability. Net income increased to $22 million and net income margin increased to 2.2% from the prior year period. These increases were primarily driven by the items noted above. Diluted earnings per share (EPS) attributable to Parsons was $0.21 in the fourth quarter of 2020, compared to $0.14 in the prior year period.
Adjusted EBITDA including noncontrolling interests for the fourth quarter of 2020 was $90 million, a 3% increase over the prior year period. Adjusted EBITDA margin increased 90 basis points to 9.4%. Fourth quarter 2020 adjusted EBITDA was impacted by an $11 million write-down on an unconsolidated joint venture Critical Infrastructure project
Adjusted EPS increased to $0.51, compared to $0.48 in the fourth quarter of 2019.
Fiscal Year 2020 Results
Total revenue of $3.9 billion for fiscal year 2020 decreased by $36 million, or 1% from the prior year period. This decrease was driven by approximately $197 million of contract work that was impacted by COVID-19. Operating income increased $86 million in fiscal year 2020 primarily due to lower IG&A costs. Net income decreased 18% from fiscal year 2019 to $99 million, and net income margin decreased 50 basis points to 2.5%. Diluted earnings per share (EPS) attributable to Parsons decreased to $0.97 due to income tax benefits realized in fiscal year 2019 associated with the establishment of $94 million of deferred tax assets resulting from Parsons' conversion from an S-Corporation to a C-Corporation.
Adjusted EBITDA including noncontrolling interests for fiscal year 2020 increased 5% over the prior year period to $343 million. Adjusted EBITDA margin increased 50 basis points to 8.7% due to higher margins in the critical infrastructure segment.
Adjusted EPS decreased to $1.90, compared to $2.04 in fiscal year 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
Fiscal Year Ended
Growth
December December Dollars/ Percent December December Dollars/ Percent
31, 2020 31, 2019 31, 2020 31, 2019
Percent Percent
Revenue $
453,973 $
500,423 $
(46,450) -9 $
1,911,910 $
1,887,907 $
24,003 1
% %
Adjusted EBITDA $
42,249 $
42,563 $
(314) -1 $
167,650 $
169,542 $
(1,892) -1
% %
Adjusted EBITDA margin 9.3 8.5 0.8 9 8.8
% 9.0
% -0.2 -2
% % % % % %
Fourth quarter 2020 revenue decreased $46 million, or 9%, compared to the prior year period primarily due to approximately $32 million of contract work impacted by COVID-19, lower pass-through revenue and contract transitions, offset by $10 million of acquisition revenue.
Fourth quarter 2020 Federal Solutions Adjusted EBITDA including noncontrolling interests decreased by $0.3 million, or 1%, compared to the prior year period. Adjusted EBITDA margin increased 80 basis points to 9.3% from the fourth quarter of 2019. Adjusted EBITDA was relatively flat with the prior year period and the increase in adjusted EBITDA margin was driven by increased contract profitability.
Fiscal year 2020 revenue increased $24 million, or 1%, compared to the prior year period. The increase was driven by $28 million from acquisitions, offset by approximately $120 million of contract work impacted by COVID-19.
Fiscal year 2020 Federal Solutions Adjusted EBITDA including noncontrolling interests decreased by $2 million, or 1%, compared to fiscal year 2019. Adjusted EBITDA margin decreased to 8.8%, or by 20 basis points from fiscal year 2019. The decreases were driven by higher indirect, general and administrative costs, primarily as a result of increased allocations and public company costs.
Critical Infrastructure Segment
Three Months Ended
Growth Fiscal Year Ended
Growth
December December Dollars/ Percent December December Dollars/ Percent
31, 2020 31, 2019 31, 2020 31, 2019
Percent Percent
Revenue $
510,285 $
536,965 $
(26,680) -5 $
2,007,036 $
2,066,905 $
(59,869) -3
% %
Adjusted EBITDA $
47,914 $
45,265 $
2,649 6 $
174,971 $
155,505 $
19,466 13
% %
Adjusted EBITDA margin 9.4 8.4 1.0 11 8.7 7.5 1.2 16
% % % % % %
% %
Fourth quarter 2020 Critical Infrastructure revenue decreased $27 million, or 5%, compared to the prior year period. The decrease was primarily driven by approximately $13 million of contract work impacted by COVID-19 and lower volume on contracts with pass-through revenue.
