Parsons Corporation

Good day and thank you for standing by. Welcome to the third quarter 2021 Parsons Corporation earnings conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star then one on your telephone keypad. Please be advised that today's conference may be recorded. If you require operator assistance during the call, please press star then zero. I'd now like to hand the conference over to Dave Spilly, Head of Investor Relations.

Thank you. Good morning, and thank you for joining us today to discuss our third quarter 2021 financial results. Please note that we've provided presentation slides on the Investor Relations section of our website. On the call with me today are Kerry Smith, President and CEO, and George Ball, CFO. Today, Kerry will discuss our corporate strategy and operational highlights. and then George will provide an overview of our third quarter financial results. We then will close with a question and answer session. Management may also make forward-looking statements during the call regarding future events, anticipated future trends, and the anticipated future performance of the company. We caution you that such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ materially from those projected in forward-looking statements due to a variety of factors. These risk factors are described in our Form 10-K for fiscal year ended December 31, 2020 and other SEC filings. Please refer to our earnings press release for Parson's complete forward-looking statement disclosure. We do not undertake any obligation to update forward-looking statements. Management will also make reference to non-GAAP financial measures during this call. And we remind you that these non-GAAP financial measures are not a substitute for their comparable GAAP measures. And now we'll turn the call over to Carrie.

