Parsons Corporation (NYSE: PSN) today announced financial results
for the fourth quarter and fiscal year ended December 31, 2023.
CEO Commentary “We had an
outstanding fourth quarter and full year with record fourth quarter
and annual results for total revenue, organic revenue growth,
adjusted EBITDA, operating cash flow, and contract awards. We also
leveraged our robust balance sheet to continue to execute on our
strategic M&A program,” said Carey Smith, chair, president, and
chief executive officer. “We are operating in six growing and
well-funded markets with a team that is executing at a high level,
and I believe we are making the right organic and inorganic
investments to continue to drive growth and margin expansion into
our business. As a result of our strong performance and confidence
in our current outlook, we are increasing the long-term guidance we
provided at our March 2023 Investor Day.”
Fourth Quarter 2023 Results
Year-over-Year Comparisons (Q4 2023 vs. Q4
2022)
Total revenue for the fourth quarter of 2023
increased by $391 million, or 35%, to $1.5 billion. This increase
was driven by organic growth of 34% and $20 million from
acquisitions. Operating income increased 45% to $77 million
primarily due to organic growth including the ramp-up of recent
contract wins and growth on existing contracts. Net income
increased 60% to $45 million. GAAP diluted earnings per share (EPS)
attributable to Parsons was $0.39 in the fourth quarter of 2023,
compared to $0.25 in the prior year period.
Adjusted EBITDA including noncontrolling interests
for the fourth quarter of 2023 was $128 million, a 30% increase
over the prior year period. The adjusted EBITDA increase was driven
primarily by accretive organic growth on recent contract wins, as
well as growth on existing contracts. Adjusted EBITDA margin was
8.6% in the fourth quarter of 2023, compared to 8.9% in the fourth
quarter of 2022. The year-over-year margin decrease was primarily
driven by a net $20 million headwind from adjustments on two
separate programs. Adjusted EPS was $0.69 in the fourth quarter of
2023, compared to $0.51 in the fourth quarter of 2022.
Fiscal Year 2023 Results
Fiscal Year Comparison (fiscal year 2023
vs. fiscal year 2022)
Total revenue for the year ended December 31, 2023
increased by $1.2 billion, or 30%, to $5.4 billion. This increase
was primarily driven by organic growth of 23% driven by the ramp-up
of recent contract wins and growth on existing contracts.
Acquisitions contributed approximately $274 million of revenue in
fiscal year 2023. Operating income increased 55% to $288 million
primarily due accretive acquisitions, and increased volume on new
and existing contracts, while continuing to closely monitor and
manage costs. Net income increased to $161 million. Diluted
earnings per share (EPS) attributable to Parsons was $1.42,
compared to $0.87 in the prior year period.
Adjusted EBITDA including noncontrolling interests
for the year ended December 31, 2023 was $465 million, a 32%
increase over the prior year period. Adjusted EBITDA margin was
8.5% for the year ended December 31, 2023, compared to 8.4% in the
prior year period. Adjusted diluted EPS was $2.43 for the year
ended December 31, 2023, compared to $1.81 for the year ended
December 31, 2022. The year-over-year adjusted EBITDA and adjusted
EPS increases were driven primarily by the operating income
increases noted above, as well as a lower effective tax rate for
adjusted EPS.
Segment Results
Federal Solutions Segment
Federal Solutions Quarter-over-Quarter
Comparisons (Q4 2023 vs. Q4 2022)
|
|
Three Months Ended |
|
|
Growth |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
Dollars/Percent |
|
|
Percent |
|
Revenue |
|
$ |
843,244 |
|
|
$ |
563,386 |
|
|
$ |
279,858 |
|
|
|
50 |
% |
Adjusted EBITDA |
|
$ |
82,485 |
|
|
$ |
47,805 |
|
|
$ |
34,680 |
|
|
|
73 |
% |
Adjusted EBITDA margin |
|
|
9.8 |
% |
|
|
8.5 |
% |
|
|
1.3 |
% |
|
|
15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth quarter 2023 Federal Solutions revenue
increased by $280 million, or 50%, to $843 million. This increase
was driven by organic growth of 47% and the contribution from our
SealingTech acquisition, which closed in August of 2023. Organic
growth was driven primarily by the ramp-up of recent contract wins
and growth on existing contracts.
Federal Solutions adjusted EBITDA including
noncontrolling interests increased by $35 million, or 73%, to $82
million. Adjusted EBITDA margin increased 130 basis points to 9.8%.
These increases were driven primarily by increased volume on new
and existing contracts, while controlling costs.
