Le Lézard
Classified in: Science and technology, Business
Subjects: ERN, CCA

Parsons Delivers Strong Third Quarter Results; Momentum in Core Markets


CENTREVILLE, Va., Nov. 12, 2019 /PRNewswire/ -- Parsons Corporation (NYSE: PSN) today announced financial results for the third quarter ended September 30, 2019.

CEO Commentary

"We reported solid third quarter results with record revenue and adjusted EBITDA and strong cash flow," said Chuck Harrington, Chairman and CEO of Parsons Corporation. "We are established in growing and enduring markets, and we continue to win large strategic contracts, including our largest single-award cyber program to date. Our year-to-date margin expansion is driven by selling more technology-led solutions, shaping our portfolio, acquiring higher margin businesses and solid execution. Today, we are also announcing the promotion of Carey Smith to President in addition to her current role as Chief Operating Officer. This promotion recognizes Carey's contributions to our transformation and adds additional functions under her leadership to enhance support to our customers and customer-facing teams. We are excited about our future and plan to leverage our business momentum, technology-driven solutions and robust balance sheet to drive future growth and shareholder value."

Third Quarter 2019 Results

Total revenue for the third quarter of 2019 increased $47 million to over $1 billion, a new company record. Operating income decreased $2 million in the third quarter of 2019 primarily due to an additional $15 million of increased acquisition-related intangible amortization expenses and transaction-related costs. Diluted earnings per share (EPS) attributable to Parsons increased 10% to $0.57 primarily due to the positive impact from elections made in connection with the filing of the Company's 2018 S-Corporation tax return during the third quarter, offset by the increased acquisition-related intangible amortization and transaction-related expenses noted above and additional shares issued in the Company's IPO.

Adjusted EBITDA for the third quarter of 2019 was $89 million, a 0.5% increase over the prior year period. Adjusted EBITDA margin decreased to 8.7% due to lower margins in the Company's Critical Infrastructure segment, offset by higher margins in the Federal Solutions segment.

Adjusted EBITDA attributable to Parsons for the third quarter of 2019 was $84 million, a 1% increase over the prior year's strong performance. Adjusted EPS decreased to $0.53, compared to $0.82 in the third quarter of 2018 primarily due to a higher income tax provision and additional shares issued in the Company's IPO.

Information about the Company's use of non-GAAP financial information is provided on page eleven and in the non-GAAP reconciliation tables included herein.

Segment Results

Federal Solutions Segment



Three Months Ended



Growth



Nine Months Ended



Growth




September 28,
2018



September 30,
2019



Dollars/

Percent



Percent



September 28,
2018



September 30,
2019



Dollars/

Percent



Percent


Revenue


$

443,725



$

486,175



$

42,450




10

%


$

1,076,125



$

1,387,484



$

311,359




29

%

Adj. EBITDA including noncontrolling interests


$

45,641



$

50,445



$

4,804




11

%


$

101,266



$

126,979



$

25,713




25

%

Adj. EBITDA margin including noncontrolling interests



10.3

%



10.4

%



0.1

%



1

%



9.4

%



9.2

%



-0.3

%



-3

%

Adj. EBITDA attributable to Parsons Corp.


$

45,556



$

50,359



$

4,803




11

%


$

101,052



$

126,658



$

25,606




25

%

Adj. EBITDA margin attributable to Parsons Corp.



10.3

%



10.4

%



0.1

%



1

%



9.4

%



9.1

%



-0.3

%



-3

%

Third quarter 2019 revenue increased $42 million, or 10%, compared to the prior year period. The increase was driven by $39 million from acquisitions and organic growth of 1%. Total revenue for the third quarter of 2018 included approximately $20 million of unusually high volume on two contracts. Excluding this increased activity, organic revenue would have increased by 5%.

