Parsons (PSN) 8 Aug 212021 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Parsons Corporation Second Quarter 2021 Earnings Conference Call [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker, Dave Spille, Senior Vice President of Investor Relations. Please go ahead.

Thank you. you XXXX us financial thank our to and quarter second results. morning, for today joining discuss Good Please note that Investor Relations we provided presentation of website. slides our section on the

from Management make a and now future update today to variety a other On difficult substitute we for for make press disclosure. call during and results materially quarter of with ended also our session. Parsons' financial statements. differ this Please turn Form not regarding financial our XXXX are will future corporate not We remind for call non-GAAP highlights, revised those and will measures I XX-K future undertake you XX, the Carey. any Today, statements are the provide fiscal the These performance call, you CEO; forward-looking non-GAAP the financial operational do not guarantees discuss and the our GAAP to obligation refer guidance. Management question-and-answer statements and also and statement described filings. results will during our are to performance complete caution then over will forward-looking release are involve reference may forward-looking measures Carey future Carey that the to and measures. such these predict. comparable We will and XXXX, George me factors. close may events, factors We December of second forward-looking to in in a SEC year Smith, trends projected earnings and due risk call the strategy are an CFO. risks to Ball, Actual statements of of with President that that and anticipated then George company. anticipated uncertainties overview

CEO. of I be At segments everyone excited the with a outset, that lead complementary role am Quarter you, privilege and Call. to We're across Infrastructure I Thank an want the in to Earnings honor say It's Federal the our to to me also to markets Parsons welcome for demand. business opportunity all leadership in Second our as XXXX two Persons' let Critical Harrington, how has I Solutions his right want Chairman, for segments. Executive the with thank XX again Chuck capabilities to increasing and right take years. our all the past CEO this both Dave.

well are new well business with my the start the as of focused thought would of thoughts my role I it as improving. Given as CEO be on we helpful and assessment areas what's going some Parsons, on to

call, legacy critical As hear are Infrastructure where capabilities you well today's growth positioned will throughout to deliver Critical our priorities. and customers' to closely aligned national highest organic are drive high-growth our Federal Solutions, complete security we customers' our are In immediate in attractive, programs. priorities markets missions, our

foundation win We as competitive that's existing solutions contract large continue prime we experienced procurement growth. together hiring we wins. have provides and have to We result, And a threats. a solid which, technology-rich That and delays, successful long a base differentiated for and on enabled near-peer M&A focused environment. new we our track a with faced offer work, funding record said,

issues. this addressing is our on leadership discuss focused morning, will executive I As team these

and and Infrastructure. for dams, Critical transit. airports highways, multiple smart to disciplines, bridges, rail across roads Moving World-renowned including design cities, firm projects and

reclamation including of treatment, in and water the have mine and contaminants. emerging wastewater differentiated truly environmental remediation, We capabilities elimination

to infrastructure at with resiliency We also drive which design offer unique technology. of us expertise placing cyber our the capabilities, intersection protection, be critical infrastructure can and coupled and

been in infrastructure the acted. funding Middle East, even States States, United which United demand more without even in Canada continue being build see and drive infrastructure increased place, We have to an throughout would the the

East posture. Middle Finally, helping oil prices have rebounded, our is which

programs However, to were are prior completing we that legacy XXXX. awarded

of as work. no to owner's instead areas construction longer most work perform focus aware, and we in such you particular and decision as As prime engineering design strategic the on made are areas such

wins, we been contract this background, XX-month billion, $XXX enough to not excellent generate the but of company quarter expectations. significantly first risk ratios result, half detail. strong the and to the our forward. We in our our profile $XXX With of going key in revenue we Despite both completions program has As and book-to-bill of of for of million revenue reduced million the like compensate XXXX. discuss cash quarter performance contract more below feel was I a we segments second in that record faced $X.X second achieved would record flow awards did

funding with working on our up ability across order diligently drive is In major to our Federal ramping growth our customers ability part are we're dependent and our recruit contract to task new Solutions, accelerate retain in organic employees. wins. and contracts, We to

hired, in space. competitive hiring particularly is the now, While very technical job we've once employees and the terrific environment right a done cleared retaining