Federal Solutions Fiscal Year Comparison
(fiscal year 2023 vs. fiscal year 2022)
|
|
The Year Ended |
|
|
Growth |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
Dollars/Percent |
|
|
Percent |
|
Revenue |
|
$ |
3,020,701 |
|
|
$ |
2,212,987 |
|
|
$ |
807,714 |
|
|
|
36 |
% |
Adjusted EBITDA |
|
$ |
289,571 |
|
|
$ |
199,365 |
|
|
$ |
90,206 |
|
|
|
45 |
% |
Adjusted EBITDA margin |
|
|
9.6 |
% |
|
|
9.0 |
% |
|
|
0.6 |
% |
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Solutions revenue for the year ended
December 31, 2023 increased $808 million, or 36%, to $3.0 billion.
This increase was driven by organic growth of 25% and approximately
$264 million from acquisitions. Organic growth was driven by the
ramp-up of recent contract wins and growth on existing
contracts.
Federal Solutions adjusted EBITDA including
noncontrolling interests for the year ended December 31, 2023
increased by $90 million, or 45%, to $290 million. Adjusted EBITDA
margin increased 60 basis points from 9.0% to 9.6%. These increases
were driven primarily by organic operating leverage, accretive
acquisitions, and $20 million dollars of non-recurring incentive
fees recognized in the second quarter of 2023.
Critical Infrastructure
Segment
Critical Infrastructure
Quarter-over-Quarter Comparisons (Q4 2023 vs. Q4 2022)
|
|
Three Months Ended |
|
|
Growth |
|
|
|
December 31,2023 |
|
|
December 31, 2022 |
|
|
Dollars/Percent |
|
|
Percent |
|
Revenue |
|
$ |
650,982 |
|
|
$ |
539,726 |
|
|
$ |
111,256 |
|
|
|
21 |
% |
Adjusted EBITDA |
|
$ |
45,658 |
|
|
$ |
50,628 |
|
|
$ |
(4,970 |
) |
|
|
-10 |
% |
Adjusted EBITDA margin |
|
|
7.0 |
% |
|
|
9.4 |
% |
|
|
-2.4 |
% |
|
|
-26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth quarter 2023 Critical Infrastructure
revenue increased by $111 million, or 21%, to $651 million. This
increase was driven by organic growth of 20% and the inorganic
revenue contribution from acquisitions. Organic growth was driven
by higher volume in both the Middle East and North America.
Critical Infrastructure adjusted EBITDA including
noncontrolling interests decreased by $5 million, or 10%, to $46
million from the fourth quarter of 2022. Adjusted EBITDA margin
decreased to 240 basis points to 7.0%. The adjusted EBITDA
decreases were driven by a net $20 million negative impact from
adjustments on two separate programs, partially offset by profits
from accretive organic growth on both new and existing
contracts.
Critical Infrastructure Fiscal Year
Comparison (fiscal year 2023 vs. fiscal year 2022)
|
|
The Year Ended |
|
|
Growth |
|
|
|
December 31,2023 |
|
|
December 31,2022 |
|
|
Dollars/Percent |
|
|
Percent |
|
Revenue |
|
$ |
2,422,048 |
|
|
$ |
1,982,285 |
|
|
$ |
439,763 |
|
|
|
22 |
% |
Adjusted EBITDA |
|
$ |
175,102 |
|
|
$ |
153,417 |
|
|
$ |
21,685 |
|
|
|
14 |
% |
Adjusted EBITDA margin |
|
|
7.2 |
% |
|
|
7.7 |
% |
|
|
-0.5 |
% |
|
|
-6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Critical Infrastructure revenue for the year ended
December 31, 2023 increased by $440 million or 22%, to $2.4 billion
almost all of which was organic growth. Organic growth was driven
by higher volume in both the Middle East and North America.
Critical Infrastructure adjusted EBITDA including
noncontrolling interests for the year ended December 31, 2023
increased by $22 million, or 14%, to $175 million. Adjusted EBITDA
margin decreased 50 basis points to 7.2%. The adjusted EBITDA
increase was driven primarily by accretive organic growth and
operating leverage. Margins were impacted by the net $20 million
negative impact from the two programs noted above.
Fourth Quarter 2023 Key Performance
Indicators
- Book-to-bill ratio: 0.8x on net bookings of $1.2 billion.
- Book-to-bill ratio (trailing twelve-months): 1.1x on net
bookings of $6.0 billion.
- Total backlog: $8.6 billion, up 5% from Q4 2022.
- Cash flow from operating activities: Fourth quarter 2023: $190
million compared to $89 million in the fourth quarter of 2022. For
the twelve months ended December 31, 2023, cash flow from operating
activities increased 72% to $408 million, compared to $238 million
in the prior year period.
Significant Contract Wins
Parsons continues to win large strategic contracts
in both the Federal Solutions and Critical Infrastructure segments.
During the fourth quarter of 2023, the company won two single award
contracts worth more than $100 million each, bringing the company’s
total to 15 contract wins worth more than $100 million for the full
year, a company record. After the fourth quarter of 2023 ended, the
company won two additional $100 million contracts.
