EX-99.1 2 dex991.htm PRESS RELEASE Press Release

EXHIBIT 99.1

 

LOGO

 

FOR IMMEDIATE RELEASE

 

For additional information contact:

 

Joe Cormier   Mark Root
Vice President, M&A and IR   Executive Director, Corporate Communications
703-218-8258   703-218-8397; cell: 703-407-9393
joe.cormier@mantech.com   mark.root@mantech.com

 

ManTech Reports 2005 Third Quarter Results

 

  Third quarter revenues increased 26.5% to $262.4 million

 

  Organic revenue growth of 18.3% in the third quarter

 

  Third quarter EPS from continuing operations of $0.39, an increase of 21.9%

 

  Record contract awards of over $570 million

 

  Backlog of $1.92 billion as of September 30, 2005

 

  DSO of 81 days as of September 30, 2005

 

FAIRFAX, Virginia, November 3, 2005 – ManTech International Corporation (Nasdaq: MANT), a leading provider of innovative technologies and solutions focused on mission-critical national security programs for the Intelligence Community and the Departments of Defense, State, Homeland Security, Justice and other federal government customers, today announced results for the third quarter of 2005.

 

ManTech reported revenue of $262.4 million for the third quarter of 2005, up $55.0 million, or 26.5%, compared to $207.4 million for the same period in 2004. This represents 18.3% organic revenue growth for the third quarter based on pro forma revenue for the third quarter 2004, which reflects the Gray Hawk acquisition and the METI divestiture. The growth was primarily a result of the solid execution of the business strategy to focus on the high-end defense and intelligence markets in support of national security.

 

ManTech’s operating income in the third quarter 2005 was $21.8 million, up $4.2 million, or 24.4%, compared to $17.6 million for the same period in 2004. Operating margin for the quarter was 8.3%. Net income from continuing operations in the third quarter was $13.0 million, up 27.0%, compared to $10.2 million in the same period in 2004. Diluted EPS from continuing operations was $0.39 for the third quarter versus $0.32 for the same period last year, an increase of 21.9%. In accordance with generally accepted accounting principles, prior period results have been reclassified to uniformly reflect the results from continuing operations in comparative periods.

 

Diluted EPS, including a loss from discontinued operations of $1.3 million, was $0.35 in the third quarter. The loss from discontinued operations comes primarily from ManTech MSM, which is currently being marketed for sale.

 

Page 1


“ManTech continued its strong operating and financial performance in the third quarter,” said George J. Pedersen, Chairman of the Board and CEO of ManTech International Corporation. “This performance demonstrates the strength of our high-end IT, intelligence technology and engineering skillsets across our national security customer base. We believe our strategic positioning will enable us to continue to generate strong organic growth and operating margins.”

 

New Business Wins and Other Competition Updates

 

ManTech had over $570 million in new contract awards for the quarter, many with classified customers that were not announced publicly. Several of these new awards are described below:

 

  Classified contracts awards totaling over $310 million, with one contract award of over $200 million over 10-years

 

  $27.7 million 5-year contract to provide Technical Services to the U.S. Army

 

  $19.0 million 2-year contract to provide mission support to the U.S. Department of Justice, National Drug Intelligence Center (NDIC)

 

  $34.9 million 5-year contract to provide Human Systems Integration engineering, technical and management services to Naval Surface Warfare Center (NSWC), Indian Head Division

 

“The third quarter represented the culmination of numerous winning proposal efforts across our organization which provides additional backlog and operating visibility into future years,” said Robert A. Coleman, President and Chief Operating Officer, ManTech International Corporation. “We continue to see some timing delays on upcoming awards and subsequent contract starts; however, our pipeline continues to contain numerous large opportunities that should facilitate ManTech’s growth into 2006 and beyond.”

