Press Release Details

Parsons Reports Fourth Quarter and Full Year 2020 Results

02/24/2021
Q4 2020 Highlights
- Revenue of $964 million, includes $45 million of adverse impact from COVID-19
- Net income of $22 million and margin of 2.2%; adjusted EBITDA of $90 million and margin of 9.4%
- Cash flow from operating activities of $176 million
- Book-to-bill ratio of 1.1x for Q4 2020 and on a trailing 12-month basis
- Closed Braxton acquisition; accelerates growth and expands margins in high-priority space market
- Recognized by Forbes as one of the world's best employers and by Ethisphere as one of the world's most ethical companies
Fiscal year 2020 Highlights
- Revenue of $3.9 billion, includes approximately $197 million of adverse impact from COVID-19
- Net income of $99 million and margin of 2.5%
- Adjusted EBITDA of $343 million and margin of 8.7%
- Cash flow from operating activities of $289 million
- Commitment to technology innovation and delivering a better world drives new contract wins and ESG recognition

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
31, 2020

   

December
31, 2019

   

Dollars/

Percent

   

Percent

   

December
31, 2020

   

December
31, 2019

   

Dollars/

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
31, 2020

   

December
31, 2019

   

Dollars/

Percent

   

Percent

   

December
31, 2020

   

December
31, 2019

   

Dollars/

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.

financial-news

 

Media:

Investor Relations:

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,
2020

   

December 31,
2019

   

December 31,
2020

   

December 31,
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
31, 2020

   

December
31, 2019

   

December
31, 2020

   

December
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
ventures)

 

$

483,609

   

$

182,688

 
 

Restricted cash and investments

   

3,606

     

12,686

 
 

Accounts receivable, net (including $190,643 and $166,355 Accounts receivable of
consolidated joint ventures, net)

   

698,578

     

671,492

 
 

Contract assets (including $23,498 and $26,458 Contract assets of consolidated joint
ventures)

   

576,568

     

575,089

 
 

Prepaid expenses and other current assets (including $3,045 and $11,182 Prepaid
expenses and other current assets of consolidated joint ventures)

   

80,769

     

84,454

 
 

Total current assets

   

1,843,130

     

1,526,409

 
                   
 

Property and equipment, net (including $2,629 and $2,945 Property and equipment of
consolidated joint ventures, net)

   

121,027

     

122,751

 
 

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
ventures)

 

$

225,679

   

$

216,613

 
 

Accrued expenses and other current liabilities (including $68,801 and $74,857 Accrued
expenses and other current liabilities of consolidated joint ventures)

   

650,753

     

639,863

 
 

Contract liabilities (including $33,922 and $32,638 Contract liabilities of consolidated joint
ventures)

   

201,864

     

230,681

 
 

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
146,440,701 shares issued; 25,719,350 and 21,772,888 public shares outstanding;
76,641,312 and 78,896,806 ESOP shares outstanding

   

146,609

     

146,441

 
 

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,
2020

   

December 31,
2019

   

December 31,
2020

   

December 31,
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,
2020

   

December 31,
2019

   

December 31,
2020

   

December 31,
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,
2020

   

December 31,
2019

   

December 31,
2020

   

December 31,
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,
2020

   

December 31,
2019

   

December 31,
2020

   

December 31,
2019

 

Federal Solutions Adjusted EBITDA attributable to
Parsons Corporation

 

$

42,149

   

$

42,442

   

$

167,340

   

$

169,100

 

Federal Solutions Adjusted EBITDA attributable to
noncontrolling interests

   

100

     

121

     

310

     

442

 

Federal Solutions Adjusted EBITDA including
noncontrolling interests

 

$

42,249

   

$

42,563

   

$

167,650

   

$

169,542

 
                                 

Critical Infrastructure Adjusted EBITDA attributable to
Parsons Corporation

   

42,796

     

36,674

     

154,528

     

138,851

 

Critical Infrastructure Adjusted EBITDA attributable to
noncontrolling interests

   

5,118

     

8,591

     

20,443

     

16,654

 

Critical Infrastructure Adjusted EBITDA including
noncontrolling interests

 

$

47,914

   

$

45,265

   

$

174,971

   

$

155,505

 
                                 

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,
2020

   

December 31,
2019

   

December 31,
2020

   

December 31,
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

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