Parsons further lifts curtain on its latest acquisition

Parsons Corp. recent acquisition sheds more light on the certainties it sees in the market amid a whole lot of uncertainty including a presidential election outcome that is TBD.

Parsons Corp.'s recent acquisition sheds shed more light on certainties the sees in the market amid a whole lot of uncertainty from how the presidential election outcome hangs in the balance.

CEO Chuck Harrington acknowledged item number two right off the bat Wednesday by welcoming investors to Centreville, Virginia-based Parsons’ third quarter earnings call Wednesday “on this eventful event of continued vote counting.”

Regarding item number one, Harrington said Parsons’ almost $300 million pending deal for Braxton Science & Technology Group announced in late October will unlock more growth in the space arena and particularly for what happens here on Earth.

Braxton already is working with the new Space Force on an effort to modernize ground control operations for the purpose of unifying those functions across many agencies that have space assets.

“From a national defense perspective, (we) have a lot of satellites in orbit that are being controlled by multiple systems and the beauty of an enterprise ground system, enterprise ground services, like the work that Braxton does, is it allows the Defense Department, NASA, others to be able to control or communicate between those multiple systems at one point,” Harrington told analysts.

In Braxton, Parsons found a company with 50 space mission hardware and software products whose customer base also includes other defense and intelligence agencies. Parsons Chief Operating Officer Carey Smith told analysts the companies already are working together in programs involving space situational awareness and space weather systems.

Companies like Braxton that are already a known commodity to Parsons are where the latter sounds likely to continue evaluating potential deals. Helping Parsons is a still-relatively clean balance sheet with a 0.8 debt-to-EBITDA ratio and $614 million in cash and cash equivalents.

“We are still in the market. We've shown in the past the ability to pull off multiple acquisitions per year. We have infrastructure built to do that and more of what either accelerates or slows our acquisition assimilation is the quality of the companies that are out on the market space,” Harrington said. “At any given time, we're talking to five to 10 different companies and that are we're primarily pulling out of our supply chain.”

Meanwhile, third quarter revenue fell 2 percent year-over-year for Parsons to $1 billion with adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) up 13 percent to $101 million. Parsons attributed the decline to its long-term shift away from contracts with pass-through revenue in the critical infrastructure segment, one of two alongside federal solutions.

Parsons is holding to the $3.95 billion-$4.05 billion revenue outlook for this year with a $10 million bump on the low end of its expected bottom line to $340 million-$360 million adjusted EBITDA.

That includes a coronavirus-related impact of around $75 million in sales with $50 million in federal solutions and mostly from a disrupted contract with the Federal Aviation Administration.

Harrington indicated the FAA “has taken a very cautious role” with how many people are working in proximity at once, while other international locations of work such as Antarctica and the Marshall Islands have implemented travel restrictions.

For situations like those, Harrington said the “duration that we were not on ice or on island, just extends the contract out in time” and would pick up where Parsons left off.

Now to the giant election elephant in the room Harrington addressed. The priorities of a second-term Trump administration are “fairly clearly” understood, Harrington said, while getting a “good line of sight on a Biden administration” was a challenge.

“I spent quite a bit of time speaking with both sides of the aisle and Congress and Senate transition team members, and what we came away with is their emphasis on national defense priorities are very aligned,” Harrington said. “The emphasis on the underlying technologies to help defend our nation are aligned. If there was one difference, the Biden administration seemed to be more focused on a large infrastructure bill and how they would fund that and put that in place.”

Parsons sees both those national priority areas and the company’s own for organic and inorganic growth as one and the same -- cybersecurity, geospatial and radiofrequency intelligence, space, missile defense and what it calls “C5ISR.”

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.