Parsons Corporation (PSN) Earnings Call Transcript & Summary

Good afternoon, everyone. Thanks for joining in, and welcome back to the aerospace defense track at the 2021 JPMorgan Industrials Conference. We're going to continue this afternoon with Parsons Corporation. We're very glad to have him here and grateful to have Carey Smith, President and COO; and also George Ball, CFO. And welcome to you both. Thanks for being here. And I guess, maybe Carey, I'll hand it over to you for a brief introduction to the company, and then we'll come back and we'll do some Q&A.

Okay. Thank you very much, Seth. We really appreciate the invitation to be at today's conference. I'd like to start off with just a brief overview of Parsons. Our company was founded in 1944. Today, we have just under 16,000 employees, and they're located in 26 different countries around the world and all 50 states. We also have 3,200 of these employees that are highly cleared personnel. Over the last 4 years, our company has undergone a significant transformation, and that was done through both organic investment as well as through M&A activities. We transitioned from what we call a project-enabled company, which was largely services focused to a company now that's solutions enabled. We lead with technology and creative engineering. We've spent internal investment. In fact, we've increased our internal investment by 20 times since 2016, and we're focused on areas, including advanced sensing, command and control, high-speed packet processing, artificial intelligence and machine learning, joint all domain operations and then convergence of cyberspace and electronic warfare into an information warfare environment. Our M&A strategy has been complementary with our technology investment approach, and it supported that organic growth. It's enabled us to have a top position in mission-focused, high-growth markets, and I'd like to point out that we have made 4 acquisitions since 2018. Those include: Polaris Alpha, which brought us capabilities in space, cybersecurity and some advanced technologies; OG Systems, which brought geospatial intelligence, red analytics and immersive engineering processes; QRC Technologies, a leader in radio frequency, situational awareness, spectrum analysis and targeting; and Braxton Technologies, our most recent, which we're glad to add to the portfolio. Braxton brings enterprise ground system capabilities as well as assured position, navigation and timing systems. One important thing I'd like to point out about these acquisitions is it's help changed our culture. Our culture is one that is agile, innovative and disruptive. I always like to say, we have the strong capabilities of a small business to be able to provide responsive solutions, but with the breadth and depth of a large company so that we can bid and win large, major prime opportunities. Today, we have a balanced portfolio between our Federal Solutions and our critical infrastructure segments, roughly 50-50 on revenue and roughly 50-50 on margin. We operate under those 2 segments, and we operate with 6 business units. We have 4 business units within the federal, and we have 2 business units within critical infrastructure. Within Federal, we have cyber intelligence, where we're focused on providing offensive and defensive cyber solutions predominantly for Department of Defense and intelligence community customers. We have space and geospatial solutions, where we perform space situational awareness, small satellite launch and integration and payload development, and enterprise ground systems. We have a missile defense and C5ISR group, which supports the missile defense agency with systems engineering, weapons and missile systems, and battle management command and control capabilities, and we provide C5ISR support throughout the world for combatant commands. We also have a group that's focused on engineered systems, and they do complex program management for programs such as the Department of Energy's salt waste processing facility. We're also involved in providing program management support for the United States Postal Service, Department of Labor and the Federal Aviation Administration, one of our largest contracts. And we perform life sciences capabilities, including pandemic response, biosurveillance and infectious disease control. Our critical infrastructure segment is comprised of 2 business units: mobility solutions, which performs dams, bridges, water projects, industrial programs and tunnels; and our connected communities organization, which performs intelligent transportation system work, smart cities work as well as some other capabilities in digital transformation such as vehicle inspection. Our strategy is -- of being a solutions integrator has positioned Parsons to prime and win major procurements as well as program of record. I just want to quickly mention a few of those that we won in 2020. In Federal, we were awarded the Combat and Command Mission support contract, our largest cyber contract ever at $590 million. This leveraged the acquisitions of all of our companies: Parsons, Polaris Alpha, OGSystems and QRC Technologies. we were also awarded a classified space contract called Hidalgo for $307 million. This leveraged the acquisitions of Polaris Alpha and OGSystems. And finally, we won over $200 million of other transaction agreements and are now a holder of 31 consortium memberships. In critical infrastructure, we had some significant wins, too. And I'd like to highlight our most recent there, which is the Edmonton light rail transit that will connect the East part of Edmonton to the West part of Edmonton, a $1.2 billion rail and transit program. We were also awarded over $100 million in other rail and transit projects last year, including BART in the TransLink Broadway line, which is a driverless transit system. So today, Parsons has strong positions in high-growth markets. We feel we're in the right markets. When you look at our federal markets, they're all growing at greater than 5% compound annual growth rate with our Cyber & Intelligence and Space markets growing at a 12% compound annual growth rate. We have an aggregate market compound annual growth rate across both segments of 7.4%. We're also positioned in large addressable markets. And our addressable market apertures $110 billion, which cyber leads with a $30 billion size. But across each of our business units, we have an addressable market of at least $10 billion for each. And we're aligned with the Biden administration priorities, including having green infrastructure and clean energy. We have a strong bid pipeline. We have over $40 billion of bids that we plan to submit and in 2020, we submitted $12 billion of bids. In 2021, we'll be submitting $24 billion of bids. We also have a strong, consistent book-to-bill and win rates across both of our business segments. So I'll conclude and turn back over to you, Seth, but I would say, in summary, it's an exciting time to be at Parsons.