Federal Solutions Adjusted EBITDA including noncontrolling interests and Adjusted EBITDA attributable to Parsons Corporation for the third quarter of 2019 both increased by $5 million, or 11%, compared to the prior year period. Adjusted EBITDA margin for both metrics increased to 10.4%, or by 10 basis points from the third quarter of 2018. The increases in Adjusted EBITDA margin were driven primarily by additional contract incentive fees and contributions from the Company's acquisitions, offset by increased bid and proposal costs and a greater allocation of corporate indirect general and administrative costs to the Company's Federal Solutions segment in-line with its growing share of the overall business.

Critical Infrastructure Segment



Three Months Ended



Growth



Nine Months Ended



Growth




September 28,
2018



September 30,
2019



Dollars/

Percent



Percent



September 28,
2018



September 30,
2019



Dollars/

Percent



Percent


Revenue


$

532,432



$

537,102



$

4,670




1

%


$

1,555,443



$

1,529,940



$

(25,503)




-2

%

Adj. EBITDA including noncontrolling interests


$

42,923



$

38,545



$

(4,378)




-10

%


$

90,763



$

110,240



$

19,477




21

%

Adj. EBITDA margin including noncontrolling interests



8.1

%



7.2

%



-0.9

%



-11

%



5.8

%



7.2

%



1.4

%



23

%

Adj. EBITDA attributable to Parsons Corp.


$

38,006



$

33,976



$

(4,030)




-11

%


$

80,296



$

102,177



$

21,881




27

%

Adj. EBITDA margin attributable to Parsons Corp.



7.1

%



6.3

%



-0.8

%



-11

%



5.2

%



6.7

%



1.5

%



29

%

Third quarter 2019 revenue increased $5 million, or 1%, compared to the prior year period. The increase was due to growth on existing contracts.

Critical Infrastructure Adjusted EBITDA including noncontrolling interests for the third quarter of 2019 decreased $4 million, or -10%, compared to the prior year period. Adjusted EBITDA margin including noncontrolling interests decreased to 7.2%, or by 90 basis points from the third quarter of 2018. The decreases were primarily driven by lower equity in earnings from unconsolidated joint ventures, including the completion of a large joint venture program, and an increase in indirect general administrative costs, partially offset by an increase in project margins from higher margin new awards.

Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation for the third quarter of 2019 decreased $4 million, or -11%, compared to the prior year period. Adjusted EBITDA margin attributable to Parsons decreased to 6.3%, or by 80 basis points from the third quarter of 2018. The decreases were primarily driven by the same factors as noted above.

Third Quarter 2019 Key Performance Indicators

The Company continues to achieve a strong book-to-bill ratio and increase its backlog. Strong third quarter operating cash flow enabled the Company to repay the entire $140 million it borrowed under its revolving credit facility in connection with the $214 million acquisition of QRC technologies. The Company's operating cash flow and significant borrowing capacity will enable ongoing investments in its growth strategy.

Recent Developments

Third Quarter 2019 Significant Contract Wins

Parsons continues to win large strategic contracts in growing and enduring markets. During the third quarter, the Company won six contracts over $100 million, including three single-award contracts and its largest ever cyber contract, and prime positions on three multiple-award IDIQ vehicles. Parsons also joined Northrop Grumman's Ground Based Strategic Deterrent (GBSD) team. The Company's strong customer relationships, rigorous capture processes, and investments in technology and people are driving success in winning new contracts and expanding existing contracts.

Corporate Social Responsibility Recognition

The Company's focus on corporate social responsibility initiatives is driving international recognition.

Conference Call Information

Parsons will host a conference call today, November 12, 2019, at 8:00 a.m. ET to discuss the financial results for its third quarter 2019.

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 also may access a slide presentation on the website, which summarizes the Company's third quarter 2019 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) 211-3159 (domestic) or +1 (647) 689-6592 (international) and entering passcode 8757416.

A replay will be available on the Company's website approximately two hours after the conference call and continuing for one year. A telephonic replay also will be available through November 19, 2019 at +1 (800) 585-8367 (domestic) or +1 (416) 621-4642 (international) and entering passcode 8757416.