- Awarded a single-award classified contract for continued work
in support of the U.S. Government, valued at over $250 million.
This award represents a critical task that the corporation and its
acquired companies have been performing for over a decade and has a
base period of one year with four one-year option periods. The
company booked $50 million on this contract in the fourth
quarter.
- Awarded a new $150 million single-award contract to serve as
lead designer on a major infrastructure replacement project in the
northeast United States. The company plans to book the full value
of the contract in Q1 2024.
- Awarded a new $80 million contract to provide remediation of
lead contaminated soil for a U.S. customer. The company booked $73
million on this contract in the fourth quarter.
- Awarded prime positions on two multiple award
indefinite-delivery, indefinite-quantity contracts. The first one
is a U.S. Army Corps of Engineers Kansas City District contract
with a value of $245 million. The contract for environmental
remediation activities has a five-year basic ordering period and
represents new work for the company. The contract consists of
funding from the Infrastructure Investment and Jobs Act related to
Environmental Protection Agency projects. The second one is a
General Services Administration Public Building Service contract
with an estimated value of $200 million for program management and
construction management (PM/CM) services. The contract for PM/CM
activities has a five-year ordering period and represents new work
for the company.
- After the fourth quarter of 2023 ended, the company was
selected by the United States Department of Labor Job Corps
Acquisition Services to assist with planning, management, and
oversight of the Job Corps Facilities Program. Parsons is the sole
awardee on the over $115 million ceiling value contract, which
includes a base performance period of one year and four one-year
option periods. This award continues a contract that the company
has held since 2013.
- After the fourth quarter of 2023 ended, the company was awarded
a new $87 million contract to provide project management services
for a major tourism and entertainment development in the Middle
East.
Additional Corporate
Highlights
Parsons continues its 80 year history of
cultivating a responsible enterprise. During the quarter, Parsons
received two different awards for being a top employer for
diversity and military veterans. These awards complement other
recognitions the company received during 2023 including being named
as one of the World’s Most Ethical Companies by Ethisphere for the
14th consecutive year, one of the World’s best companies by Time
Magazine, and one of the best employers for Diversity by
Forbes. Parsons was also recognized by other institutions for
its STEM and veteran employment practices and for the work it
performs in destroying chemical weapons.
- During Q4 2023, the company announced and closed the
acquisition of I.S. Engineers for $12.2 million. This acquisition
transaction is consistent with the Parsons' strategy of completing
accretive acquisitions of companies with revenue growth and
adjusted EBITDA margins exceeding 10%, while adding critical
infrastructure talent and bolstering the company’s portfolio in
large and growing states. Texas is poised to receive nearly $30
billion in total transportation funding from the Infrastructure
Investment and Jobs Act between 2022 and 2026.
- During the quarter, Parsons completed a comprehensive
assessment, investigation, and treatment of per- and
polyfluoroalkyl substances (PFAS) for a major Fortune 100
industrial client. Completing this project from investigation to
treatment – without causing downtime for the facility – is a
testament to the innovation, creativity, and expertise of Parsons'
multidisciplinary PFAS team, and helps the company continue
delivering a better world. The Parsons Water Treatability Lab in
Syracuse, New York has been a leader of water treatment innovation
for more than 30 years.
- Recognized with the highest achievable score of 100 by the
Human Rights Campaign Foundation on their 2023 – 2024 Corporate
Equality Index for active support and inclusion of the lesbian,
gay, bisexual, transgender, queer (LGBTQ+) community. The company
has been recognized as a leader in LGBTQ+ rights by the Human
Rights Campaign since 2019.
- Recognized as a top Best for Vets company by Military Times.
This sought-after distinction recognizes organizations for their
programs and policies that support veterans’ post-military
careers.
Fiscal Year 2024 Guidance
The table below summarizes the company's fiscal
year 2024 guidance.
|
Fiscal Year 2024 Guidance |
Revenue |
$5.8 billion - $6.0 billion |
Adjusted EBITDA including non-controlling interest |
$505 million - $545 million |
Cash Flow from Operating Activities |
$350 million - $410 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
the impact of M&A, will preclude the company from providing,
with reasonable certainty, net income guidance for fiscal year
2024.
Increased Investor Day Growth
Targets
The table below summarizes the company's increased
March 15, 2023, Investor Day guidance.
|
Current 2025Trajectory |
March 2023Investor Day
Guidance |
Highlights |
Organic Revenue Growth |
Mid- single-digit organic growth or better |
3% - 5% |
Growth is off a revenue base that is $1.2 billion higher than the
figures presented in March 2023 |
Total Revenue Growth |
Mid- single-digit organic growth or better + M&A |
4% - 6% |
Growth is off a revenue base that is $1.2 billion higher than the
figures presented in March 2023 |
Adjusted EBITDA Margin Expansion |
Average 20 - 30 bpsper year |
Average 20 - 30 bpsper year |
Continual margin improvement opportunity. Adjusted EBITDA expansion
also off a higher revenue base |
Free Cash Flow Conversion |
>100% |
>100% |
Robust free cash flow generation to fund future organic and
inorganic investment opportunities |
Capital deployment priorities: M&A and share repurchases to
increase shareholder value |
|
Conference Call Information
Parsons will host a conference call today,
February 14, 2024, at 8:00 a.m. ET to discuss the financial results
for its fourth quarter and fiscal year 2023.