As of experience an three support attract a can Officer, industry our part Officer also continue we extensive background. top federal and of Recruiting to address priority, this, strategy our to talent ensure decades federal Human with strategy new reviewing we a our hired Resources need the with we growth. to and Chief we're recently is to Communications our new Chief

two and our procurement a hiring funding quarter second result are guidance. competitive the XXXX and environment of we a reserves, As lowering delays,

have ability Edmonton changed our assumption part to of in sales consolidate also reduction on guidance, on our we the program. As the

we significant accomplishments, have During many the quarter, our quarter second with starting record flow. did cash

M&A We expands our mission-focused to drive that enables and threats us Federal both acquisition strict technologies for our near-peer information achieved advantage against while criteria. exceeding announced our also We awards Solutions segment. in record key a Parsons

book-to-bill Second quarter contract book-to-bill was billion, led of Federal of ratio our segment. our X.Xx a awards year-over-year X.Xx. were which highest XX% record and ratio increased by $X.X a also equates to Solutions in to This ever

X.Xx. solid was at also Critical Infrastructure Our book-to-bill ratio

by to We analysis were billion for significant largest and won mission-critical $X.X and driven the the X engineering, history. we quarter, Parsons Parsons' missile ensure the second support will administration's the contract is security. the integrated contracts provide that TEAMS Agency, Missile Next development work award the national for layered awarded of contract During commitment management defense Under Defense contract, in the were a systems value this that CXISR, services. cruise against ballistic, Administration threats. hypersonic We of years. out $X.X performance States forces year billion allied of United and exercises, booked Services and order awarded the defend with contract three for missile of operations million General seven $XXX and and period a million of the total period $XXX by task base We total the information by

ISSA. unique Solutions by first also the solution a the incorporating community, Department year partners, and create Defense including awareness out from for information We real-time of or period Center contract pace evolving contract of the the base capabilities that order to of domain Systems of a In awarded $XX enhanced the their by to and joint-all the and we QRC State million. worth warfighter by Department in of threat. Situational award responsibility. leveraging our total million will booked mission intelligence significant won capabilities advantage a our support that We adapts acquisitions Alpha, area Integrated approximately value Space providing the Polaris We for Awareness OGSystems were Missile task $XXX numerous second quarter, enables of and

for by Parsons for won space to of $XXX and and we delivering from operational, in pleased in our multi-domain innovation million goals our ISSA remained domain and the highlights, quarter. solutions incorporating in program agility quarter activity the critical operations. second and capabilities Critical contract, unique with million. $XX will significant data management this am effort $XXX I Alpha expertise, has acquisition. addition the of Federal was second million by Infrastructure contract segment, astrophysics, strong a analytics Under East Middle meet award including awareness booked This Polaris Award value in contract In intelligence, the expertise business. the awards has and technical providing ceiling also Solutions our the with very contract

on remains continue we of our opportunities high, strategy our the execute acquisition attractive and differentiated in level see mission-focused with core M&A of We buying activity market technologies. The to markets. companies in

second market. strategic financial revenue partnered specifically the early XX%. M&A contracts have adjusted both with BlackHorse win exceeding in with capabilities and also and on enhances customer exceeds transaction margins and intelligence base pursue During the mission-focused and large million ability we acquisition culture Solutions and dominance. warfare criteria and quarter, and domain our similar near-peer This company growth our This a Parsons' cyber, military, threats. of strong $XXX combat EBITDA joint-all in electronic to space BlackHorse operations, reputation the expands we acquisition a next-generation this with a to announced acquisition has BlackHorse in July. closed subsequently information is

conjunction responsibility or our employee CARE Responsible make empowers our we this with ESG our America initiatives, to launched The recipient published initiative, highlights an Military of community, reducing of In proudly LGBTQ equality and awarded for new army is Association Scholarship report, difference. dedicated emissions veteran ethnic and advancing Spouse Military Hegwood, which veteran. to inaugural XX% This by partnership a the the awards, XXXX quarter, we strong initiative, initiative social corporate and greenhouse the inclusion. are by Modern military fairness which our equity including a In enhancing to America, significant Donna Jonathan Modern gas Johnson advancing Enterprise every generated and we this to and Cultivating Parsons with diversity. achieved Association racial gender, flow, the and maintained XXXX we of Military absolute the diversity, balance sheet announced flexibility. record and acquisition in summary, spur proud In cash XXXX free