About Parsons Corporation

Parsons is a leading disruptive technology provider for the future of global defense, intelligence and critical infrastructure 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 presentation 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: 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 Registration Statement on Form S-1 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.

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

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)




For the Three Months Ended




For the Nine Months Ended




September 28,
2018



September 30,
2019




September 28,
2018



September 30,
2019


Revenues


$

976,157



$

1,023,277




$

2,631,568



$

2,917,424


Direct costs of contracts



783,018




798,552





2,054,201




2,297,512


Equity in earnings of unconsolidated joint ventures



12,707




7,274





25,577




29,305


Indirect, general and administrative expenses



150,733




178,550





422,028




581,428


Operating income



55,113




53,449





180,916




67,789


Interest income



351




427





2,358




1,129


Interest expense



(5,940)




(4,909)





(14,475)




(19,577)


Other income (expense), net



696




(3,127)





355




(1,580)


Gain associated with claim on long-term contract



-




-





74,578




-


Total other income (expense)



(4,893)




(7,609)





62,816




(20,028)


Income before income tax provision



50,220




45,840





243,732




47,761


Income tax benefit (provision)



(4,154)




15,453





(18,526)




67,063


Net income including noncontrolling interests



46,066




61,293





225,206




114,824


Net income attributable to noncontrolling interests



(4,844)




(4,481)





(10,316)




(8,012)


Net income attributable to Parsons Corporation


$

41,222



$

56,812




$

214,890



$

106,812


Earnings per share:


















     Basic and diluted


$

0.52



$

0.57




$

2.66



$

1.19


 

Weighted average number shares used to compute basic and diluted EPS




Three Months Ended



Nine Months Ended




September 28,
2018



September 30,
2019



September 28,
2018



September 30,
2019


Basic weighted average number of shares outstanding



79,185,527




99,434,877




80,702,032




89,977,493


Dilutive common share equivalents



-




-




-




-


Diluted weighted average number of shares outstanding



79,185,527




99,434,877




80,702,032




89,977,493


 

PARSONS CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share information)

(Unaudited)





December 31,
2018



September 30,
2019


Assets









Current assets:










Cash and cash equivalents (including $73,794 and $55,054 Cash of consolidated joint ventures)


$

280,221



$

133,870



Restricted cash and investments



974




12,592



Accounts receivable, net (including $180,325 and $164,460 Accounts receivable of consolidated joint ventures, net)



623,286




673,674



Contract assets (including $21,270 and $26,542 Contract assets of consolidated joint ventures)



515,319




583,670



Prepaid expenses and other current assets (including $11,837 and $8,149 Prepaid expenses and other current assets of consolidated joint ventures)



69,007




70,455



Total current assets



1,488,807




1,474,261













Property and equipment, net (including $2,561 and $3,171 Property and equipment of consolidated joint ventures, net)



91,849




109,238



Right of use assets, operating leases



-




219,207



Goodwill



736,938




1,050,077



Investments in and advances to unconsolidated joint ventures



63,560




66,584



Intangible assets, net



179,519




281,157



Deferred tax assets



5,680




111,610



Other noncurrent assets



46,225




50,510



Total assets


$

2,612,578



$

3,362,644












Liabilities and Shareholders' Equity (Deficit)









Current liabilities:










Accounts payable (including $87,914 and $90,692 Accounts payable of consolidated joint ventures)


$

226,345



$

226,563



Accrued expenses and other current liabilities (including $73,209 and $63,880 Accrued expenses and other current liabilities of consolidated joint ventures)



559,700




639,650



Contract liabilities (including $38,706 and $43,324 Contract liabilities of consolidated joint ventures)



208,576




231,032



Short-term lease liabilities, operating leases



-




49,074



Income taxes payable



11,540




9,940



Total current liabilities



1,006,161




1,156,259



Long-term employee incentives



41,913




45,749



Deferred gain resulting from sale-leaseback transactions



46,004




-



Long-term debt



429,164




249,306



Long-term lease liabilities, operating leases



-




188,571



Deferred tax liabilities



6,240




7,337



Other long-term liabilities



127,863




120,971



Total liabilities



1,657,345




1,768,193


Commitments and contingencies (Note 13)