Excellent. Appreciate it. We'll follow-up with some questions, and we had a helpful presentation last week in the investor presentation. When we think -- you've given some guidance for the year here in 2021. When we think about federal Solutions and the growth that you expect there, what are the key drivers for the near-term in 2021? And then as you look out beyond this year and we think about defense budget that's probably kind of flattening out at best, what would allow Federal Solutions to keep growing?

Sure, Seth. Thanks. In 2021, we expect to have continued growth in our 3 high-growth markets: cyber and intelligence, Space and Geospatial Solutions and missile defense and C5ISR. These 3 markets have achieved a trailing 12-month book-to-bill of 1.5x, which we're proud of. And we think that, that trajectory is going to continue. When you look at demand, particularly in cyber, some of the recent attacks, such to solar winds, the water attack that accrued in Florida, the most frequent one with the Microsoft vulnerabilities, cyber is an area that's going to have continued investment, both for the defense and the intelligence community, but also for critical infrastructure protection and segments that we participate in, like transportation, the utility sector, the water sector and others. In the space area, we're going to continue in our small satellite launch and integration effort. We've had 2 successful launch and integrations thus far, 100%. And we have 2 additional launches planned for this year. So that's a growth area for us as well. Likewise, space situational awareness is important. It's not enough anymore to be able to detect, track and identify assets that are up in space. But the United States really has to be able to prepare for a war in space and able to win one should that occur. And then in the missile defense and C5ISR area, our work with the missile defense agency continues to be very focused on the hypersonic defense threat as well as coming up with new architectures to make our missile defense system more effective. In ISR, we're focused on how do we do more identification and intelligence gathering so that decisions can be made at a quicker time. These are all growth areas for Federal. For 2021 and beyond, as you mentioned, the defense budget projected to be flat to perhaps slightly down. But we're positioned in the markets that are basically insulated from budget reductions. Many of the trade-offs that are going to be made on -- or how much legacy systems have been versus modernization. And because we're not an OEM provider of a platform or systems, but rather, we're involved in the software and the networking aspect and particularly on areas of growth markets, we still see that our markets have very strong CAGRs, as I mentioned, cyber and space, both at 12%.

Yes. No, that's helpful. And very much aligned with the priorities that DoD talks about. I wonder if it's possible to get into it a little bit more, and I know this can be a difficult area to speak about in public. But in cyber, what do you think are the advantages in terms of what Parsons does that have allowed you to be successful? And what kind of differentiates your offerings there? Everyone kind of talks about cyber. Everyone is involved in cyber. It's sometimes hard for those of us who are on the outside to have a good understanding of what's differentiating. So any color you can provide on that topic would be helpful.

