Parsons Increasing Production of U.S. Air Force’s RADBO System

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Parsons (NYSE: PSN) has been awarded a $63 million contract modification by the U.S. Air Force for its RADBO system, bringing the total number of systems to 29. The system, including the ZEUS® directed energy system, has demonstrated high effectiveness in clearing explosive ordnance and ensuring mission success. ZEUS® has a history of neutralizing over 4,000 ordnance items with an effectiveness rate of over 99 percent, highlighting its precision and speed. The system's deployment in Iraq and Afghanistan has been important for area and route clearance missions.

Positive

• Parsons received a $63 million firm-fixed-price contract modification from the U.S. Air Force for its RADBO system.
• The RADBO system now consists of 29 systems, including the ZEUS® directed energy system.
• The system was used in the trilateral joint exercise Cope North 24, showcasing 100 percent effectiveness in rapid airfield clearance after an attack.
• ZEUS® has neutralized more than 4,000 ordnance items with an effectiveness rate of over 99 percent.
• The system has been deployed in Iraq and Afghanistan for area, route clearance missions, and IED neutralization.
• The ZEUS® directed energy system is a 3kW continuous-fire laser designed for precise detonation of various ordnance items.
• ZEUS® is agile enough for post-combat applications like humanitarian landmine clearing, route clearing, and airbase clearing.

Negative

• None.

Defense Technology Analyst

The recent contract modification awarded to Parsons for the enhancement of the RADBO system underlines a notable expansion within the defense technology sector. The system's purpose, to safely neutralize unexploded ordnance, highlights an increasing trend towards the use of advanced technologies such as directed energy systems in modern warfare and peacekeeping. The ZEUS® component, a 3kW continuous-fire laser, represents a significant technological advancement, with its precision in detonation of hazardous items demonstrating an effectiveness rate above 99 percent. This not only reduces risk to military personnel but also could lead to a paradigm shift in how explosive ordnance disposal is approached in both combat and humanitarian scenarios. The deployment and operational success of ZEUS® in varied theaters of operation, including Iraq and Afghanistan, can be seen as a proof of concept, potentially leading to further adoption of such technologies by the U.S. Air Force and allied militaries. The financial implications for Parsons are favorable, with the contract extension adding significant revenue and possibly leading to future contracts. Investors should note the company's growth potential in this niche market, which is likely to expand as geopolitical tensions necessitate advanced defense solutions.

Military Procurement Expert

From a procurement standpoint, the firm-fixed-price nature of the new $63 million contract for Parsons signifies a strong vote of confidence from the U.S. Air Force Life Cycle Management Center. The choice of a firm-fixed-price contract suggests that the RADBO system has reached a level of maturity and reliability that the Air Force is willing to commit a sizable sum without the need for cost-plus contracting, which can often lead to budget overruns. This type of contract indicates a predictable cost framework for the Air Force and clearer revenue projections for Parsons. As the total number of RADBO systems ordered increases to 29, investors should observe the scalability of production and the subsequent effects on Parsons' operational efficiency and margins. This could serve as an indicator for Parsons' ability to handle larger contracts in the future and its potential to secure a more dominant position in the defense contracting landscape. Long-term, this may translate into sustained revenue streams and potential market share growth, both critical for assessing the company's future stock performance.

Financial Analyst

The $63 million increase in Parsons' RADBO system production contract has direct implications for the company’s financial health. When evaluating Parsons' outlook, it's important to assess the impact of this infusion on the company’s revenue and earnings trajectory. Given the scale of the contract relative to Parsons' overall business, the incremental revenue can be material. Investors should look for updates in the company's future earnings reports to gauge the contribution of this contract to the bottom line. Furthermore, the successful demonstration of the RADBO system's effectiveness at Cope North 24 provides additional validation of the technology, which could lead to enhanced brand credibility and potentially draw interest from other military customers. This could further improve the revenue outlook. However, it's also important to monitor the cost of fulfilling this contract, as any inefficiencies could offset the positive revenue impact. Overall, the contract represents a positive development, but its true value to investors will be realized through consistent execution and potential follow-on orders.

The company was awarded a $63 million contract modification

CHANTILLY, Va., April 25, 2024 (GLOBE NEWSWIRE) -- Parsons Corporation (NYSE: PSN) announced today that the company has been awarded a $63 million, firm-fixed-price contract modification to its Recovery of Airbase Denied by Ordnance (RADBO) production contract by the U.S. Air Force Life Cycle Management Center. This modification brings the total number of Air Force RADBO systems to 29.