Fourth quarter 2020 Adjusted EBITDA including noncontrolling interests increased by $3 million, or 6%, compared to the prior year period. Adjusted EBITDA margin increased 100 basis points to 9.4%. These increases were primarily driven by increased contract profitability, offset by an $11 million write-down on an unconsolidated joint venture project.
Fiscal year 2020 Critical Infrastructure revenue decreased $60 million, or 3%, compared to the prior year period. The decrease was driven by approximately $77 million of contract work that was impacted by COVID-19.
Fiscal year 2020 Adjusted EBITDA including noncontrolling interests increased by $19 million, or 13%, compared to fiscal year 2019. Adjusted EBITDA margin increased by 120 basis points to 8.7% from fiscal year 2019. The increases were driven primarily by increased contract profitability, offset by a $15 million write-down on an unconsolidated joint venture project.
Fourth Quarter 2020 Key Performance Indicators
-- Book-to-bill ratio (fourth quarter): 1.1x on net bookings of $1.1
billion. Book-to-bill ratio (trailing twelve-months): 1.1x on net
bookings of $4.2 billion.
-- Total backlog: $8 billion, a 0.8% increase from the fourth quarter of
2019 and a 4.1% increase from the third quarter of 2020.
-- Cash flow from operating activities: Fourth quarter 2020 cash flow of
$176 million. For fiscal year 2020, cash flow from operating activities
was $289 million compared to $220 million in fiscal year 2019.
-- Net Debt: Cash and cash equivalents were $484 million and total debt was
$590 million. The company's pro forma net debt to trailing twelve-month
adjusted EBITDA leverage ratio at the end of the fourth quarter of 2020
was 0.3x. The company defines net debt as total debt less cash and cash
equivalents.
Fourth Quarter 2020 Significant Contract Wins
Parsons continues to win large single-award and multiple-award contracts in both the Federal Solutions and Critical Infrastructure markets.
-- As part of a 50-50 joint venture company, Parsons was selected by the
City of Edmonton, Alberta (Canada) to design and build the $1.2 billion
Valley Line West Light Rail Transit project.
-- One of four awardees on a $2 billion ceiling multiple-award IDIQ
COVID-19 contract by the Department of Homeland Security to provide
flexible, innovative testing solutions designed to keep DHS employees
safe and reduce the risk of disease spread. The offerings will be
flexible point-of-care or laboratory-based solutions that support
screening capabilities.
-- Awarded an $80 million contract with a classified space customer.
-- Awarded a $32 million contract by the San Bernardino County
Transportation Authority (SBCTA) to support administration of a $4.3
billion program to improve transportation and traffic management
programs in the county.
Recent Additional Corporate Highlights
Parsons continues to be recognized for its ethical business practice, win employee recognition awards, and deliver innovative projects that demonstrate strong program execution, commitment to customer success, and significant community benefits. The company also 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.
-- Appointed Carey Smith, president and chief operating officer, to
Parsons' board of directors.
-- Named by Ethisphere, a global leader in defining and advancing the
standards of ethical business practices, as one of the 2021 World's Most
Ethical Companies(®). The company has been honored with this
recognition for 12 consecutive years.
-- Forbes recognized Parsons as one of the World's Best Employers in 2020.
Forbes partnered with market research firm Statista to compile their
fourth-annual list of the World's Best Employers.
-- Announced that NJ TRANSIT completed the final deployment of its Positive
Train Control system; an advanced, technological capability that
increases the safety of rail transit and protects riders.
-- Recognized with a Gold Award for Infrastructure by the Canadian Council
for Public-Private Partnerships. The award honors outstanding
achievements in public-private partnerships (P3s) for Parsons' work on
the Regina Bypass Project, which was the largest transportation
infrastructure project in Saskatchewan's history. The award recognizes
the project delivery team for effective risk allocation, reduced cost
compared to a traditional procurement model and significant community
benefits including improved safety.