Certainly. Great question, Seth. First, I would say that we're very heavy into offensive cyber, about 75% of our business is offensive. And if you perform offensive, you are best positioned to perform defensive. Because you understand where the vulnerabilities are. I would also highlight that across both offensive and then defensive, we're involved in producing platforms. We also performed cyber operations, and we developed cyber tools. So we're involved in all 3 of those areas. In addition, we're one of the few companies that can accomplish the convergence problem of electronic warfare with cyber with space because we have all 3 of those under the same umbrella at Parsons. We also participate on weapon system resiliency and space resiliency. All aspects of space for resiliency from satellite constellations to the network links to the round system capabilities. So we do feel that we're differentiated in cyber. And I would add one in as well for the critical infrastructure sector. We look at the critical infrastructure sector, and we say, where do we have a large installed base which has -- is the highest threat driven, which is kind of the highest area to entry. So when you look at that across Parsons as a provider of transportation systems, as a company that supports utilities and the water sector under our industrial segment and a company that provides extensive facility experience, we're very well postured to provide cyber to those customers. And aviation and rail in transit as well. You have to understand how those domains work to be able to secure them. We understand how the domains work, and we have the technology to secure them.

Okay. That's very helpful. I'm curious if you're able to say, do you already see kind of additional resources. Maybe it's too early for them actually to be available, but kind of coming into place, following Solar Winds and as the government looks to focus more on protecting these systems?

Yes. I mean, the most recently, I was under the pandemic response that just got approved. There was an additional $1 billion for the technology modernization fund to help with IT modernization. There are also -- the DHS CISA budget is projected to increase by about 30%, and they obviously are going to be at the forefront of that public-private intersection. So indeed, we are seeing funds that are being applied.

Okay. Excellent. And then you mentioned space as an area of focus, and that's obviously an area of focus for the defense department as well. I guess, if you could talk about the LEO opportunities that you mentioned and the role that Parsons plays in, I guess, is it kind of getting -- is it getting constellations into orbit or sort of managing in them when they're in orbit, kind of where does Parsons fit in?

So we play in 2 areas. One is we do small satellite payload development. That work is classified, but that's one area. The second area that we participate in is launch and integration. So about 2 years ago, we were awarded a contract with the Air Force space and missile command, which is to multi-manifest a small satellite with a large satellite mission. So we had our first 2 missions that were accomplished last year, both were successful. There were a couple of firsts in this. I mean, it was the first time that the small satellite payload deployed first, which was good. We also have the capability to manifest not just one small satellite, but both small satellites. So this year, we're going to be performing 2 missions. We have one coming up in March with an AEHF satellite. We have a second one coming up in September with a Landsat satellite system. What's exciting about the latter one is we will have 18 cube sats that we will be multimanifesting with that satellite.

Okay. That's very interesting. Do you find that space getting more competitive now? I mean, it's probably -- maybe it's not in sort of the more classified areas that you work in. But are you seeing new entrants come in? And to the extent that you are kind of -- what gives you confidence in being able to maintain the share and positioning that you have?

Yes. So I would say on the launch side, you're definitely seeing more entrants, particularly commercial companies. LEO is becoming a very crowded space. I would say from where we sit, that's an opportunity for us because we -- there's more missions going up, there's a need for more launch capability. But I would also highlight our space situational awareness capability. We've been performing that for nearly 2 decades. We've developed over 150 applications. We have users in the Department of Defense, the intelligence community and the commercial world. So space becomes more contested and more congested, there's a need for that space situational awareness and even things like tracking orbit debris that's occurring. We're fortunate that the areas that we play in as LEO increases, our areas are going to increase.

Yes. Okay. Excellent. And then I think recall seeing in your presentation some talk about you guys do some analysis of geospatial intelligence. And what role -- is that considered part of the space business or is that separate?

It's part of the space business. So we were very strong in other areas of intelligence like SIGINT and MASINT, OSINT. And so our acquisition of OGSystems was really to get that GEO capability within our portfolio. Most of our work that we do there is with the NGIA customer, and we've been supporting that again for decades. And our focus going forward will be on how do we get better automation through that? How do we drive open system integration through that? How do we work with commercial partners?

