Parsons(US:PSN)2019-11-12 12:26Revenue and Growth - Revenue for the nine months ended September 30, 2019, was $2.9 billion, with a 5% growth in Q3 2019[145] - The company's revenue for the three months ended September 30, 2019, was $88,990,000, compared to $88,564,000 for the same period in 2018, reflecting a slight increase[187] - For the nine months ended September 30, 2019, revenue was $237,219,000, up from $192,029,000 in the same period of 2018[187] - Revenue for the three months ended September 30, 2019, was $1,023,277, an increase of $47,120, or 4.8%, compared to $976,157 in the same period last year[194] - Revenue for the nine months ended September 30, 2019, was $2,917,424, an increase of $285,856, or 10.9%, compared to $2,631,568 in the same period last year[194] Contract Awards and Backlog - Total contract awards for the nine months ended September 30, 2019, amounted to $3.3 billion, with Federal Solutions contributing 62% and Critical Infrastructure 38%[145] - Backlog as of September 30, 2019, was $8.3 billion, with $2.8 billion expected to be recognized as revenue in the following twelve months[155] - The book-to-bill ratio for the nine months ended September 30, 2019, was 1.1, indicating that awards generated exceeded revenue recognized[157] - Federal Solutions segment backlog increased from $4.8 billion in September 2018 to $5.2 billion in September 2019[153] - New awards in the Federal Solutions segment for the nine months ended September 30, 2019, were $2.1 billion, up from $1.6 billion in the same period of 2018[150] - The Critical Infrastructure segment saw a decrease in new awards from $1.6 billion in the nine months ended September 30, 2018, to $1.3 billion in the same period of 2019[150] Financial Performance - Adjusted EBITDA for the three months ended September 30, 2019, was $88,990,000, with a net income margin of 6.0% and an adjusted EBITDA margin of 8.7%[187] - Total Adjusted EBITDA for the three months ended September 30, 2019, was $88,990, reflecting a slight increase of $426, or 0.5%, compared to the same period in 2018[192] - Net income attributable to Parsons Corporation for the three months ended September 30, 2019, was 5.6% of revenue, compared to 4.2% in the same period last year[193] - The company recorded a net income attributable to Parsons Corporation of $56,812,000 for the three months ended September 30, 2019, compared to $41,222,000 for the same period in 2018[188] - Adjusted EBITDA for Federal Solutions for the nine months ended September 30, 2019, increased by $25,606,000 (25.3%) to $126,658,000[211] - Adjusted EBITDA for Critical Infrastructure for the nine months ended September 30, 2019, increased by $21,881,000 (27.3%) to $102,177,000[214] Expenses and Costs - Direct costs of contracts for the three months ended September 30, 2019, were $798,552, an increase of $15,534, or 2.0%, compared to $783,018 in the same period last year[196] - Indirect, general and administrative expenses for the three months ended September 30, 2019, were $178,550, an increase of $27,817, or 18.5%, compared to $150,733 in the same period last year[198] - Total ESOP contribution expense for the three months ended September 30, 2019, was $12.3 million, compared to $11.4 million for the same period in 2018[181] - The company expects operating expenses to increase due to anticipated growth and costs associated with being a public company, but expects these costs to decline as a percentage of total revenue over time[181] Tax and Income - The effective income tax rate is expected to increase following the termination of the company's "S" Corporation status, leading to a decrease in net income[170] - Income tax benefit for the three months ended September 30, 2019, was $(15,453,000), a decrease of $19,607,000 (472.0%) compared to the same period in 2018[205] - The company recorded a deferred tax benefit of $85 million during the quarter ended September 30, 2019, reflecting an increase of $29 million from previous estimates[208] Cash Flow and Liquidity - The company believes it has adequate liquidity and capital resources to fund operations and support ongoing acquisition strategies for at least the next twelve months[220] - Cash provided by operating activities has been adequate to fund operations, with management regularly monitoring liquidity measures[219] - Net cash provided by operating activities increased by $30.8 million to $130.6 million for the nine months ended September 30, 2019, compared to $99.8 million for the same period in 2018[225] - Cash, cash equivalents, and restricted cash decreased by $134.7 million to $146.5 million at September 30, 2019, from $281.2 million at December 31, 2018[223] - Accounts receivable decreased from $482.6 million at December 31, 2018 to $318.0 million at September 30, 2019, reflecting a focus on collecting outstanding receivables[222] - Net days sales outstanding (DSO) improved from 67 days at September 28, 2018 to 58 days at September 30, 2019, driven by increased revenue from business acquisitions[225] Acquisitions - The company acquired Polaris Alpha for $489.1 million on May 31, 2018, and OGSystems for $292.4 million on January 7, 2019, enhancing its capabilities in national security and intelligence[165][166] - Net cash used in investing activities decreased by $38.1 million to $541.7 million for the nine months ended September 30, 2019, primarily related to acquisitions of OGSystems and QRC Technologies[227] Interest and Other Income - Interest income for the three months ended September 30, 2019, increased by $76,000 (21.7%) to $427,000, while interest expense decreased by $1,031,000 (17.4%) to $4,909,000[203] - Total other income (expense) for the nine months ended September 30, 2019, was $(82,844,000), a decrease of $62,816,000 (131.9%) compared to the same period in 2018[203] - Equity in earnings of unconsolidated joint ventures decreased by $5,433, or 42.8%, for the three months ended September 30, 2019, compared to the same period last year[197] Segment Performance - Federal Solutions revenue for the three months ended September 30, 2019, increased by $42,450,000 (9.6%) to $486,175,000, with organic revenue growth of $3,200,000[211] - The Federal Solutions segment contributed an increase of $42.5 million in revenue for the three months ended September 30, 2019[194] - The Critical Infrastructure segment saw a revenue increase of $4.7 million for the three months ended September 30, 2019[194] - Critical Infrastructure revenue for the nine months ended September 30, 2019, decreased by $25,503,000 (1.6%) to $1,529,940,000[214]