-- Closed the Braxton Science & Technology Group, LLC acquisition in a deal
valued at approximately $311 million ($267 million adjusted for the tax
asset). The transaction is consistent with Parsons' strategy of
acquiring high-growth defense and intelligence companies with software
and hardware intellectual property that enhance its technology and
transactional revenue growth and margin profile.
Fiscal Year 2021 Guidance
The table below summarizes the company's fiscal year 2021 guidance.
Fiscal Year 2021 Guidance
Revenue
$3.85 billion - $4.05 billion
Adjusted EBITDA including
non-controlling interest
$350 million - $375 million
Cash Flow from Operating
Activities
$280 million - $310 million
---
Net income guidance is not presented as the company believes volatility associated with interest, taxes, depreciation, amortization and other matters affecting net income, including but not limited to one-time and nonrecurring events and impact of M&A, will preclude the company from providing accurate net income guidance for fiscal year 2021.
Conference Call Information
Parsons will host a conference call today, February 24, 2021, at 8:00 a.m. ET to discuss the financial results for its fourth quarter and fiscal year 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 fourth quarter and fiscal year 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 8827357.
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 March 3, 2021 at +1 855-859-2056 (domestic) or +1 404-537-3406 (international) and entering passcode 8827357.
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 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. 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 material 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 including 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, 2020 on Form 10-K, filed on February 24, 2021, 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 statements 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)
(Quarterly Data Unaudited)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Revenue $
964,258 $
1,037,388 $
3,918,946 $
3,954,812
Direct cost of contracts 734,362 825,550 3,042,087 3,123,062
Equity in earnings of unconsolidated joint ventures 3,435 12,416 30,059 41,721
Indirect, general and administrative expenses 191,752 199,980 729,103 781,408
Operating income 41,579 24,274 177,815 92,063
Interest income 275 171 787 1,300
Interest expense (7,300) (4,152) (20,956) (23,729)
Other income (expense), net 1,851 (812) 3,767 (2,392)
Total other income (expense) (5,174) (4,793) (16,402) (24,821)
Income before income tax expense 36,405 19,481 161,413 67,242
Income tax (expense) benefit (9,500) 2,823 (42,492) 69,886
Net income including noncontrolling interests 26,905 22,304 118,921 137,128
Net income attributable to noncontrolling interests (5,294) (8,582) (20,380) (16,594)
Net income attributable to Parsons Corporation $
21,611 $
13,722 $
98,541 $
120,534
Earnings per share:
Basic $
0.21 $
0.14 $
0.98 $
1.30
Diluted $
0.21 $
0.14 $
0.97 $
1.30
Weighted average number shares used to compute basic and diluted EPS (Quarterly Data Unaudited) (in thousands)
Three Months Ended Twelve Months Ended
December December December December
31, 2020 31, 2019 31, 2020 31, 2019
Basic weighted average number of shares outstanding 101,291 99,742 100,848 92,419
Equity-based awards 472 342 357 334
Diluted weighted average number of shares outstanding 101,763 100,084 101,205 92,753
PARSONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)
December 31, 2020 December 31, 2019
Assets
Current assets:
Cash and cash equivalents (including $75,220 and $51,171 Cash of consolidated joint $
483,609 $
182,688
ventures)
Restricted cash and investments 3,606 12,686
Accounts receivable, net (including $190,643 and $166,355 Accounts receivable of 698,578 671,492
consolidated joint ventures, net)
Contract assets (including $23,498 and $26,458 Contract assets of consolidated joint 576,568 575,089
ventures)
Prepaid expenses and other current assets (including $3,045 and $11,182 Prepaid 80,769 84,454
expenses and other current assets of consolidated joint ventures)
Total current assets 1,843,130 1,526,409