Right. Okay. Yes. And I guess that's what I was going to ask is, is there a way to -- or is the focus of the customer on being able to just pull in a lot more data given that perhaps there's potential to use artificial intelligence to analyze more data, whereas in the past, it wasn't possible to do that.

So yes. I would say -- and you hit, Seth, on the 2 points that are key. It's getting more data, but it's also making sure that, that data is actionable. So you're not just throwing an analyst a whole ton of data, but that you're using artificial intelligence and automated means to sift through the data so that it's immediately actionable.

Right. Okay. And can you talk about how the, I think, the latest acquisition, Braxton, fits in?

Certainly. So Braxton is part of our Space and Geospatial systems portfolio. And again, we were very excited about acquiring Braxton, particularly with the play that they have on enterprise ground systems. So where the Department of Defense is focused in the future is not to have stand-alone systems that don't talk to each other and communicate with each other, but rather develop a common command and control system within a common platform on an enterprise ground system. That's really what Braxton brought to the table. Braxton also has been involved in over 170 spacecraft missions and across 7 continents. So just tremendous asset. And along, I always like to say the string of pearls, how do we connect and be able to provide that end-to-end solutions technology capability. Braxton really fit some niches for us. We've already been able to submit our first joint proposal together.

Okay. Excellent. And that kind of fits into, I guess, the last area that you mentioned among the high-growth portions sort of being the C5ISR, and the focus tends to be, as you say, breaking down silo of communications. And so can you talk about the opportunity for Parsons in something like JADC2? And I know that's a place where a lot of companies are looking to do work, and there have been some contracts lag with a large number of participants. But it sounds like something that's a key focus area for you. And so maybe how does the company fit into that effort?

Yes, it definitely is. I mean, I would take this back to our command and control core product, which came in through Polaris Alpha. That was originally developed as a service and individual domain. So for example, we have a command and control air way of a command and control space. So over the last couple of years, we've evolved that to be more of an automated solution. And we've developed a demonstration system that we call Telos that we've been showcasing to customers, which basically, I call it a large network that connects everything. So how do you get any sensor connected to any shooter across any domain? And we feel that we have the capabilities to be a strong player in that market area. We are an awardee on the Air Force ABMs, which you point out, that does have many awards on it. We've seen a couple of task orders come out under that. But the joint all domain is a big area of focus for us, and it will definitely help the entire Department of Defense fight our adversaries in the future.

Okay. And then when we look at the profitability in Federal Solutions, their goal of expanding that margin from sort of the -- I think it's in the high 8 right now out to the mid 9s. And so what is it about the ability to either control cost or about the mix of work or what changes to enable that sort of level of margin expansion?

Yes. So first, Braxton acquisition alone adds 40 basis points. And then we have about another 30 basis points that comes in a mix where we're getting additional fixed price work that comes into the portfolio. We also have more product sales in that 30 basis points and then we're holding our costs flat while our revenue increases. So those would be the elements that would make that up.

Great. Okay. Excellent. And then on the infrastructure side of the business, it seems like the outlook is for sort of a modest decline this year, followed by sort of a reacceleration in the top line after that. So what's driving kind of some of the near-term pressure? And then what gives you confidence in the outlook for the years ahead?

Sure. Great question. We had about $100 million of what we call pass-through contracts. So an example of those would be positive train control and that was to meet a federal mandate, which ended at the end of 2020. And in those situations, we were buying a lot of rolling stock that basically passed through our contract. Those were not high margins. So that work is basically going to be running off. And then we have about a $10 million of COVID impact in the critical infrastructure side of the house going into this year. We will start to see that growth return in 2022. I also do want to highlight our recent Edmonton win of $1.2 billion because that will start to be material for the critical infrastructure business as well.

Okay. When you think about -- on the infrastructure side, what could come out of a stimulus -- or I guess, the next phase of the Biden administration agenda and an infrastructure-focused bill. What are the key things that we should be looking for in terms of the administration priorities that Parsons could particularly play in on the infrastructure side?

