Parsons Corporation has reported financial results for the third quarter ended September 30, 2020, noting that the total revenue decreased by $19 million, or two percent, from the prior year period, to $1 billion, the company announced on Wednesday.
"We delivered strong third quarter results with record adjusted EBITDA and generated outstanding cash flow. We also recently announced a significant pending strategic acquisition in the rapidly expanding space market that exceeds all our disciplined quantitative and qualitative M&A criteria, while also preserving our financial flexibility for potential future acquisitions," said Chuck Harrington, chairman and CEO of Parsons, and 2020 Wash100 awardee.
Parsons’ operating income increased 24 percent to $66 million primarily as a result of an increase in equity in earnings and lower indirect, general and administrative (IG&A) expenses. Net income decreased to $41 million and net income margin decreased to four percent from the prior year period.
The company noted that these decreases were driven by the nonrecurring positive tax benefit impact included in the third quarter of 2019 from elections made in connection with the filing of the company's 2018 S-Corporation tax return and associated with the company's change in tax status.
Diluted earnings per share (EPS) attributable to Parsons was $0.40 in the third quarter of 2020, compared to $0.57 in the prior year period. Adjusted EBITDA including noncontrolling interests for the third quarter of 2020 was $101 million, marking a 13 percent increase over the prior year period. Adjusted EBITDA margin increased 130 basis points to ten percent.
Adjusted EPS increased to $0.57, compared to $0.53 in the third quarter of 2019. Additionally, Parsons has won a variety of large single-award contracts in markets of national security importance throughout the quarter.
Of the awards, Parsons secured a $307 million contract with a classified customer, as well as a $115 million option year contract on the Combatant Commands Cyber Mission Support (CCMS) contract by the U.S. General Services Administration (GSA).
"Our strong operational performance enabled us to win large new contracts in high-priority national security markets. We continue to execute our strategic plan and look forward to further leveraging our strong balance sheet to drive additional shareholder value," Harrington added.