Access to a webcast of the live conference call
can be obtained through the Investor Relations section of the
company's website (https://investors.parsons.com). Those parties
interested in participating via telephone may register on the
Investor Relations website or by clicking here.
A replay will be available on the company's
website approximately two hours after the conference call and
continuing for one year.
About Parsons Corporation
Parsons (NYSE: PSN) is a leading disruptive
technology provider in the national security and global
infrastructure markets, with capabilities across cyber and
intelligence, space and missile defense, transportation,
environmental remediation, urban development, and critical
infrastructure protection. 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, 2023, on Form 10-K, filed on February 14, 2024, 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.
Media: |
Investor
Relations: |
Bryce
McDevitt |
Dave
Spille |
Parsons
Corporation |
Parsons
Corporation |
(703)
851-4425 |
(571)
655-8264 |
Bryce.McDevitt@Parsons.com |
Dave.Spille@Parsons.com |
|
PARSONS
CORPORATION CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share data)
(Unaudited) |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Revenue |
|
$ |
1,494,226 |
|
|
$ |
1,103,112 |
|
|
$ |
5,442,749 |
|
|
$ |
4,195,272 |
|
Direct cost of contracts |
|
|
1,127,022 |
|
|
|
860,455 |
|
|
|
4,236,735 |
|
|
|
3,248,550 |
|
Equity in (losses) earnings of unconsolidated joint ventures |
|
|
(52,248 |
) |
|
|
6,110 |
|
|
|
(47,751 |
) |
|
|
16,347 |
|
Selling, general and administrative expenses |
|
|
237,512 |
|
|
|
195,434 |
|
|
|
869,905 |
|
|
|
777,403 |
|
Operating income |
|
|
77,444 |
|
|
|
53,333 |
|
|
|
288,358 |
|
|
|
185,666 |
|
Interest income |
|
|
600 |
|
|
|
348 |
|
|
|
2,191 |
|
|
|
966 |
|
Interest expense |
|
|
(9,128 |
) |
|
|
(8,399 |
) |
|
|
(31,497 |
) |
|
|
(23,185 |
) |
Other income (expense), net |
|
|
3,335 |
|
|
|
3,079 |
|
|
|
5,001 |
|
|
|
2,775 |
|
Total other income (expense) |
|
|
(5,193 |
) |
|
|
(4,972 |
) |
|
|
(24,305 |
) |
|
|
(19,444 |
) |
Income before income tax expense |
|
|
72,251 |
|
|
|
48,361 |
|
|
|
264,053 |
|
|
|
166,222 |
|
Income tax expense |
|
|
(14,194 |
) |
|
|
(12,014 |
) |
|
|
(56,138 |
) |
|
|
(39,657 |
) |
Net income including noncontrolling interests |
|
|
58,057 |
|
|
|
36,347 |
|
|
|
207,915 |
|
|
|
126,565 |
|
Net income attributable to noncontrolling interests |
|
|
(13,149 |
) |
|
|
(8,216 |
) |
|
|
(46,766 |
) |
|
|
(29,901 |
) |
Net income attributable to Parsons Corporation |
|
$ |
44,908 |
|
|
$ |
28,131 |
|
|
$ |
161,149 |
|
|
$ |
96,664 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.43 |
|
|
$ |
0.27 |
|
|
$ |
1.53 |
|
|
$ |
0.93 |
|
Diluted |
|
$ |
0.39 |
|
|
$ |
0.25 |
|
|
$ |
1.42 |
|
|
$ |
0.87 |
|
|
Weighted
average number shares used to compute basic and diluted
EPS (In thousands) (Unaudited) |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Basic weighted average number of shares outstanding |
|
|
105,285 |
|
|
|
103,980 |
|
|
|
104,992 |
|
|
|
103,758 |
|
Stock-based awards |
|
|
1,395 |
|
|
|
1,056 |
|
|
|
1,173 |
|
|
|
808 |
|
Convertible senior notes |
|
|
8,917 |
|
|
|
8,917 |
|
|
|
8,917 |
|
|
|
8,917 |
|
Diluted weighted average number of shares outstanding |
|
|
115,597 |
|
|
|
113,953 |
|
|
|
115,082 |
|
|
|
113,483 |
|
|
Net income
available to shareholders used to compute diluted EPS as a result
of adopting the if-converted method in connection with the
Convertible Senior Notes (In thousands) (Unaudited) |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Net income attributable to Parsons Corporation |
|
$ |
44,908 |