solidified win. our we with our base of business TEAMS $X.X forward, have Going billion

have that momentum half, accelerating into in the In is a we to tailwinds continue half second We're on addition, and business initiatives, expected and to contracts recruiting growth. are retention from and of new over also this growth contract amount XXXX first year and expect grow we COVID we post gaining the have this and our of beyond. significant meaningful won,

and differentiated diversified. portfolio is Our

artificial Our Solutions is defense cyber, Biden space. national Federal missile administration well for priorities with CXISR, intelligence, and portfolio the security aligned

and quarter cybersecurity at markets, consistent financial Infrastructure projects. to priorities resilience and win Critical new is excited for the discuss turn our work. We're enhancing and administration's differentiated growing these highlights and proven wastewater guidance. environmental and remediation future to about enduring ability of George? our the Our George second the goals given to that, portfolio treatment infrastructure and our With with and over call XXXX transportation, the position future, and water in I'll experience

Thank you, Carey.

environment. cash quarter the from SG&A to was were reserves highlighted These we quarter. indicated, driven second expenses primarily two Carey hiring flow, results for would the competitive the by year EBITDA decreased second $XX driven down XXXX. As decreases flat relatively to and were strong the by represents and from year two of from a and activity. from prior reserves our robust contract XX%, Braxton XX% $XX delayed second I like in Adjusted by reserves adjusted as M&A a EBITDA decrease of funding, two excluding margin and were and procurements address $XX million million million a environment. awards hiring were revenue of revenue These quarter the Total acquisition. X.X%. quarter period and of delays the recorded contract last as well decreased second competitive decreases

for the plans previously unusual The may Federal reserve to recognized are a Federal performance This and contractor fees beyond and delays in we with a adjustment Solutions The contract, prime contractor, that for reserve $X.X control suffered our equitable program prime. partially now of fee prime the was is of has impaired. request the highly fees determined we've issue share recovery. first where portfolio. a on a million incentive be type subcontractor The

of schedule a we second and associated competitive million was amount Extensive legacy a offset seek The by million escalation with recovery associated driven claim segments, for revenue have a This and turn operating partially second during and our the I'll The procurement decrease $XX or cost the quarter from was by with X% second of were quarter in starting $XX.X revenue the reserve with hiring resolving program. first year-over-year. damages. submitted reserve. program Braxton. funding to discussions the critical unsuccessful is these customer environment infrastructure in with the now million to aforementioned and revenue decreased by issues in where Federal delays, $XX delays, Solutions,

decreases acquisition, Federal Braxton XX%. second margin were million $X fee quarter XXXX and Solutions EBITDA These EBITDA to $X.X million $XX incentive second the recognized of from revenue by decreased Excluding the of and in adjusted reserve million the quarter decreased XXXX. X.X%. a adjusted the driven decreased

our Moving Critical segment. now to Infrastructure

by adjusted program million completions taken Infrastructure program. Critical was the was offset Infrastructure reserve joint or by driven This $XX increase from revenue $XX.X a legacy by impact by by the reserve a impact and $XX.X and the taken driven million $XX an Critical million from partially XX% on the decreased unconsolidated Infrastructure decrease and Second equity quarter EBITDA year-over-year. decreased earnings year-over-year program, ventures. on Critical from legacy million in

margin As a to EBITDA decreased result, our adjusted X.X%.

I'll flow and metrics. Next, balance discuss cash sheet

compared Our the end at of at net and days was at XXXX days XX to second the DSO the the of second end quarter last quarter end of the quarter. XX XX days of

million quarter $X in second prior the driven positive and This capital. the compared compared in million collections second million XXXX. expenditures $XXX of $XX cash in period. operating cash Our increase flow second the to totaled year quarter $XX by changes was Capital quarter million in totaled to working strong

ended ratio BlackHorse with total We the $XXX of million equate a forma pro Considering This leverage our ratio $XXX acquisition, pro quarter strong. X.Xx. million. of impact would very June as XX, the X.Xx. debt remains sheet of forma debt of net balance would net debt net all-cash leverage XXXX, a the Our to

the and our ample to billion investments. conditions by increased This provides this market During the option advantage to flexibility $XXX $XXX million continue of with with increase with us facility to positive credit $X.XX growth conditions. million our took we to certain under financial quarter, revolving

at ratio $X.X contract On and Turning Infrastructure ratio with to our X.Xx, the bookings book-to-bill quarter. for representing at was awards X.Xx. a Federal trailing Critical We Solutions a X.Xx XX-month second basis, reported healthy X.Xx. of book-to-bill a of billion,

billion, to at backlog and the quarter X% continues of from two up last end than the $X.X Our years of totaled more year, revenue. second represent annual