Redeemable common stock held by Employee Stock Ownership Plan (ESOP), $1 par value; 78,172,809 and 78,138,602 shares outstanding, recorded at redemption value



1,876,309




2,577,011


Shareholders' equity (deficit):










Common stock, $1 par value; authorized 1,000,000,000 shares; 125,097,684 and 146,393,959 shares issued; 0 and 21,296,275 shares outstanding



-




21,296



Treasury stock, 46,918,140 and 46,959,082 shares at cost



(957,025)




(957,844)



Additional paid-in capital



-




8,772



Retained earnings (accumulated deficit)



12,445




(64,896)



Accumulated other comprehensive loss



(22,957)




(17,982)



Total Parsons Corporation shareholders' equity (deficit)



(967,537)




(1,010,654)



Noncontrolling interests



46,461




28,094



Total shareholders' equity (deficit)



(921,076)




(982,560)



Total liabilities, redeemable common stock and shareholders' equity (deficit)


$

2,612,578



$

3,362,644


 

PARSONS CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)





For the Nine Months Ended





September 28,
2018



September 30,
2019


Cash flows from operating activities:










Net income including noncontrolling interests


$

225,206



$

114,824



Adjustments to reconcile net income to net cash used in operating activities










Depreciation and amortization



46,656




92,692



Amortization of deferred gain



(5,440)




-



Amortization of debt issue costs



548




802



Gain associated with claim on long-term contract



(129,674)




-



Loss on disposal of property and equipment



59




1,045



Provision for doubtful accounts



9,094




(964)



Deferred taxes



1,281




(105,161)



Foreign currency transaction gains and losses



2,007




1,689



Equity in earnings of unconsolidated joint ventures



(25,577)




(29,305)



Return on investments in unconsolidated joint ventures



31,728




32,848



Stock-based compensation



-




9,224



Contributions of treasury stock



34,070




36,779



Changes in assets and liabilities, net of acquisitions and newly consolidated

   joint ventures:










Accounts receivable



384,216




(31,726)



Contract assets



(527,768)




(59,161)



Prepaid expenses and current assets



(13,028)




2,980



Accounts payable



38,424




(6,946)



Accrued expenses and other current liabilities



9,558




40,186



Billings in excess of costs



(151,892)




-



Contract liabilities



168,579




20,703



Provision for contract losses



(13,992)




-



Income taxes



3,250




(3,019)



Other long-term liabilities



12,517




13,138



Net cash provided by operating activities



99,822




130,628


Cash flows from investing activities:










Capital expenditures



(19,436)




(44,030)



Proceeds from sale of property and equipment



112




2,824



Payments for acquisitions, net of cash acquired



(481,163)




(495,690)



Investments in unconsolidated joint ventures



(4,276)




(11,446)



Return of investments in unconsolidated joint ventures



1,126




6,632



Net cash used in investing activities



(503,637)




(541,710)


Cash flows from financing activities:










Proceeds from borrowings



260,000




530,000



Repayments of borrowings



(20,000)




(710,000)



Payments for debt costs and credit agreement



(468)




(286)



Contributions by noncontrolling interests



13,768




8,999



Distributions to noncontrolling interests



(6,858)




(35,378)



Purchase of treasury stock



(73,308)




(819)



IPO proceeds, net



-




536,879



Dividend paid



-




(52,093)



Net cash provided by financing activities



173,134




277,302



Effect of exchange rate changes



(1,233)




(953)



Net decrease in cash, cash equivalents, and restricted cash



(231,914)




(134,733)



Cash, cash equivalents and restricted cash:










Beginning of year



446,144




281,195



End of period


$

214,230



$

146,462


 

Contract Awards (in thousands):