 

Key Performance Metrics

 

Given the strong award activity in the third quarter, reported total backlog as of September 30, 2005, was $1.92 billion and funded backlog was $439 million. Revenue from the Department of Defense, the Intelligence Community and Homeland Security related customers accounted for 94.9% of revenue for the third quarter of 2005. ManTech derived 79.3% of its revenue during the third quarter of 2005 from prime contracts and 38.6% of its revenue from work under GSA schedule contracts. ManTech’s time and materials contracts accounted for 66.5% of revenue, fixed-price contracts accounted for 10.0% of revenue and cost-plus contracts accounted for 23.5% of revenue. Finally, Days Sales Outstanding of accounts receivable, or DSOs, were 81 days as of September 30, 2005, down from 82 days reported in the second quarter.

 

Company Guidance

 

ManTech’s guidance for the fourth quarter and full year 2005 reflects the continuation of strong underlying trends in its national security business. ManTech’s guidance does not include any discontinued operations, future acquisitions or divestitures.

 

     4th Quarter 2005

   Full Year 2005

Revenue

   $266 million - $276 million    $985 million - $995 million

Diluted Earnings Per Share from Continuing Operations

   $0.38 – $0.42    $1.51 – $1.55

Weighted Average Shares Outstanding

   33.8 million    33.4 million

 

Page 2


Conference Call:

 

ManTech executive management will hold a conference call today at 5 p.m. EST, to discuss third quarter 2005 results and answer questions. Interested parties may access the call by dialing (800) 811-7286 (domestic) or (913) 981-4902 (international). The conference call will be Webcast (listen only) simultaneously via the Internet at www.mantech.com. Interested parties should dial in or log on approximately ten minutes prior to the start of the call.

 

A replay of the call will be available beginning at 9 p.m. today and will remain available through midnight, November 17. To access the replay, call (888) 203-1112 (domestic) or (719) 457-0820 (international). The confirmation code for the replay is 8849087. A replay will also be available on ManTech’s Website approximately two hours after the conclusion of the call.

 

About ManTech International Corporation:

 

Headquartered in Fairfax, Virginia, ManTech International Corporation is a leading provider of innovative technologies and solutions for mission-critical national security programs for the Intelligence Community and the Departments of Defense, State, Homeland Security, Justice and other U.S. federal government customers. ManTech’s expertise includes systems engineering, systems integration, technology and software development, enterprise security architecture, information assurance, intelligence operations support, network and critical infrastructure protection, information technology, communications integration and engineering support. The company supports the advanced telecommunications systems that are used in Operation Iraqi Freedom and in other parts of the world; provides the physical and cyber security to protect U.S. embassies all over the world; has developed a secure, collaborative communications system for the U.S. Department of Homeland Security; and is helping the Department of Justice’s U.S. Marshals Service deploy a common, office automation system. With projected 2005 revenues of approximately $1 billion and over 6,000 highly qualified employees, the company operates in the United States and 38 countries worldwide. In 2004, ManTech was selected by Business Week magazine as one of the Top 100 Hot Growth Companies and ranked by VARBusiness magazine as one of its Top 50 Fastest-Growing Solution Providers. Additional information on ManTech can be found at www.mantech.com.

 

Forward-Looking Information:

 

Statements and assumptions made in this press release, which do not address historical facts, constitute “forward-looking” statements that ManTech believes to be within the definition in the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties, many of which are outside of our control. Words such as “may,” “will,” “intends,” “should,” “expects,” “plans,” “projects,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or “opportunity,” or the negative of these terms or words of similar import are intended to identify forward-looking statements.

 

These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: adverse changes in U.S. government spending priorities; failure to retain existing U.S. government contracts, win new contracts, or win recompetes; uncertainties specifically related to discontinued operations, including our ability to sell or dispose of our MSM operations on terms that are favorable to us, or at all; adverse results of U.S. government audits of our government contracts; adverse changes in our mix of contract types; additional risks and costs associated with complying with new laws and regulations relating to corporate governance issues; risk of contract performance or termination; failure to obtain option awards, task orders or funding under contracts; failure to successfully integrate recently acquired companies or businesses into our operations or to realize any accretive or synergistic effects from such acquisitions; failure to identify, execute or effectively integrate future acquisitions; risks associated with complex U.S. government procurement laws and regulations; and competition. These and other risk factors are more fully discussed in the section entitled “Risks Related to the Company’s Business” in ManTech’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 16, 2005, and, from time to time, in ManTech’s other filings with the Securities and Exchange Commission, including among others, its reports on Form 8-K and Form 10-Q.