Now let's guidance. turn our to

for guidance to change second adjusted cash the XXXX a our competitive consolidation the the in Edmonton we regarding program. and reserves our environment, funding assumption delays, flow revenue, due and and updating in are hiring EBITDA quarter We of our took a procurement

$X.X For billion. $X.X and XXXX, billion we expect revenue to be between

to expected Our million adjusted EBITDA million. and is be $XXX $XXX between

a in cash flow operating sequential activities million third between QX. improvements revenue and is cadence we then and from seasonal $XXX EBITDA in perspective, declines quarterly slight quarter From adjusted normal the million. Our and to expected be expect sequential in $XXX

half in turn I'll For back outlined With flow, second key to of operating cash we PowerPoint Other with heavily presentation. guidance are in on Carey. year the assumptions Slide XXXX expect QX. in the connection to XX today's weighted call be that, our the

year you, Parsons. for won of XXXX We've George. significant Thank an amount important business. a is new

guidance we However, reduced our for the reasons George described.

achieving and We're will initiatives. new business. year, this on contracts, recent already good executive a significant intensely our of assessment on that leadership by The contracts. of recruiting remainder amount the to believe our and is guidance human retention For our existing of driving team is by changes updated our won resources repeat strategic funding driven we XXXX improve, in leadership growth and critical also executing news the organic we've driving successfully focused and

the in prospects. confident and our very growth business, about I'm forward, Going I'm excited

and Federal generate is foreseeable the we our Infrastructure for for be X years, and the successfully significant balanced expected a proved portfolio, past Critical timely to future. to demand Solutions which to pivoted Over solutions

We and are positioned with attractive, infrastructure security for national well line differentiated open critical solutions. these the now With questions. high-growth that, in we technology will markets

with [Operator comes Instructions] from Securities. Truist Tobey first Sommer question Our

variable? labor inflation, anticipated pickup segments? sort could expense about impact that you and could change how an I that of in additions describe be is basis? sort you heads pace of then also I apples-to-apples understand both What would in growth If labor? question And could your potential the new ask a would of could wage on impactful add

half to upon is the X%. second this -- Our expected is based we've bit in from this year And the first to a achieve proven able what half been of growth historicals.

So comfortable with feel very that. we

cost as side, reimbursable inflation and the include we wage most clause. far As of adjustment a the contracts, our federal on do

but we we reimbursed bid the time So that don't the we material, in is when programs. -- on the and price rates the through the usually escalation budget fixed

is contract just that really And is of it difference historically both any to mechanism on the Critical Infrastructure, based inflation? or units? wage you've Or in relative there across type had experience

I really to easier both type segment. on units. It's Infrastructure it's the say Critical contract will based across in much recruit

Critical on then think, as this? situations You such and that I this did is And a prepared side, the what's historic reserve Federal reserves in Infrastructure, mention, as infrequent in for remarks the relatively a frequency the Solutions occurrence. such

Infrastructure the responsibility third it's for getting a side, a adjustment, go quarter prime the submit contractor going do was programs to Federal We through, a our And Solutions, event update take request obviously, permit on did of Critical event Solutions a need delays a be you reserve, the we triggering and the to to very on the have responsibility, Federal party. not our common. this and the as more delays and reserve, assess can that have they every equitable in was reserves, infrequent. their were triggering it And quarter. is

go far in need of triggering a have Critical sort a like have back event how So for to Infrastructure with in to forum this we quantified that would be earnings? to reserve a

George, that? do you to want take

a different this, year The last was we partner. like had last Tobey, It on we a on were event a minority project project. was which actually

a taken there affected in and might that late XXXX was earnings. You equity write-down recall

how And just far back? get a prior to that, recall can you So sense... to

it public. be prior went well would And to that, before Tobey, we

to we You a we went of which a pickup. reserve, substantial we legal when taken had and had might resolution a public, matter, we the had actually increase related recall, large a conservative very

public. prior to last we we've a public. of risk, So Carey them they programs, the do job managing number her year. a over legacy these But in went we went and all two had think we indicated of two bids we've remarks, had in but before unfortunately as working through back since result We are great unfortunately we go prepared reserves

a years have going We public helped that couple put some before that ago place different processes in of situation.