Thank you, Dave. I want to welcome everyone to Persons' third quarter 2021 earnings call. We had a good third quarter as we delivered on the strategic and financial objectives we established at the end of the second quarter. We reported strong sequential revenue growth of 9% with 7% organic. won significant contract awards, including five worth more than $100 million, which was a company record, achieved record backlog, reported solid margins in both business segments, delivered critical program performance results, closed two important acquisitions, and implemented a $100 million shareware purchase program, which supports our drive to create shareholder value. We also continue to strengthen our executive leadership team with the announcement of two new business unit presidents, and I'm encouraged by the strong hiring activity we experienced in the quarter. Finally, we are confirming all of our 2021 guidance ranges. As discussed on our last earnings call, we have three immediate priorities. Deliver on our customers' critical missions, close out legacy critical infrastructure programs, and drive organic revenue growth. In terms of delivering on our customers' critical missions, we continue to receive strong customer satisfaction scores based upon our excellent program execution. This is further validated by delivering year-to-date repeat win rates of nearly 100% and more than 90% achievement of average incentive and award fees. Our salt waste processing facility program also received notable recognition as a finalist for 2021 Project of the Year by the Project Management Institute. Although we take much pride in our program performance, as I indicated last quarter, one of our top priorities is complete legacy critical infrastructure programs awarded prior to our May 2019 IPO, which contain work we no longer pursue, such as prime construction. During the third quarter, we had two legacy programs that experienced write downs, the details of which George will discuss in a moment. Overall, as discussed on prior quarter earnings calls, we've reduced our project risk profile by not priming construction work and enhancing program performance oversight. We've made meaningful progress in the quarter towards the completion of several of these legacy critical infrastructure programs. In terms of our organic growth priority, we remain focused on moving up the solutions integrator value chain and bidding and winning larger prime contracts. I'm pleased to report that we achieved significant progress during the third quarter as demonstrated by our sequential organic growth of 7% and positive hiring trajectory. We continue to win large deals that are tied to the administration's commitment to deter near-peer threats and support environmental, social, and governance, or ESG, initiatives and advance the nation's infrastructure. During the third quarter, we achieved a book-to-bill ratio of 1.1 times on an enterprise basis, as well as in both segments. This comes one quarter after reporting a record quarterly book-to-bill ratio in Q2 for both Parsons and our federal solutions segment. Also, in our critical infrastructure segment, we have had four consecutive quarters with a book-to-bill ratio over 1.0 times, resulting in a trailing 12-month book-to-bill of 1.2 times. In the federal solution segment, we achieved a trailing 12-month book-to-bill ratio of 1.4 times, and overall for persons, a 1.3 times trailing 12-month book-to-bill ratio. It's also worth highlighting that we won five single-award contracts worth more than $100 million during the third quarter, which is the most in a single quarter in persons' history. We were awarded a single award IDIQ contract with a $953 million ceiling value under which persons will lead an industry team to design, procure, integrate, operate, and maintain air base air defense systems across the European and African continents in support of the United States Air Force. This win shows our ability to move up the solutions integrator value chain. We were awarded a $556 million repeat contract with a classified customer. This win further demonstrates our track record of securing our critical repeat contracts. We were awarded a $145 million contract with the Army Corps of Engineers to develop a facility to treat hazardous energetic waste streams from the Radford Army Ammunition Plant. This is another important environmental remediation win that underpins our ESG strategy. We were also awarded a $139 million contract by the Space and Missile System Center for satellite operations, prototyping, and integration for support and delivery, network, infrastructure, hardware, and architecture solutions. We continue to be a technology disruptor in the space market. In addition, we were awarded a $126 million contract with Saudi Arabia's Ministry of Housing to provide program management services for the development of affordable housing. During my visit in the Middle East last month, I was pleased to see the robust infrastructure growth opportunity that exists. We also won prime positions on six multiple award IDIQ contracts. two of multi-billion dollar ceiling values, and four of ceiling values between $50 and $250 million each. As we've indicated on prior earnings calls, we continue to be conservative in our approach to bookings on large single award contracts, and we often do not book the entire contract value. In addition, we only book awards under multiple award IDIQ vehicles as we win specific task orders. In addition to winning a significant amount of new business, we are focused on hiring and retaining the best talent to drive organic revenue growth. In our last earnings call, I reported on the hiring of our new Chief Human Resources Officer, or CHRO. Since that time, we've made several additional strategic hires, including a recognized growth leader to run our critical infrastructure connected communities business unit. We also promoted our proven performer in driving organic growth to lead our federal solutions engineered systems business unit. In addition, we achieved notable success in increasing our billable hiring during the quarter, producing our best hiring months in August, September, and October in the last two years. And in spite of the competitive hiring market, our attrition has remained flat and in line with industry average. In just a short period of time, the changes implemented by our new CHRO have yielded encouraging results in both hiring and retention. We continue to maintain our robust balance sheet, which supports our internal and external investments to drive growth and increase shareholder value. During the third quarter, we closed our strategic Blackhorse solutions and Echo Ridge acquisitions. In terms of our markets, we will remain well positioned for future spending priorities in both segments with strong alignment to macro environment trends. In federal solutions, we continue to win work in areas that are aligned with the Biden administration's cyber, C5ISR, artificial intelligence, missile defense, and space priorities. Within critical infrastructure, we expect to benefit from increased investments with or without the United States infrastructure bill. In this segment, our sustainable solutions are aligned with the administration's priority infrastructure and ESG initiatives in transportation, environmental remediation, water and wastewater treatment, and the elimination of emerging contaminants. We are also well-positioned to offer secure and resilient infrastructure, given our extensive federal cybersecurity credentials. In addition, we see growing infrastructure demand in both Canada and the Middle East. In summary, we accomplished a great deal against our strategic objectives in the third quarter. We reported strong sequential organic revenue growth, won a significant amount of new business tied to national security and ESG priorities, made important improvements in both hiring and retention, continued to deliver mission success for our customers, and achieved solid margins in our core markets. As I look forward, I remain very excited about our outlook. We're well positioned in two growing, enduring, and profitable segments. We've solidified our core business with the $2.2 billion teams and $550 million classified repeat wins, as well as other new business wins in the third quarter. We've upgraded talent in key areas and made notable strides in recruiting and retention to drive organic growth. We remain confident in our ability to achieve our 2021 guidance ranges and believe the momentum we're seeing across both segments will continue to build as we move through the fourth quarter and into 2022. With that, I'll turn the call over to George to discuss our third quarter financial highlights. George?