Property and equipment, net (including $2,629 and $2,945 Property and equipment of 121,027 122,751
consolidated joint ventures, net)
Right of use assets, operating leases 210,398 233,415
Goodwill 1,261,978 1,047,425
Investments in and advances to unconsolidated joint ventures 68,975 68,620
Intangible assets, net 245,958 259,858
Deferred tax assets 130,200 130,401
Other noncurrent assets 56,038 61,489
Total assets $
3,937,704 $
3,450,368
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable (including $97,810 and $85,869 Accounts payable of consolidated joint $
225,679 $
216,613
ventures)
Accrued expenses and other current liabilities (including $68,801 and $74,857 Accrued 650,753 639,863
expenses and other current liabilities of consolidated joint ventures)
Contract liabilities (including $33,922 and $32,638 Contract liabilities of consolidated joint 201,864 230,681
ventures)
Short-term lease liabilities, operating leases 54,133 49,994
Income taxes payable 4,980 7,231
Short-term debt 50,000
Total current liabilities 1,187,409 1,144,382
Long-term employee incentives 21,828 56,928
Long-term debt 539,998 249,353
Long-term lease liabilities, operating leases 182,467 203,624
Deferred tax liabilities 12,285 9,621
Other long-term liabilities 132,300 125,704
Total liabilities 2,076,287 1,789,612
Contingencies (Note 15)
Shareholders' equity:
Common stock, $1 par value; authorized 1,000,000,000 shares; 146,609,288 and 146,609 146,441
146,440,701 shares issued; 25,719,350 and 21,772,888 public shares outstanding;
76,641,312 and 78,896,806 ESOP shares outstanding
Treasury stock, 44,248,626 shares at cost (899,328) (934,240)
Additional paid-in capital 2,700,925 2,649,975
Accumulated deficit (120,569) (218,025)
Accumulated other comprehensive loss (13,865) (14,261)
Total Parsons Corporation shareholders' equity 1,813,772 1,629,890
Noncontrolling interests 47,645 30,866
Total shareholders' equity 1,861,417 1,660,756
Total liabilities and shareholders' equity $
3,937,704 $
3,450,368
PARSONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2020 and December 31, 2019
(in thousands) 2020 2019
Cash flows from operating activities
Net income including noncontrolling interests $
118,921 $
137,128
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 127,980 125,700
Amortization of debt issue costs 1,356 973
Amortization of convertible notes discount 3,831
Loss on disposal of property and equipment 116 1,042
Provision for doubtful accounts (1,503) 290
Deferred taxes 1,271 (123,338)
Foreign currency transaction gains and losses (493) 4,472
Equity in earnings of unconsolidated joint ventures (30,059) (41,721)
Return on investments in unconsolidated joint ventures 41,457 51,077
Stock-based compensation 15,234 8,272
Contributions of treasury stock 55,327 53,644
Changes in assets and liabilities, net of acquisitions and newly consolidated joint
ventures
Accounts receivable (8,623) (30,206)
Contract assets 9,243 (49,999)
Prepaid expenses and other assets 11,494 (22,110)
Accounts payable 1,494 (17,123)
Accrued expenses and other current liabilities 3,405 78,366
Contract liabilities (29,674) 20,146
Income taxes (3,080) (5,421)
Other long-term liabilities (28,536) 29,048
Net cash provided by operating activities 289,161 220,240
Cash flows from investing activities
Capital expenditures (34,036) (67,597)
Proceeds from sale of property and equipment 1,546 3,789
Payments for acquisitions, net of cash acquired (302,894) (494,826)
Investments in unconsolidated joint ventures (11,038) (24,579)
Return of investments in unconsolidated joint ventures 53 12,410
Net cash used in investing activities (346,369) (570,803)
Cash flows from financing activities
Proceeds from borrowings 212,900 597,200
Repayments of borrowings (212,900) (777,200)
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 (10,250)
Contributions by noncontrolling interests 2,215 10,093
Distributions to noncontrolling interests (5,816) (42,285)
Purchase of treasury stock (6,272)
Taxes paid on vested stock (1,149)
Proceeds from issuance of common stock 4,386 536,879
Dividend paid (52,093)
Net cash provided by financing activities 348,226 266,036
Effect of exchange rate changes 823 (1,294)