First, we bid and we bid. are on selective very what don't

We have bid guidelines.

design work. prime For no to example, and longer focus work owner's we engineering shifted We've construction our work. bid engineering

also with. are We type selective work partners the of on that we

strengthened partners joint of list our results whether experience. in work have we're and we We we've or will participation with on we the Officer our a And past or the not minority on of managing partner. based And boards, proven will we that position venture organization. not Chief Risk strengthened a and

these, think believe mitigate we've that to as a of been result So we able I further.

sneak you may are it in? I What attract be helpful? employer? that it your us If of If one ability examples, to changes Is more Is a an posture sort to making it benefits? talent? give improve you could as money? would some Is

couple I'll you of a give examples.

and First, we comes Resources than the feel in critical is Human hired it important infrastructure, a we federal federal She in with is kind experience, which Officer. of because different very Chief recruiting high bar. sets recruiting

which in programs Communications that that there. that HR of ensuring having also the ESOP Officer new got will three recruiting So feel board as also Chief a help she public bring. We've has will we've benefit across help. an efforts. that believe decades me with We She's We co-located being unique well on experience competitive company an salary and I benefits. brought in Centerville, we is do a

we with recruiting Technology Maryland, Chief way We along program, is the position. to in all with dual D.C., which up fellows can areas. we program for go a path have technical management, have career parallel We're the Officer folks Virginia offering up a that that, outside innovative. feel our technical And

Georgia Army co-located Augusta, expand. was an with Specifically, we down up several set ago, Cyber years that office

we're co-located an area Cyber the Force out we're -- Huntsville We well. the Command. office and with as also Danbury And have hiring doing Air Antonio, San in

in get do kind often space outside environment, on difficult. We're COVID how can a XX% programs. that's our So of of an is about with to of working development of that customers. do the us unclassified you What we point the showed lot

really software system customers development our people letting then software work from program in to come people virtually that out remote; to This DevSecOps work system they a do back to want to with they can It's we're working allows When developed want agrees flexibility. post And want that if we're customer a wanted environment. that survey, their COVID, back a anywhere we be finally, unclassified we remote, gives they they hybrid; reside. they work in hybrid, people if can develop called in can maximum they we So an that. office, provided have found FEDNET. the the if to with or to that was We the continue that they people flexibility. did work a office, that

initiatives those all of us be drive think I will employer to choice.

from Sullivan Our with Benchmark. next Josh question comes

cognizant of the for are those to leverage Just just Is that as the of you're of how adjusting budgets raise market? Are wage inflation you government knowing mentioned, compensation be to the values the features, they you talent? going labor contracts? dollar seeking level the customer

I work, escalation do markets, the X/X inflation. on us the get is federal have believe we price that properly that sure on our then in make they are And cost cognizant of for to of roughly represents those onus we really fixed price and it. rates, which the that reimbursed clauses. we reimbursable, Again, do

of headcount? the you then open is the impact, beginning could way there versus provide environment of number the positions the is overall there on And a today to hiring Is year having that quantify us? any

What people Parsons. share running on with pleased with share not And average that information. surveys, do you stay We're against Once and will with we've we is retention. here, the our on front. on are they do retention. retention get PwC compared We I industry we

just then one And one. last

attractive in growth What's Does the had space make this in technology at M&A and your BlackHorse You the market your the labor versus vertical. technology of appetite point? versus market the more advisory? acquisition

advisory. on focused versus definitely technology We're

from acquisitions. win we provides further the technology happy we've all been How integrated our acquired, that have to focused I'm differentiation If do you'll is solutions? integrated solutions. ability see they've BlackHorse new what you business. acquisitions with that see on I And our really think

a Defense acquisitions, new the Air we've look $XXX I for More awarded the of We were we Air CXISR opportunity million. recently, for million. earlier our opportunity, spoke you commander Base business $XXX that combatant as for at won million. about today result $XXX won If the

All us are enables further in joint-all of acquisitions able particularly result of the do. the us BlackHorse and domain been that to these a we've positions arena.