Three months ended




Nine Months Ended




September 28,
2018



September 30,
2019




September 28,
2018



September 30,
2019


Federal Solutions


$

671,615



$

845,559




$

1,624,573



$

2,076,928


Critical Infrastructure



552,034




289,665





1,594,243




1,257,506


Total Awards


$

1,223,649



$

1,135,224




$

3,218,816



$

3,334,434


 

Backlog (in thousands):




September 28,
2018



September 30,
2019


Federal Solutions:









Funded


$

998,863



$

1,214,919


Unfunded



3,838,046




3,946,784


Total Federal Solutions



4,836,909




5,161,703


Critical Infrastructure:









Funded



3,126,316




3,050,525


Unfunded



-




38,286


Total Critical Infrastructure



3,126,316




3,088,811


Total Backlog


$

7,963,225



$

8,250,514


 


Book-To-Bill Ratio:




Three months ended


Nine Months Ended



September 28,
2018


September 30,
2019


September 28,
2018


September 30,
2019

Federal Solutions


1.5


1.7


1.5


1.5

Critical Infrastructure


1.0


0.5


1.0


0.8

Overall


1.3


1.1


1.2


1.1

Non-GAAP Financial Information

The tables under "Parsons Corporation Inc. Reconciliation of Non-GAAP Measures" present Adjusted Operating Income, Adjusted Operating Margin, Earnings before Interest, Taxes, Depreciation, and Amortization ("EBITDA"), Adjusted EBITDA, EBITDA Margin, and Adjusted EBITDA Margin, reconciled to their most directly comparable GAAP measure. These financial measures are calculated and presented on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles ("Non-GAAP Measures"). Parsons has provided these Non-GAAP Measures to adjust for, among other things, the impact of amortization expenses related to our acquisitions of Williams Electric, Polaris Alpha and  OGSystems, initial public offering transaction-related expenses, costs associated with a loss or gain on the disposal or sale of property, plant and equipment, restructuring and related expenses, costs associated with mergers and acquisitions, software implementation costs, legal and settlement costs, and other costs considered to non-operational in nature . These items have been Adjusted because they are not considered core to the Company's business or otherwise not considered operational or because these charges are non-cash or non-recurring. The Company presents these Non-GAAP Measures because management believes that they are meaningful to understanding Parsons's performance during the periods presented and the Company's ongoing business. Non-GAAP Measures are not prepared in accordance with GAAP and therefore are not necessarily comparable to similarly titled metrics or the financial results of other companies. These Non-GAAP Measures should be considered a supplement to, not a substitute for, or superior to, the corresponding financial measures calculated in accordance with GAAP.

PARSONS CORPORATION

Non-GAAP Financial Information

Reconciliation of Net Income to Adjusted EBITDA

(in thousands)




Three Months Ended




Nine Months Ended




September 28,
2018



September 30,
2019




September 28,
2018



September 30,
2019


Net income attributable to Parsons Corporation


$

41,222



$

56,812




$

214,890



$

106,812


Interest expense, net



5,589




4,482





12,117




18,448


Income tax provision (benefit)



4,154




(15,453)





18,526




(67,063)


Depreciation and amortization(a)



23,599




31,027





46,656




92,692


Net income attributable to noncontrolling interests



4,844




4,481





10,316




8,012


Litigation-related gains(b)



-




-





(129,674)




-


Amortization of deferred gain resulting from sale-leaseback transactions(c)



(1,798)




-





(5,440)




-


Equity based compensation



5,049




(1,657)





13,198




45,504


Transaction-related costs(d)



2,456




9,891





7,511




26,961


Restructuring(e)



-




309





-




2,880


Other(f)



3,449




(902)





3,929




2,973


Adjusted EBITDA


$

88,564



$

88,990




$

192,029



$

237,219




(a)

Depreciation and amortization for the three and nine months ended September 28, 2018 is $19.0 million and $32.6 million, respectively in the Federal Solutions Segment and $4.6 million and $14.0 million, respectively in the Critical Infrastructure Segment.  Depreciation and amortization for the three and nine months ended September 30, 2019 is $26.0 million and $75.1 million, respectively in the Federal Solutions Segment and $5.0 million and $17.6 million, respectively in the Critical Infrastructure Segment. 