Net increase (decrease) in cash, cash equivalents and restricted cash 291,841 (85,821)
Cash, cash equivalents and restricted cash
Beginning of year 195,374 281,195
End of year $
487,215 $
195,374
Cash paid during the year for
Interest $
14,207 $
23,254
Income taxes (net of refunds) 55,354 60,477
Contract Awards
(in thousands)
:
---
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Federal Solutions $
388,748 $
437,617 $
2,175,221 $
2,514,545
Critical Infrastructure 665,153 465,050 2,020,425 1,722,556
Total Awards $
1,053,901 $
902,667 $
4,195,646 $
4,237,101
Backlog
(in thousands)
:
---
December 31, 2020 December 31, 2019
Federal Solutions:
Funded $
1,176,049 $
1,153,041
Unfunded 4,009,156 3,882,289
Total Federal Solutions 5,185,205 5,035,330
Critical Infrastructure:
Funded 2,830,318 2,954,955
Unfunded 77,735 40,800
Total Critical Infrastructure 2,908,053 2,995,755
Total Backlog $
8,093,258 $
8,031,085
Book-To-Bill Ratio:
---
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Federal Solutions 0.9 0.9 1.1 1.3
Critical Infrastructure 1.3 0.9 1.0 0.8
Overall 1.1 0.9 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 Twelve Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Net income attributable to Parsons Corporation $
21,611 $
13,722 $
98,541 $
120,534
Interest expense, net 7,025 3,981 20,169 22,429
Income tax provision (benefit) 9,500 (2,823) 42,492 (69,886)
Depreciation and amortization (a) 32,538 33,008 127,980 125,700
Net income attributable to noncontrolling interests 5,294 8,582 20,380 16,594
Equity based compensation (b) 5,643 20,240 9,785 65,744
Transaction-related costs (c) 7,985 7,392 19,922 34,353
Restructuring (d) 718 544 2,193 3,424
Other (e) (151) 3,182 1,159 6,155
Adjusted EBITDA $
90,163 $
87,828 $
342,621 $
325,047
(a) Depreciation and amortization for the
three months and year ended December
31, 2020 is $27.4 million and $107.5
million, respectively in the Federal
Solutions Segment and $5.1 million
and $20.5 million, respectively in
the Critical Infrastructure Segment.
Depreciation and amortization for
the three months and year ended
December 31, 2019 is $27.9 million
and $103.0 million, respectively in
the Federal Solutions Segment and
$5.1 million and $22.7 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 Twelve Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Federal Solutions Adjusted EBITDA attributable to $
42,149 $
42,442 $
167,340 $
169,100
Parsons Corporation
Federal Solutions Adjusted EBITDA attributable to 100 121 310 442
noncontrolling interests
Federal Solutions Adjusted EBITDA including $
42,249 $
42,563 $
167,650 $
169,542
noncontrolling interests
Critical Infrastructure Adjusted EBITDA attributable to 42,796 36,674 154,528 138,851
Parsons Corporation
Critical Infrastructure Adjusted EBITDA attributable to 5,118 8,591 20,443 16,654
noncontrolling interests
Critical Infrastructure Adjusted EBITDA including $
47,914 $
45,265 $
174,971 $
155,505
noncontrolling interests
Total Adjusted EBITDA including noncontrolling interests $
90,163 $
87,828 $
342,621 $
325,047
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 Twelve Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Net income attributable to Parsons Corporation $
21,611 $
13,722 $
98,541 $
120,534
Deferred tax asset recognition (a) 3,160 (8,206) 3,897 (93,878)
Acquisition related intangible asset amortization 22,116 23,820 87,823 88,258
Equity based compensation (b) 5,643 20,240 9,785 65,744
Transaction-related costs (c) 7,985 7,392 19,922 34,353
Restructuring (d) 718 544 2,193 3,424
Other (e) (151) 3,182 1,159 6,155
Tax effect on adjustments (9,241) (12,299) (31,492) (35,390)
Adjusted net income attributable to Parsons Corporation 51,841 48,395 191,828 189,200
Adjusted earnings per share:
Weighted-average number of basic shares outstanding 101,291 99,742 100,848 92,419
Weighted-average number of diluted shares outstanding (f) 101,763 100,084 101,205 92,753
Adjusted net income attributable to Parsons Corporation per basic share $
0.51 $
0.49 $
1.90 $
2.05
Adjusted net income attributable to Parsons Corporation per diluted share $
0.51 $
0.48 $
1.90 $
2.04
(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