Joe Our with Stifel. DeNardi next from comes question

the wonder at could trying just all about if talk George, the the in in partners? about how that you exists infrastructure, line you there. of Can trying charge you exit either still then understand Just I program? business. or construction, how portfolio is to, is I much risk talk to guess, are And complete of much construction I directly with more or deemphasize indirectly how understand

I'll the of take that first. second part

We of to our portfolio activities. construction have exposed XX% probably about

construction. remarked, would is the a to have Carey Due don't our venture Relative do taken we doing joint job with variety and the well design to a those in trusted we're in Frankly, design when to along. consider QX, infrastructure only in activities contractors. critical original We're exposure. reserve of build scope the prime the cases As done. we was scope the we design bringing We basically as participate where project which on changes. partners largely

in As differences. be on and and we conversations including were We of that very quarter. my they fruitful upstream those the our second end resolving decline the intense through unsuccessful. productive had be to hopeful would They proved very indicated, I remarked discussion, with actually

week. unfortunately we submitted which had just last So a to submit claim, was

job. the in along well we're So

discounting marked we've significantly. claim think it by that I

likely guess believe it behind litigation. into, we us, it is, but will my we evolve So have

shortly to a actually we protracted a of years period similar the the that up number take had resolve we'll issue before pick to So a had ago we IPO.

along it job will this be the So is a well solution, very point. protracted but at

of obviously, a cash just pretty the the on could if parts there, you Can just kind elaborate if that, reduction. you Edmonton consolidation about guidance. impact on has then meaningful And operating any? moving And talk the the that on

the reduction Critical are payment there's relative of Relative I year. an the had payment significant Infrastructure original in the correct, obviously, reserve. guidance. -- legacy back the to a project though from plan, in anticipation half our described an you actually earnings to parts, impact the in moving milestone There's the of receiving We milestone also in impact

that that Given will of into a favorable fact headline taken year. million the two matter, second which big half payment guidance. that, in of $X that, a the we've had addition legal Then a the would of litigation, out we probably over Those result resolution the issues. a are to evolve of in

a around impact Edmonton $X deduct It's original not is the that's from significant. guidance. So The of million.

And the to then understand just standpoint kind where of year? still two update XX% segments on on us infrastructure to And maybe year? get do margins. margin on margins you you segments. see between for both you trying to Just a the Can at the from just impact two these think charges next go-forward of getting

Xs Infrastructure of by so still get can we including believe year, full Critical as to year. half the for us across second the the over segments, of entire between ahead. both that margins the do So will get And that's that forecasting we we're -- the into margins we around X%, and pretty portfolio, XX% well move balanced

Infrastructure, but Critical would And taken, this have XX% at been quarter. with that, reserve

with Cowen. from Rumohr von comes question next Cai Our

mentioned we that two, there significant should HR Are communications. the changes, leadership know? mentioned changes you the the and other you Carey, and So leadership any

also strengthened and that we're program operations. We've the Risk government been and as that our on on, reserve beefing I we've person our of some and Chief relations our team board. of charge And took we in mentioned, has up hired the Officer, put is

space particularly cyber. some critical In addition, strategic in development business we've brought in hires, the key side, and on

bookings And quarter, delays. would environment terms in of this had you today? the what we bookings and about third this and everybody terms then be of bidding in I good What has think And talked book-to-bill looking in for seeing quarter? are you

environment $XXX million. win. Base as integration I and as robust. very is our publicly Air That announce we prototype Air was win So the earlier, Defense did one mentioned satellite our well bid

one after first $XXX year. those of the of bids $XX last $XX submit right was This million. billion to occurred The quarter. Both compared third we billion will year,

billion $XX billion, pipeline that split Our $XX $XX billion in Infrastructure. Federal, Critical is in

million. $XXX than greater are that opportunities XX have We

that I'm in quite indicate, all pipeline. about bid So opportunity the excited

you XXX. Edmonton Critical revenues? we big XXX split And see through, one. Maybe in of Infrastructure? revenue the by XX here, was the one George, how your terms was last that FS when down, walk to how write-off, us And guide of rest took between the and of is big