The RADBO system, which includes Parsons' ZEUS® directed energy system, provides explosive ordnance personnel improved safety by allowing the destruction of unexploded ordnance from the interior of Mine-Resistant Ambush Protected (MRAP) vehicles at distances that can exceed 300 meters in optimal conditions. The system was recently used operationally at the trilateral joint exercise Cope North 24 in the Indo-Pacific region, where it demonstrated 100 percent effectiveness and successful mission accomplishment of rapid airfield clearance after an attack. The system’s history underscores its precision at the speed of light, having neutralized more than 4,000 ordnance items with an effectiveness rate of over 99 percent. Versions of ZEUS® have been deployed to Iraq and Afghanistan for area, route clearance missions, and IED neutralization.

“The RADBO system continues to lead a shift in operational tactics and response to protect deployed warfighters and civilians and ensure their mission success,” said Mike Kushin, president of Defense and Intelligence for Parsons. “The Air Force’s continued trust in our team to deliver this lifesaving technology is something we’re proud of and will further bolster the warfighter’s advantage, improve rapid recovery of assets, and enhance force portability.”

The Parsons-developed ZEUS® directed energy system is a 3kW continuous-fire laser designed, developed, and tested for use in operational theater. ZEUS® allows for the precise detonation of small submunitions, cluster bombs, land mines, general-purpose bombs, and thick-cased artillery shells. It is also agile enough for post-combat applications, including humanitarian landmine clearing, route clearing, and airbase clearing.

To learn more about Parsons’ ZEUS® laser neutralization system, please visit parsons.com/products/zeus.

About Parsons:
Parsons (NYSE: PSN) is a leading disruptive technology provider in the national security and global infrastructure markets, with capabilities across cyber and intelligence, space and missile defense, transportation, environmental remediation, urban development, and critical infrastructure protection. Please visit parsons.com and follow us on LinkedIn and Facebook to learn how we're making an impact.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in the forward-looking statements, including, among others: any issue that compromises our relationships with the U.S. federal government or its agencies or other state, local or foreign governments or agencies; any issues that damage our professional reputation; changes in governmental priorities that shift expenditures away from agencies or programs that we support; our dependence on long-term government contracts, which are subject to the government’s budgetary approval process; the size of our addressable markets and the amount of government spending on private contractors; failure by us or our employees to obtain and maintain necessary security clearances or certifications; failure to comply with numerous laws and regulations; changes in government procurement, contract or other practices or the adoption by governments of new laws, rules, regulations and programs in a manner adverse to us; the termination or nonrenewal of our government contracts, particularly our contracts with the U.S. federal government; our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors’ protests of major contract awards received by us; our ability to generate revenue under certain of our contracts; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; changes in estimates used in recognizing revenue; internal system or service failures and security breaches; and inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements or other unfavorable outcomes. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption “Risk Factors” in our Registration Statement on Form S-1 and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statement made in this presentation that becomes untrue because of subsequent events, new information or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.

Media Contact:
Angie Benfield
+1 803.334.5277
Angie.Benfield@parsons.com

Investor Relations Contact:
Dave Spille
+ 1 703.775.6191
Dave.Spille@Parsons.com

FAQ

What contract modification did Parsons receive from the U.S. Air Force?

Parsons received a $63 million firm-fixed-price contract modification from the U.S. Air Force for its RADBO system.

How many RADBO systems are included in the contract modification?

The contract modification brings the total number of RADBO systems to 29, including the ZEUS® directed energy system.

Where was the RADBO system recently used operationally?

The RADBO system was recently used operationally at the trilateral joint exercise Cope North 24 in the Indo-Pacific region.

What is the effectiveness rate of the ZEUS® directed energy system in neutralizing ordnance items?

The ZEUS® directed energy system has neutralized more than 4,000 ordnance items with an effectiveness rate of over 99 percent.

In which countries have versions of the ZEUS® directed energy system been deployed?

Versions of the ZEUS® directed energy system have been deployed to Iraq and Afghanistan for area, route clearance missions, and IED neutralization.

What is the power output of the ZEUS® directed energy system?

The ZEUS® directed energy system is a 3kW continuous-fire laser designed for precise detonation of various ordnance items.

For what types of applications is the ZEUS® directed energy system agile enough?

The ZEUS® directed energy system is agile enough for post-combat applications like humanitarian landmine clearing, route clearing, and airbase clearing.