|
|
$ |
28,131 |
|
|
|
161,149 |
|
|
|
96,664 |
|
Convertible senior notes if-converted method interest
adjustment |
|
|
626 |
|
|
|
548 |
|
|
|
2,291 |
|
|
|
2,176 |
|
Diluted net income attributable to Parsons Corporation |
|
$ |
45,534 |
|
|
$ |
28,679 |
|
|
|
163,440 |
|
|
|
98,840 |
|
|
PARSONS CORPORATION CONSOLIDATED BALANCE
SHEETS (In thousands, except share information) |
|
|
|
December 31,
2023 |
|
|
December
31,2022 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents (including $128,761 and $53,193 Cash of
consolidated joint ventures) |
|
$ |
272,943 |
|
|
$ |
262,539 |
|
Accounts receivable, net (including $274,846 and $217,419 Accounts
receivable of consolidated joint ventures, net) |
|
|
915,638 |
|
|
|
717,345 |
|
Contract assets (including $11,096 and $11,313 Contract assets of
consolidated joint ventures) |
|
|
757,515 |
|
|
|
634,033 |
|
Prepaid expenses and other current assets (including $11,929 and
$7,913 Prepaid expenses and other current assets of consolidated
joint ventures) |
|
|
191,430 |
|
|
|
105,866 |
|
Total current assets |
|
|
2,137,526 |
|
|
|
1,719,783 |
|
|
|
|
|
|
|
|
Property and equipment, net (including $3,274 and $2,543 Property
and equipment of consolidated joint ventures, net) |
|
|
98,957 |
|
|
|
96,050 |
|
Right of use assets, operating leases (including $9,885 and $6,315
Right of use assets, operating leases of consolidated joint
ventures) |
|
|
159,211 |
|
|
|
155,090 |
|
Goodwill |
|
|
1,792,665 |
|
|
|
1,661,850 |
|
Investments in and advances to unconsolidated joint ventures |
|
|
128,204 |
|
|
|
107,425 |
|
Intangible assets, net |
|
|
275,566 |
|
|
|
254,127 |
|
Deferred tax assets |
|
|
140,162 |
|
|
|
137,709 |
|
Other noncurrent assets |
|
|
71,770 |
|
|
|
66,108 |
|
Total assets |
|
$ |
4,804,061 |
|
|
$ |
4,198,142 |
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable (including $49,234 and $49,078 Accounts payable of
consolidated joint ventures) |
|
$ |
242,821 |
|
|
$ |
201,428 |
|
Accrued expenses and other current liabilities (including $145,040
and $102,417 Accrued expenses and other current liabilities of
consolidated joint ventures) |
|
|
801,423 |
|
|
|
630,193 |
|
Contract liabilities (including $61,234 and $40,654 Contract
liabilities of consolidated joint ventures) |
|
|
301,107 |
|
|
|
213,064 |
|
Short-term lease liabilities, operating leases (including $4,753
and $2,552 Short-term lease liabilities, operating leases of
consolidated joint ventures) |
|
|
58,556 |
|
|
|
59,144 |
|
Income taxes payable |
|
|
6,977 |
|
|
|
4,290 |
|
Total current liabilities |
|
|
1,410,884 |
|
|
|
1,108,119 |
|
|
|
|
|
|
|
|
Long-term employee incentives |
|
|
22,924 |
|
|
|
17,375 |
|
Long-term debt |
|
|
745,963 |
|
|
|
743,605 |
|
Long-term lease liabilities, operating leases (including $5,132 and
$3,763 Long-term lease liabilities, operating leases of
consolidated joint ventures) |
|
|
117,505 |
|
|
|
111,417 |
|
Deferred tax liabilities |
|
|
9,775 |
|
|
|
12,471 |
|
Other long-term liabilities |
|
|
120,295 |
|
|
|
109,220 |
|
Total liabilities |
|
|
2,427,346 |
|
|
|
2,102,207 |
|
Contingencies (Note 14) |
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
Common stock, $1 par value; authorized 1,000,000,000 shares;
146,341,363 and 146,132,016 shares issued; 45,960,122 and
40,960,845 public shares outstanding; 59,879,857 and 63,742,151
ESOP shares outstanding |
|
|
146,341 |
|
|
|
146,132 |
|
Treasury stock, 40,501,385 shares at cost |
|
|
(827,311 |
) |
|
|
(844,936 |
) |
Additional paid-in capital |
|
|
2,779,365 |
|
|
|
2,717,134 |
|
Retained earnings |
|
|
203,724 |
|
|
|
43,089 |
|
Accumulated other comprehensive loss |
|
|