So item million. midpoint, BlackHorse, impact cover I the is of talking the off the terms which of first $XX in is about would

in So impact then reserve The kind my It of a $XX.X little have XX actually are and Infrastructure change. was on by remarks, a of XXX. delta onetime you're dealing went of been the the million Critical might issues P&L over with bit but and XX. prepared

So Edmonton million. XX. $XX not is It's impact onetime very significant. is the only actually

So is is all the volume. to nominally $XXX balance which related million

two is it how the segments? And split between

XX-XX Federal, Critical Infrastructure.

next question Gavin Sachs. with Goldman Parsons from Our

be I revenue really don't the fully declines. honest, To understand

would in organically that I I down funding Just and in there. is business a Is just delays. the segments. already both just XQ is And given in on -- wins? on the the context hiring you're is XQ XX% little more But on that color So love on? and ramp-up new programs appreciate that also and issues that executing

thoughts significantly? I you the So on declining are implies you core which that to business would not just love expected, dynamic. growth hear your getting is the

Yes.

hiring at ramp-ups basically the new So get that on we how we feel and can quickly board. looking it's

of We've to year, received and new core up. get ramped with up staffed particularly of We business it we the business got the and on that we've this program were Infrastructure side new occurred that the significant the business. business, Critical had Some has offsetting declined. completions

you this a targets? you I of than revisit a up? in you do you your lower And think catch kind mean prior do up? need And second can when when think are I implies how you, number you -- confident guidance. And to you need do catch actually this the half had XXXX

So XXXX, achieve we half, the those confident we're of got second bit that momentum. a will numbers. quite We've

million year. we $XX XXX We CS further. up. additional The compliance has And talked ramp growth. Giant up million that inspection We award, I Our is program is management received year. this to program The was Texas about Infrastructure Middle restored is program $XXX folks a win, restored in East, that even growth. vehicle add win. ramping Hidalgo Line. pre-COVID which win up won won FAA another Critical starting ramping has XX speak. is we last and and a the to It as program about pre-COVID to SPY will

projected we confident. first without feel and reserves. growth half we X% So the over have again, BlackHorse the And

X.X Last calculate Did on on that to X.X. it there? reported. closer in change one, book-to-bill. some debookings just you backlog, The If have looks I net

the incumbent into contract of line probably is is end of we The And hair that, fast implement to comes to top for in addition as where due a related it was was approaching around in performance a the before unexpended is situations $XXX contract new there Gavin, softness we prudent were concluding it that frankly, play. the TEAMS largest million under contract, just $XXX of recompete. Essentially, single Yes, of burn Then in that the number we that the backlog reduce total. byproduct the to contract the that, won't number second burned did, programs. the based upon of component the period a on million of quarter. be value to and rates, a felt

comes question next Epstein with Bank Our of America. from Ron

morning. for just This your I differently in actually that how on see the where was Elizabeth about the coming your of And this your primary predecessor? are you're really wondering, role, Ron areas focus do you new you out gate? thinking is business now than

I both and say company. would where focus in with then as I strategy be to which end-to-end is, So continue to we're really the to technology solutions lead is drive and and Those differentiation. Centerville. into our positions and markets We're I going This markets a in top were to first, focused my as what able be going having smart be co-located the and intelligence, high-growth on chain recruiting. larger aligned And CXISR, is is people-first, move we've mobility. such up to win be I on obviously culture having able jobs. missile enabled would innovation, on very role and has in the call right the of integrated to what disruptiveness coming cyber, team leadership improving value think the Chuck agility, focused us taken defense where We're of segments.

I you like? is about, is think that as you thinking comfortable the you or then what think… out how looking a lot but going going of ratio? forward, And mentioned your to there And with what tech other how M&A potential know are focused about pipeline you opportunities you're be see leverage area, the sort potential you Do of opportunities

conversions on I the also the side, path the the plays. critical technology-related a continue aperture see on federal currently to be path. opportunities have civilian X.X we're end-to-end continue differentiated about information we're to federal needed solutions leverage Again, pipeline. at the We'll we forma. But excited opened near-peer leverage. We've in threats. focus is cyber back perspective, BlackHorse, that the to significant really We you and technology and areas on comfortable us and looking what's infrastructure stay about seeing. think have. really that would We're advantage pro electromagnetic From we the because a for We're us at Xx at that

from William question Louie next comes DiPalma Our with Blair.