(b)

Reversal of an accrued liability, with $55.1 million recorded to revenue and $74.6 million recorded to other income ("gain associated with claim on long-term contract") in our results of operations, associated with a lawsuit against a joint venture in which the Company is the managing partner.  Please see "Note 14 ? Commitments and Contingencies" in the Company's Form S-1/A filed on April 29, 2019, for a description of this matter, which was resolved in favor of the Company on June 13, 2018.

(c)

Reflects recognized deferred gains related to sales-leaseback transactions.

(d)

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.

(e)

Reflects costs associated with our corporate restructuring initiatives.

(f)

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)


Three months ended



Nine Months Ended




September 28,
2018



September 30,
2019



September 28,
2018



September 30,
2019


Federal Solutions Adjusted EBITDA attributable to Parsons Corporation


$

45,556



$

50,359



$

101,052



$

126,658


Federal Solutions Adjusted EBITDA attributable to noncontrolling interests



85




86




214




321


Federal Solutions Adjusted EBITDA including noncontrolling interests


$

45,641



$

50,445



$

101,266



$

126,979



















Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation



38,006




33,976




80,296




102,177


Critical Infrastructure Adjusted EBITDA attributable to noncontrolling interests



4,917




4,569




10,467




8,063


Critical Infrastructure Adjusted EBITDA including noncontrolling interests


$

42,923



$

38,545



$

90,763



$

110,240



















Total Adjusted EBITDA including noncontrolling interests


$

88,564



$

88,990



$

192,029



$

237,219


 

PARSONS CORPORATION

Non-GAAP Financial Information

Reconciliation of Net Income Attributable to Parsons Corporation to Adjusted Net Income Attributable to Parsons Corporation

(in thousands, except share and per share data)




Three Months Ended




Nine Months Ended




September 28,
2018



September 30,
2019




September 28,
2018



September 30,
2019


Net income attributable to Parsons Corporation


$

41,222



$

56,812




$

214,890



$

106,812


Deferred Tax Asset Recognition(a)



-




(29,309)





-




(85,672)


Acquisition related intangible asset amortization



14,745




22,143





22,674




64,438


Litigation-related expenses(b)



-




-





(129,674)




-


Amortization of deferred gain resulting from sale-leaseback transactions(c)



(1,798)




-





(5,440)




-


Equity based compensation



5,049




(1,657)





13,198




45,504


Transaction-related costs(d)



2,456




9,891





7,511




26,961


Restructuring(e)



-




309





-




2,880


Other(f)



3,449




(902)





3,929




2,973


Tax effect on adjustments



(294)




(5,025)





1,144




(23,091)


Adjusted net income attributable to Parsons Corporation



64,829




52,262





128,232




140,805


Adjusted earnings per share:


















Weighted-average number of basic/diluted shares outstanding



79,185,527




99,434,877





80,702,032




89,977,493


Adjusted net income attributable to Parsons Corporation per basic/diluted share


$

0.82



$

0.53




$

1.59



$

1.56




(a)

Reflects the reversal of a deferred tax asset as a resulting of the Company converting from and S-Corporation to a C-Corporation.

(b)

Reversal of an accrued liability, with $55.1 million recorded to revenue and $74.6 million recorded to other income ("gain associated with claim on long-term contract") in our results of operations, associated with a lawsuit against a joint venture in which the Company is the managing partner. Please see "Note 14 ? Commitments and Contingencies" in the Company's Form S-1/A filed on April 29, 2019, for a description of this matter, which was resolved in favor of the Company on June 13, 2018.  

(c)

Reflects recognized deferred gains related to sales-leaseback transactions.

(d)

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.

(e)

Reflects costs associated with our corporate restructuring initiatives.

(f)

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 Logo (PRNewsfoto/Parsons Corporation)

 

SOURCE Parsons Corporation


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