(14,908 |
) |
|
|
(17,849 |
) |
Total Parsons Corporation shareholders' equity |
|
|
2,287,211 |
|
|
|
2,043,570 |
|
Noncontrolling interests |
|
|
89,504 |
|
|
|
52,365 |
|
Total shareholders' equity |
|
|
2,376,715 |
|
|
|
2,095,935 |
|
Total liabilities and shareholders' equity |
|
|
4,804,061 |
|
|
|
4,198,142 |
|
|
PARSONS CORPORATION CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands) |
|
|
|
For the Twelve Months Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net income including noncontrolling interests |
|
$ |
207,915 |
|
|
$ |
126,565 |
|
Adjustments to reconcile net income to net cash used in operating
activities |
|
|
|
|
|
|
Depreciation and amortization |
|
|
119,973 |
|
|
|
120,501 |
|
Amortization of debt issue costs |
|
|
2,842 |
|
|
|
3,029 |
|
Loss (gain) on disposal of property and equipment |
|
|
206 |
|
|
|
(164 |
) |
Provision for doubtful accounts |
|
|
32 |
|
|
|
57 |
|
Deferred taxes |
|
|
(8,914 |
) |
|
|
(844 |
) |
Foreign currency transaction gains and losses |
|
|
(330 |
) |
|
|
1,973 |
|
Equity in losses (earnings) of unconsolidated joint ventures |
|
|
47,751 |
|
|
|
(16,347 |
) |
Return on investments in unconsolidated joint ventures |
|
|
48,970 |
|
|
|
28,417 |
|
Stock-based compensation |
|
|
34,365 |
|
|
|
23,008 |
|
Contributions of treasury stock |
|
|
58,172 |
|
|
|
54,659 |
|
Changes in assets and liabilities, net of acquisitions and newly
consolidated joint ventures: |
|
|
|
|
|
|
Accounts receivable |
|
|
(176,181 |
) |
|
|
(117,318 |
) |
Contract assets |
|
|
(119,898 |
) |
|
|
(32,032 |
) |
Prepaid expenses and other assets |
|
|
(95,415 |
) |
|
|
(1,405 |
) |
Accounts payable |
|
|
24,497 |
|
|
|
(717 |
) |
Accrued expenses and other current liabilities |
|
|
163,440 |
|
|
|
3,879 |
|
Contract liabilities |
|
|
84,439 |
|
|
|
41,306 |
|
Income taxes |
|
|
2,886 |
|
|
|
(3,649 |
) |
Other long-term liabilities |
|
|
12,949 |
|
|
|
6,608 |
|
Net cash provided by operating activities |
|
|
407,699 |
|
|
|
237,526 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
Capital expenditures |
|
|
(40,396 |
) |
|
|
(30,593 |
) |
Proceeds from sale of property and equipment |
|
|
546 |
|
|
|
771 |
|
Payments for acquisitions, net of cash acquired |
|
|
(221,937 |
) |
|
|
(379,467 |
) |
Investments in unconsolidated joint ventures |
|
|
(119,582 |
) |
|
|
(17,622 |
) |
Return of investments in unconsolidated joint ventures |
|
|
5,018 |
|
|
|
9,443 |
|
Proceeds from sales of investments in unconsolidated joint
ventures |
|
|
381 |
|
|
|
- |
|
Net cash used in investing activities |
|
|
(375,970 |
) |
|
|
(417,468 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds from borrowings |
|
|
620,900 |
|
|
|
969,700 |
|
Proceeds from delayed draw term loan |
|
|
- |
|
|
|
350,000 |
|
Repayments of borrowings |
|
|
(620,900 |
) |
|
|
(969,700 |
) |
Repayment of private placement debt |
|
|
- |
|
|
|
(200,000 |
) |
Payments for debt costs and credit agreement |
|
|
- |
|
|
|
(862 |
) |
Payments for acquired warrants |
|
|
- |
|
|
|
(11,243 |
) |
Contributions by noncontrolling interests |
|
|
2,867 |
|
|
|
10,266 |
|
Distributions to noncontrolling interests |
|
|
(12,496 |
) |
|
|
(24,128 |
) |
Repurchases of common stock |
|
|
(11,000 |
) |
|
|
(22,000 |
) |
Taxes paid on vested stock |
|
|
(7,301 |
) |
|
|
(7,042 |
) |
Proceeds from issuance of common stock |
|
|
6,059 |
|
|
|
5,377 |
|
Net cash (used in) provided by financing activities |
|
|
(21,871 |
) |
|
|
100,368 |
|
Effect of exchange rate changes |
|
|
546 |
|
|
|
(1,770 |
) |
Net decrease in cash, cash equivalents, and restricted cash |
|
|
10,404 |
|
|
|
(81,344 |
) |
Cash, cash equivalents and restricted cash: |