Yes. So we're looking forward to the Build Back Better bill. There has to be some action taken before the end of September, which is when the current FAST surface transportation does expire. The American Society of Civil Engineers has estimated a $4 trillion need in the United States alone. In fact, they just came out with their report card for the United States transportation and gave us a grade of C-, with some of the areas that Parsons is involved in receiving these. So there's clearly a big need there. We're also seeing a big need in Canada, where Parsons has a major presence. Québec, in particular, has put aside $8.5 billion already to invest in infrastructure. And we're seeing increased need in the Middle East where Parsons has a presence. So I would say globally, we're well postured. We've run a lot of scenarios, obviously, looked at things from -- if it's a $500 billion bill, all the way up to a $2 trillion bill, what does that mean for Parsons? The bill will be focused not just on repair and rebuild of roads, highways, but it's also going to be focused on how do you modernize those. And one area that we've been involved in is making infrastructure smart. So instead of designing for a 35-year lifespan, like most of our infrastructure is designed for today, we're now designing for a 100-year lifespan going forward.

Great. No, that's very helpful. And I guess, when we think about who the customer base is on the infrastructure side, which -- is it federal agencies that are your key customers there? And if so, which ones?

Our primary customers are state and local. So from city to states as well as provinces up in Canada. And then we also have industrial clients such as water clients, and other industrial customers like utilities. And then we sell also to aviation authorities and rail and transit authorities.

Okay. And are there opportunities -- because it sounds like maybe there's -- you mentioned understanding how some of these systems work when we were speaking earlier about the cyber part of the business. Do you try to funnel some of that knowledge of certain customer systems from the infrastructure side into the IT side of the business?

Yes. So I would say our biggest funnel to date has been federal-side technology into the infrastructure side. And then there are some markets that I may have a little comment, so I'll hit upon each of those. But on the federal-side technology, a great example is artificial intelligence, cloud computing. Those capabilities came in with our Flora South acquisition. But what we did is we applied those to our intelligent network solution, which provides intelligent transportation system, and it's the most globally deployed system. So that was a great acquisition where we acquired in Federal, but the technology has really helped on the infrastructure side. The other benefit that we get of having this portfolio together is in areas like environmental remediation, for example. One area that Parsons is heavily involved in is emerging contaminants, PFOS, PFAS, PFOA, which is receiving a lot of attention because it is in drinking water in some places. So we're involved in remediating those contaminants on both sides of the house. On the Federal, we tend to work more on identifying the compound, where on the infrastructure side, we tend to remediate more of the compound, and that's a large growing market for Parsons in both segments.

Right. And then internationally, I think -- and probably on the infrastructure side, and I think you mentioned the Middle East as being a geographical area where company does some business, I guess, how big is your business in the Middle East? What sort of drives it? And how should we think about that evolving going forward?

Sure. So from a regional perspective, about 82% of our revenues in North America and 17% would be in the Middle East. We're very excited about the rebounding oil prices that have happened recently because that's definitely helping our Middle East business. We have a long presence there. We've been involved in projects for over 50 years. And when you look at Saudi Vision 2030, in particular, they're interested in building new cities. They're interested in doing residential areas, improving basically the overall lifestyle for Saudis. And so our role is as a program manager in some of those contracts. We're also involved in rail and transit there, including the largest metro project in the world, the Riyadh Metro.

Yes, okay. And yes, I guess, as you said, the oil price will potentially be an important demand driver there. The company has spoken about, in terms of contract mix, sort of orienting the mix a little bit more toward fixed-price contracts as a way to increase the return on sales. How do you monitor the amount of risk that you're taking on as the contract mix shifts towards fixed price to kind of make sure that you don't wind up going -- bidding for contracts where costs end up larger than expected, which is -- and sometimes has been a challenge in project-based work?