mentioned you Infrastructure Critical Federal division. both Carey, completions the Solutions program and for

from the of much Critical was from the side revenue reduction, terms completions? program And could factor completions the of a Solutions if from quantify contributions wondering Infrastructure the I the In how is the and program guidance side? Federal you pressure

on the program So Critical the were Infrastructure side. higher completions

than Now it's what cycle side. the shorter Federal a see business on you

ramp we that the liked new expected. had gotten So we with was haven't like. do up as that quick just be offset to to we'd be in as hope but as as what to would business, we hiring quick Again,

is. that's So our focus where

magnitude not you churned that revenue the to elected has able Federal trending division, renew? is like the quantify to for off are of off or like has Solutions and And

George?

not it. a of to really not It's matter electing renew

So by as work delta Federal, I kind XXX of offset work of inside Louie, the completing suggested, XXX, inside between XXX And about is Carey it's the of Critical of mentioned previously, Infrastructure. up. ramping

guidance. what's on net think walk the your activities worth the were asking you question, to I EBITDA, of look those adjusted If about on two that? answer relates To related $XX as to it's it about you So million. the it's relative at margin contribution

-- do XXX%. win rates about we've I rates to had also fee approaching highlight want high very that And

great the stabilizing in TEAMS us the a puts position obvious from really book. biggest being one, which

XXXX, X.X% it's Going X% you forward and if have at and for And X%, remaining. XXXX, respectively. we look XXXX

we've pleased solidified really our we're that core So base.

Joseph Our is DeNardi the from next Stifel. question with follow-up

is the Just continues looks runoff at following at up of over I headwind on the that It from business last or year? so quarter? The question, Critical end revenue that's Infrastructure, kind Federal in like Federal at matured, the second or it pressure does continue that that work the but does now just understand. through

of the We group, that Engineered will Systems that have completes one Processing a program in that's program it's continue that January Facility, Salt our called Waste was XXXX. and in

a couple where think bid I And think, you you have some so. just have last Carey, all value number all of several awards update on, I number that I have is of You year next now? talked of the $XX couple the then quarters, involved partners, the months, expecting past past of over us big had a think. over over billion pretty in quarter, Can about or to contract those

that much So just how billion to trying much of been and to of understand has I'm come? yet is how awarded $XX kind

and $XX we for full billion, up from So that's last year, bidding $XX the year. anticipate billion

last I receive I significant since quarter, $XX Base then. it Air was We said billion. did the award the Air think Defense

us can higher thoughts infrastructure? you're on that in going to with for maybe any And updated means there provide what you think customers side, just kind the terms you what of how of having maybe handle And conversations around, then infrastructure they're just business? your all

And about would and transportation, this billion billion the $XXX of bridges, is excited was of that work, play; and freight Parsons closely is addressable other you new and water for all in between roads, that. western plays So we're $XX billion that billion infrastructure in ports; $XXX Senate, to monitoring airports there's Bill rail; Infrastructure obviously areas billion $XXX billion we're as reflect And the resiliency. $XX Bill and look that $XX $XXX pertains water there. billion and really are is progress billion, markets. safety. passenger at out public again, about Those week the that made in we if the Parsons' $XXX highways; transit; $XX the infrastructure then billion and The Infrastructure

tax that's they're So XXXX. even enacted seeing significant We're since we're would the states Like us. I well, of we gas highlight XX at Infrastructure as Bill. opportunity growth. X if not look California, already dependent on for think that you a

billion. Middle has upgraded $XX growth of win plan. that's in $X.X program similar We're the Michigan heavily, over as and place billion put states they're Likewise, in a seeing in and for Canada XXXX, management an that to investing has significant they've So East Vision infrastructure like Canada, city Missouri. Quebec part years. Illinois, program then had And the a there. example new a of we industrial Saudi XX

that's from you it package? when to kind of funding expect So would to the the incremental awards infrastructure additional coming see tied

flow. is estimate six to see package start would infrastructure our we funds months when after nine is to is So the approved,

That the to for turn all Dave to now remarks. today. call is closing time would the we back have for Spille like questions I

joining morning. for us you this Thank

And give today's weeks. call. over end speaking you many We coming don't to call. we'll hesitate of If have please to the with with questions, look a me day. that, great any a Have forward you

today's conference Thank participating. you This call. for concludes

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