|
|
|
|
|
|
Beginning of year |
|
|
262,539 |
|
|
|
343,883 |
|
End of period |
|
$ |
272,943 |
|
|
$ |
262,539 |
|
|
Contract
Awards (in thousands) |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Federal Solutions |
|
$ |
616,750 |
|
|
$ |
386,082 |
|
|
$ |
3,259,052 |
|
|
$ |
1,921,123 |
|
Critical Infrastructure |
|
|
631,710 |
|
|
|
721,616 |
|
|
|
2,737,728 |
|
|
|
2,353,598 |
|
Total Awards |
|
$ |
1,248,460 |
|
|
$ |
1,107,698 |
|
|
$ |
5,996,780 |
|
|
$ |
4,274,721 |
|
|
Backlog (in thousands) |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Federal Solutions: |
|
|
|
|
|
|
Funded |
|
$ |
1,454,581 |
|
|
$ |
1,257,537 |
|
Unfunded |
|
|
3,490,781 |
|
|
|
3,586,791 |
|
Total Federal Solutions |
|
|
4,945,362 |
|
|
|
4,844,328 |
|
Critical Infrastructure: |
|
|
|
|
|
|
Funded |
|
|
3,578,902 |
|
|
|
3,280,701 |
|
Unfunded |
|
|
68,007 |
|
|
|
54,216 |
|
Total Critical Infrastructure |
|
|
3,646,909 |
|
|
|
3,334,917 |
|
Total Backlog |
|
$ |
8,592,271 |
|
|
$ |
8,179,245 |
|
|
Book-To-Bill
Ratio1: |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Federal Solutions |
|
|
0.7 |
|
|
|
0.7 |
|
|
|
1.1 |
|
|
|
0.9 |
|
Critical Infrastructure |
|
|
1.0 |
|
|
|
1.3 |
|
|
|
1.1 |
|
|
|
1.2 |
|
Overall |
|
|
0.8 |
|
|
|
1.0 |
|
|
|
1.1 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Information
The tables under "Parsons Corporation Inc. Reconciliation of
Non-GAAP Measures" present Adjusted Net Income attributable to
Parsons Corporation, Adjusted Earnings per Share, 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, 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
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.
________________1 Book-to-Bill ratio is calculated
as total contract awards divided by total revenue for the
period.
|
PARSONS
CORPORATION Non-GAAP Financial
Information Reconciliation of Net Income to
Adjusted EBITDA (in thousands) |
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Net income attributable to Parsons Corporation |
|
$ |
44,908 |
|
|
$ |
28,131 |
|
|
$ |
161,149 |
|
|
$ |
96,664 |
|
Interest expense, net |
|
|
8,528 |
|
|
|
8,051 |
|
|
|
29,306 |
|
|
|
22,219 |
|
Income tax provision (benefit) |
|
|
14,194 |
|
|
|
12,014 |
|
|
|
56,138 |
|
|
|
39,657 |
|
Depreciation and amortization (a) |
|
|
32,771 |
|
|
|
29,833 |
|
|
|
119,973 |
|
|
|
120,501 |
|
Net income attributable to noncontrolling interests |
|
|
13,149 |
|
|
|
8,216 |
|
|
|
46,766 |
|
|
|
29,901 |
|
Equity-based compensation |
|
|
11,059 |
|
|
|
8,540 |
|
|
|
36,151 |
|
|
|
24,354 |
|
Transaction-related costs (b) |
|
|
2,985 |
|
|
|
1,784 |
|
|
|
12,013 |
|
|
|
16,270 |
|
Restructuring (c) |
|
|
698 |
|
|
|
- |
|
|
|
1,244 |
|
|
|
213 |
|
Other (d) |
|
|
(149 |
) |
|
|
1,864 |
|
|
|
1,933 |
|
|
|
3,003 |
|
Adjusted EBITDA |
|
$ |
128,143 |
|
|
$ |
98,433 |
|
|
$ |
464,673 |
|
|
$ |
352,782 |
|
(a) Depreciation and amortization for the
three and twelve months ended December 31, 2023, is $27.8 million
and $101.2 million, respectively, in the Federal Solutions Segment
and $4.9 million and $18.7 million, respectively, in the Critical
Infrastructure Segment. Depreciation and amortization for the three
and twelve months ended December 31, 2022, is $25.5 million and
$102.9 million, respectively, in the Federal Solutions Segment and
$4.3 million and $17.6 million, respectively, in the Critical
Infrastructure Segment.
(b) Reflects costs incurred in connection
with acquisitions and other non-recurring transaction costs,
primarily fees paid for professional services and employee
retention.
(c) Reflects costs associated with and
related to our corporate restructuring initiatives.