Yes, terrific question, Seth. So our mix today at the Parsons' level is roughly 40% cost reimbursable, 60% fixed price less T&M. We have a very detailed risk management process in place. We have a head of risk Management that reports directly to our CEO. And just our lessons learned and we understand how to manage complex projects over our company's history, we actually prefer fixed-price contracts and feel that we have the mechanisms in place to ensure that we perform on those.

Okay. I guess, when you think about the capital structure of the company, relative to some of the peers in the federal IT services space, leverage is fairly low right now. How do you think about the right level of leverage for Parsons?

Yes. So today, to your point, we're about 0.3x leverage. We would be comfortable going up to a 2.0x to a 2.5x leverage.

Right. And then if you think about, well, what would be the reasons to add leverage to the balance sheet, I assume M&A would be probably at the top of the list. I mean, is it -- when you look at this environment, is it more that looking for opportunities and in terms of seeing really good opportunities, maybe they're difficult to come by? Or is it more that there are a lot of opportunities out there, but prices and multiples are really elevated, and so it's hard to make a deal that creates value?

We still anticipate doing about 1 to 2 acquisitions a year. We have some pretty stringent criteria. We look at companies that are growing greater than 10%, companies that have greater than 10% EBITDA margin, and companies that really connect that string of pearls that we have particularly focused on cyber and space. We would not rule out a company as well in the critical infrastructure space. We still continue to see a very good candidate pipeline. To your point, valuations do remain a little elevated still through today, but we're still quite excited about it. George, anything you'd like to add on either the leverage or the M&A question?

Yes. I agree with everything you said. We've had great success, Seth, in harvesting our supply chain, working with companies in some contractual capacity, getting to know them and then seeking them out as acquisition candidates to try to deal on an exclusive basis. Carey has an extraordinary network and knack of peeling off companies like that, and we expect that will continue.

Okay. No, that's excellent. And it sounds like -- I mean, it sounds like the companies you acquire will be accretive to both the growth rate across Parsons and to the EBITDA margin at the company as well. Okay. When you look at just the -- we've had a couple of federal IT service providers here at the conference. I guess, when you look at the overall market, what are the key ways in which you think it's changing right now and the ways that you're preparing the company for those changes?

Yes. I would say for Parsons, specifically, the way it's changing is we stay very focused on the emerging customer missions. So think about stuff that's new. I think the biggest thing is the near pure threat on the federal side that's going to drive investment and drive strategy. How do we get caught up in areas like artificial intelligence, quantum computing, having a Joint All Domain Command and Control system that we can operate across any domain. How are we going to compete in space? That will be the immediate focus. And then again, on the infrastructure side, it's just the fact that we have old infrastructure, not just in the United States, but it's aging throughout the world, and there needs to be an investment and rebound there.

Okay. I mean, those sound like good opportunities. One of the ways to grow the business on the IT side, I mean, it's a people-based business, what sort of -- what's the hiring environment like both -- in general, I think that you operate in a fairly competitive space, and people with the skills you're looking for are fairly sought after. And then, I guess, also any additional challenges that have emerged on the hiring front due to the pandemic? How have you found the ability to add the people that you need to kind of grow in some of those key areas that you talked about?

Well, first, I'd point out if there's one benefit that came from the pandemic, it is that our retention rates have improved. So that obviously helps from a need-to-hire perspective. What we've done from a hiring perspective was put unique programs in place. One is we try and get out of the D.C. Maryland, Virginia area as much to the extent that we can because that's the most difficult hiring environment. So we've set up some hubs where we've got cyber folks in San Antonio. We have cyber people in Denver. We have cyber people that are down at Fort Gordon. We've done the same in our space business, where we're really in D.C., but we're also in Colorado Springs, in Denver and Huntsville. And so kind of that -- how do I get out of the area that is the hardest, most difficult to hire. I'd also highlight our technical career path. We have a dual technical career path at Parsons that takes you up to the level of a technical fellow, and that's very attractive for people to join Parsons. And we have a very robust intern program. We hire hundreds of interns. And now, the interns that come into the company, 78% come back for full-time jobs.