 

The forward-looking statements included in this news release are only made as of the date of this news release and ManTech undertakes no obligation to publicly update any of the forward-looking statements made herein, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise.

 

Page 3


MANTECH INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands Except Per Share Amounts)

 

    

(unaudited)

Three months ended

September 30,


   

(unaudited)

Nine months ended

September 30,


 
     2005

    2004

    2005

    2004

 
REVENUES    $ 262,431     $ 207,444     $ 719,300     $ 602,194  
COST OF SERVICES      216,260       170,241       592,130       492,728  
    


 


 


 


GROSS PROFIT      46,171       37,203       127,170       109,466  
    


 


 


 


COSTS AND EXPENSES:                                 

General and administrative

     22,327       18,871       62,510       54,501  

Depreciation and amortization

     2,008       782       5,147       3,393  
    


 


 


 


Total costs and expenses

     24,335       19,653       67,657       57,894  
    


 


 


 


INCOME FROM CONTINUING OPERATIONS      21,836       17,550       59,513       51,572  

Interest (expense), net

     (1,120 )     (423 )     (1,956 )     (1,349 )

Equity in earnings of affiliates

     157       143       435       422  

Gain on disposal of an operation

     —         —         3,698       —    

Other income (expense), net

     (52 )     18       (228 )     184  
    


 


 


 


INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTEREST

     20,821       17,288       61,462       50,829  

Provision for income taxes

     (7,833 )     (7,061 )     (24,085 )     (20,754 )

Minority interest

     (3 )     (2 )     (9 )     (5 )
    


 


 


 


NET INCOME FROM CONTINUING OPERATIONS

     12,985       10,225       37,368       30,070  

Loss from discontinued operations—net of taxes

     (1,298 )     (2,411 )     (3,612 )     (16,107 )
    


 


 


 


NET INCOME    $ 11,687     $ 7,814     $ 33,756     $ 13,963  
    


 


 


 


BASIC EARNINGS (LOSS) PER SHARE:                                 

Net Income from continuing operations

   $ 0.39     $ 0.32     $ 1.14     $ 0.93  

Loss from discontinued operations—net of taxes

     (0.04 )     (0.08 )     (0.11 )     (0.50 )
    


 


 


 


Basic earnings per share    $ 0.35     $ 0.24     $ 1.03     $ 0.43  
    


 


 


 


Weighted average common shares outstanding

     32,955,258       32,388,777       32,753,215       32,269,784  
    


 


 


 


DILUTED EARNINGS (LOSS) PER SHARE:                                 

Net Income from continuing operations

   $ 0.39     $ 0.32     $ 1.12     $ 0.93  

Loss from discontinued operations—net of taxes

     (0.04 )     (0.08 )     (0.10 )     (0.50 )
    


 


 


 


Diluted earnings per share    $ 0.35     $ 0.24     $ 1.02     $ 0.43  
    


 


 


 


Weighted average common shares outstanding

     33,477,813       32,388,777       33,221,562       32,436,648  
    


 


 


 


 

Page 4


MANTECH INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

 

     (unaudited)  
     September 30,
2005


    December 31,
2004


 
ASSETS                 
CURRENT ASSETS:                 

Cash and cash equivalents

   $ 13,288     $ 22,946  

Receivables—net

     236,011       196,086  

Prepaid expenses and other

     9,534       9,413  

Assets held for sale

     8,303       25,546  
    


 


Total current assets

     267,136       253,991  

Property and equipment—net

     12,049       8,505  

Goodwill

     226,273       153,374  

Other intangibles—net

     36,791       23,997  

Investments

     2,736       6,011  

Employee supplemental savings plan assets

     11,058       12,208  

Other assets

     11,007       10,316  
    


 


TOTAL ASSETS    $ 567,050     $ 468,402  
    


 


LIABILITIES AND STOCKHOLDERS’ EQUITY

                