(d) 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 |
|
|
Twelve Months Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Federal Solutions Adjusted EBITDA attributable to Parsons
Corporation |
|
$ |
82,423 |
|
|
$ |
47,717 |
|
|
$ |
289,250 |
|
|
$ |
199,004 |
|
Federal Solutions Adjusted EBITDA attributable to noncontrolling
interests |
|
|
62 |
|
|
|
88 |
|
|
|
321 |
|
|
|
361 |
|
Federal Solutions Adjusted EBITDA including noncontrolling
interests |
|
$ |
82,485 |
|
|
$ |
47,805 |
|
|
$ |
289,571 |
|
|
$ |
199,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Critical Infrastructure Adjusted EBITDA attributable to Parsons
Corporation |
|
|
32,304 |
|
|
|
42,365 |
|
|
|
127,785 |
|
|
|
123,385 |
|
Critical Infrastructure Adjusted EBITDA attributable to
noncontrolling interests |
|
|
13,354 |
|
|
|
8,263 |
|
|
|
47,317 |
|
|
|
30,032 |
|
Critical Infrastructure Adjusted EBITDA including noncontrolling
interests |
|
$ |
45,658 |
|
|
$ |
50,628 |
|
|
$ |
175,102 |
|
|
$ |
153,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjusted EBITDA including noncontrolling interests |
|
$ |
128,143 |
|
|
$ |
98,433 |
|
|
$ |
464,673 |
|
|
$ |
352,782 |
|
|
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, 2023 |
|
|
December 31, 2022 |
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
Net income attributable to Parsons Corporation |
|
$ |
44,908 |
|
|
$ |
28,131 |
|
|
$ |
161,149 |
|
|
$ |
96,664 |
|
Acquisition related intangible asset amortization |
|
|
21,632 |
|
|
|
19,314 |
|
|
|
76,558 |
|
|
|
78,189 |
|
Equity-based compensation |
|
|
11,059 |
|
|
|
8,540 |
|
|
|
36,151 |
|
|
|
24,354 |
|
Transaction-related costs (a) |
|
|
2,985 |
|
|
|
1,784 |
|
|
|
12,013 |
|
|
|
16,270 |
|
Restructuring (b) |
|
|
698 |
|
|
|
- |
|
|
|
1,244 |
|
|
|
213 |
|
Other (c) |
|
|
(149 |
) |
|
|
1,864 |
|
|
|
1,933 |
|
|
|
3,003 |
|
Tax effect on adjustments |
|
|
(7,600 |
) |
|
|
(5,565 |
) |
|
|
(30,558 |
) |
|
|
(29,452 |
) |
Adjusted net income attributable to Parsons Corporation |
|
|
73,533 |
|
|
|
54,068 |
|
|
|
258,490 |
|
|
|
189,241 |
|
Adjusted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of basic shares outstanding |
|
|
105,285 |
|
|
|
103,980 |
|
|
|
104,992 |
|
|
|
103,758 |
|
Weighted-average number of diluted shares outstanding (d) |
|
|
106,680 |
|
|
|
105,036 |
|
|
|
106,165 |
|
|
|
104,566 |
|
Adjusted net income attributable to Parsons Corporation per basic
share |
|
$ |
0.70 |
|
|
$ |
0.52 |
|
|
$ |
2.46 |
|
|
$ |
1.82 |
|
Adjusted net income attributable to Parsons Corporation per diluted
share |
|
$ |
0.69 |
|
|
$ |
0.51 |
|
|
$ |
2.43 |
|
|
$ |
1.81 |
|
(a) Reflects costs incurred in connection
with acquisitions and other non-recurring transaction costs,
primarily fees paid for professional services and employee
retention.
(b) Reflects costs associated with and
related to our corporate restructuring initiatives.
(c) 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.
(d) Excludes dilutive effect of convertible
senior notes due to bond hedge.
|
PARSONS
CORPORATION Critical Infrastructure
Historical Quarterly Revenue by New Business
Unit |
|
(U.S. dollars in thousands) |
|
December 31, 2023 |
|
|
September 30, 2023 |
|
|
June 30, 2023 |
|
|
March 31, 2023 |
|
Infrastructure – North America |
|
$ |
390,604 |
|
|
$ |
389,452 |
|
|
$ |
373,153 |
|
|
$ |
319,559 |
|
Infrastructure – Europe, Middle East and Africa |
|
|
260,378 |
|
|
|
249,005 |
|
|
|
220,536 |
|
|
|
219,361 |
|
Critical Infrastructure |
|
$ |
650,982 |
|
|
$ |
638,457 |
|
|
$ |
593,689 |
|
|
$ |
538,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective October 1, 2023, the Company reorganized
its Critical Infrastructure business units from Mobility Solutions
and Connected Communities to Infrastructure – North America and
Infrastructure – Europe, Middle East and Africa. The table above
reflects the revenue by quarter as if the business unit change had
been made on January 1, 2023.
Parsons (NYSE:PSN)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
Parsons (NYSE:PSN)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024