Excellent. I guess, maybe, George, if we thought about the guidance that you guys have given this year for revenue and for profitability and you thought about relative to those numbers, the biggest risks and opportunities over the course of the year, what would you highlight?

Great question, Seth. The things that, frankly, I and the management team always worry about are the external factors. We think we've got a pretty good fix on the business. We work extensively out of backlog, a good pipeline of bidding opportunities. So what we do is we stress test about any external issues that might occur. We clearly didn't see the pandemic coming, but I think the way in which the management team worked through that in a very skillful and thoughtful fashion holding guidance through the year and delivering on our commitments, was frankly extraordinary. I have a lot of reasons to be proud to be part of the Parsons team, but that would be way up on the list.

Okay. Yes. No, absolutely, that is striking. I guess, what was the -- as you address the pandemic over the course of the year, what was sort of the playbook? How did it affect your business most, and what did you do to mitigate the impact?

Well, the first thing we did was to make sure that our employees were all safe and healthy. That was the most important. We produced, for example, 3D-printed masks. We got those deployed immediately out to our folks in the field that had to continue working. We encouraged everybody to work at home. We've run surveys. In fact, 90% of people voted they're productive at home as they were in the office, which is a great indicator. Our IT department did a phenomenal job of making sure that all 16,000 employees globally were up and running at home. And they created what they call an engineer work-from-anywhere initiative, where it's basically a virtual design environment. And our engineers can design collectively together. We also were lucky that we already had in place a DevsecOps virtual environment, which is secure, that enabled our folks on the federal side to be able to continue to do their jobs. I think some of the changes will be permanent. I'm not sure we'll ever get back to a total state of 100% of people back in offices. I think you're going to see less travel going forward because people have realized that took away a lot of their productive time and it hurt. So -- and I do believe there's going to be a lot more health screening. Like we got used to after 911 going through security screening in an airport. I do believe now you're going to go through a health screening effort to get into conferences, to get it into events, to get in the airports. I think our aviation system is going to be reinvented, our rail and transit is going to be reinvented. So this pandemic really will have a long life.

I guess, maybe asking about that because we also have talked a fair amount about aerospace at this conference. Are those -- do you have customers in that aviation area in terms of airports? And how you think about that business kind of recovering off of the bottom here? What signals you're looking for, and anything you're seeing thus far?

Yes. So first, we performed over 400 airport projects in the history of Parsons. We're very active at major airports today, including Baltimore, Washington International, Houston, Miami and others. What we've seen is that there was kind of a slowdown as people quit traveling basically throughout the years, but there is an intent now to get more into the planning phase. So it's how do I redesign that airport experience from the point that a person parks their car so they walk into the terminal, to they go through baggage handling, to they get to their gate and everything else in reverse. Because you try and think about how are you going to make it contactless? How are you going to ensure that people are coming in and they don't have diseases getting on planes. That whole aviation experience and that reinvention is what we're particularly excited about because, again, we understand how airports operate.

Right. Okay. And then, I guess, we're getting close to the time, but maybe another question in that vein in terms of infrastructure projects and dealing with state and local customers, have you found that some of the some of the physical challenges that those customers have had as a result of the pandemic have had an impact on the way that they are starting to look at infrastructure spending? Or given the potential for federal support, the openness of the capital markets, the anticipated economic growth coming out of the pandemic that the mindset is still toward doing most of these projects as opposed to having to wait and see?

So we did experience a little impact on mostly our aviation and our rail and transit. But on our mobility solutions, because city states and counties have not become dependent on a federal infrastructure bill for the last 10 years, they found other ways to raise money. And when you look at the programs that we participate in, they're typically funded by bonds or public-private partnerships because we're involved in the very large efforts. So those programs have all pretty much continued. And at the state level, they found ways to collect money through taxes and other means.

Okay. Excellent. Well, we're coming up on the time now, so I'll let you both go. But very much appreciate you being with us. Appreciate the time and your insight, and thanks for sharing some information about Parsons with us.

Thank you very much, Seth, for inviting us. We appreciate it.

Thank you.

Thank you. Okay. Bye-bye.