CURRENT LIABILITIES:

                

Current portion of debt

   $ 75,082     $ 25,080  

Accounts payable and accrued expenses

     54,340       52,668  

Accrued salaries and related expenses

     39,110       35,004  

Deferred income taxes—current

     —         5,937  

Billings in excess of revenue earned

     8,925       5,252  

Liabilities held for sale

     3,040       2,889  
    


 


Total current liabilities

     180,497       126,830  

Debt—net of current portion

     42       104  

Accrued retirement

     12,335       13,435  

Other long-term liabilities

     2,879       5,711  

Deferred income taxes

     5,684       1,743  

Minority interest

     65       56  
    


 


TOTAL LIABILITIES      201,502       147,879  
    


 


COMMITMENTS AND CONTINGENCIES                 
STOCKHOLDERS’ EQUITY:                 

Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 17,958,055 and 17,418,950 shares issued and outstanding at September 30, 2005 and December 31, 2004, respectively.

     180       174  

Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 15,065,293 and 15,065,293 shares issued and outstanding at September 30, 2005 and December 31, 2004, respectively.

     151       151  

Additional paid in capital

     231,231       219,664  

Retained earnings

     134,466       100,710  

Accumulated other comprehensive income

     381       205  

Unearned ESOP shares

     (861 )     (381 )

Deferred compensation

     640       640  

Shares held in grantor trust

     (640 )     (640 )
    


 


TOTAL STOCKHOLDERS’ EQUITY      365,548       320,523  
    


 


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY    $ 567,050     $ 468,402  
    


 


 

 

Page 5


MANTECH INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

 

     (unaudited)  
     Nine months ended
September 30,


 
     2005

    2004

 
CASH FLOWS FROM OPERATING ACTIVITIES:                 

Net income

   $ 33,756     $ 13,963  

Adjustments to reconcile net income to net cash used in operating activities:

                

Equity in earnings of affiliates

     (435 )     (419 )

Increase (Decrease) in current and deferred income taxes

     (2,210 )     1,430  

Depreciation and amortization

     6,357       4,672  

Gain on disposal of an operation

     (3,698 )     —    

Loss from discontinued operations

     3,612       16,107  

Changes in assets and liabilities-net of effects from acquired, disposed, and discontinued businesses:

                

Contract receivables

     (23,587 )     (14,134 )

Prepaid expenses and other

     277       6,568  

Accounts payable and accrued expenses

     2,940       10,630  

Accrued salaries and related expenses

     1,220       (2,092 )

Billings in excess of revenue earned

     3,385       4,716  

Accrued retirement

     (1,100 )     1,332  

Dividends from Vosper-ManTech Limited

     357       357  

Other

     2,525       (3,495 )
    


 


Net cash flow from continuing operations      23,399       39,635  
Net cash flows from discontinued operations      14,137       (19,632 )
    


 


Net cash flows from operating activities      37,536       20,003  
    


 


CASH FLOWS FROM INVESTING ACTIVITIES:                 

Purchase of property and equipment

     (5,198 )     (3,767 )

Investment in capitalized software for internal use

     (1,144 )     (110 )

Proceeds from sales of property and equipment

     —         1  

Acquisition of businesses, net of cash acquired

     (106,638 )     (10,969 )

Proceeds from disposal of an operation

     7,000       —    
    


 


Net investing cash flow from continuing operations      (105,980 )     (14,845 )
Net investing cash flow from discontinued operations      (355 )     (364 )
    


 


Net cash flows from investing activities      (106,335 )     (15,209 )
    


 


CASH FLOWS FROM FINANCING ACTIVITIES:                 

Proceeds from exercise of stock options

     9,201       3,245  

Repayment of debt

     (60 )     (182 )

Net increase in borrowings under lines of credit

     50,000       —    
    


 


Net cash flows from financing activities      59,141       3,063  
    


 


NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS      (9,658 )     7,857  
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD      22,946       9,166  
    


 


CASH AND CASH EQUIVALENTS, END OF PERIOD    $ 13,288     $ 17,023  
    


 


 

Page 6