KBR Release Second Quarter 2021 Financial Results
Revenue of $1.5 billion, an 11% increase in the quarter, is aligned with management’s consolidated revenue guidance for the year of circa $6 billion.
Financial Highlights for the Quarter Ended June 30, 3021
- Government Solutions posted $1.2 billion of revenue in the second quarter, a 29% increase over 2020. This increase reflects 13% organic growth with each government business unit delivering organic growth from new program wins and on-contract expansion driven by strong execution. Additionally, Centauri, acquired in October 2020, recorded over $180 million of revenue in the quarter, delivering healthy organic growth of 30% on top of acquisitive growth.
- Sustainable Technology Solutions posted $0.3 billion of revenue in the second quarter, which is in line with our guided annual FY 2021 revenue expectations for this business following the company’s 2020 exit from commoditized services.
- Gross profit, operating income (loss) and adjusted EBITDA were impacted by the following:
- Gross profit and adjusted EBITDA each increased almost 50% period over period due to excellent Government Solutions organic growth, strong execution across the business and the acquisition of Centauri. Additionally, the company benefited from the net favorable resolution of and provisioning for legacy matters in Sustainable Technology Solutions that resulted in a net benefit of $16 million with attendant favorable operating cash flow.
- Operating income (loss) was impacted by a non-cash charge to equity in earnings of unconsolidated affiliates in the amount of $193 million recorded based on the progress of settlement discussions during the quarter with the Ichthys LNG client. This charge reflects KBR’s proportionate share of unfunded client change orders and claims. Consistent with the company’s practice to present adjusted earnings net of Ichthys commercial recovery and settlement costs, this non-cash charge is excluded from adjusted EBITDA and adjusted EPS. Furthermore, this non-cash charge does not impact pursuit of, or positions related to, subcontractor claims associated with the combined cycle power plant for which the company continues to expect a favorable cash award or settlement upon resolution.
- Selling, general and administrative expenses of $103 million increased $30 million compared to 2020, principally due to the acquisition of Centauri and an increase in corporate expenses associated with return to the office, increased travel and other initiatives, all in line with expectations.
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