EX-99.1 3 dex991.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

 

For additional information contact:

   

Joseph Cormier

  Mark Root

Vice President, Corporate Development

  Executive Director, Corporate Communications

703-218-8258

  703-218-8397; cell: 571-259-1169

joe.cormier@mantech.com

  mark.root@mantech.com

ManTech Reports 2007 First Quarter Results

 

   

Revenue of $294.3 million, operating income of $21.4 million, income from continuing operations of $13.4 million ($0.39 diluted earnings per share)

 

   

Raises 2007 revenue guidance to $1.27 - $1.31 billion and maintains diluted earnings per share guidance of $1.76 - $1.84

 

   

Contract awards of $300 million in the first quarter

 

   

Total backlog of $2.94 billion, up over 31% from the first quarter of 2006

 

   

SRS acquisition expected to close on or about May 7, 2007

 

   

New five-year $300 million revolving credit facility completed April 30, 2007

FAIRFAX, Virginia, May 1, 2007 – ManTech International Corporation (Nasdaq: MANT) today announced results for the first quarter of 2007. ManTech reported revenue of $294.3 million for the first quarter of 2007, up $19.0 million, or 6.9%, compared to $275.3 million for the same period in 2006. This represents 5.9% organic revenue growth for the first quarter based on pro forma revenue for the first quarter 2006, which reflects $2.7 million in revenue generated by GRS Solutions. 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.

Operating income in the first quarter was $21.4 million (7.3% of revenue). Income from continuing operations in the first quarter was $13.4 million. Diluted earnings per share from continuing operations were $0.39 for the first quarter.

“In the first quarter of 2007, we continued to support our customer’s missions around the world to help secure our nation from continuing international terrorist threats,” said George J. Pedersen, Chairman of the Board and CEO of ManTech International Corporation. “We believe we will continue to see strong demand for our services, and the acquisition of SRS will enhance our C4ISR and systems engineering capabilities across our national security customer base.”

SRS Acquisition

On April 9, 2007, ManTech announced the execution of an agreement to acquire SRS Technologies, Inc. for $195 million in cash. SRS is a provider of high-end, mission-critical, advanced technology systems engineering and Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) services and solutions. Their largest customers include the Department of Homeland Security, the U.S. Air

 

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Force, the National Reconnaissance Office, the National Geospatial-Intelligence Agency, the Missile Defense Agency and the Defense Advanced Research Projects Agency.

Robert A. Coleman, President and COO, ManTech International Corporation said, “The SRS acquisition deepens our position as a leading player in the national security marketplace. This is the largest acquisition we have made since going public in 2002 and it continues our trend of purchasing excellent companies in the mission-critical, advanced-technology, DOD, Intelligence Community and homeland security arena. SRS provides us access to new markets in national defense agencies which we believe will continue to play a leading role in counter-terrorism and homeland security initiatives. Lastly, SRS’ customers will now have the ability to obtain support in over 40 countries around the world.”

Headquartered in Newport Beach, CA and founded in 1970, SRS is a privately-held company with specialized domain knowledge in the areas of space-based radar and communications; chemical, biological, conventional and nuclear weapons detection and defeat programs; imagery intelligence; and aeronautic, space and information systems development. More than 85 percent of its revenue is derived from the Department of Defense, Intelligence Community and the Department of Homeland Security. SRS is well positioned in its markets with over $750 million in backlog as of March 2, 2007.

On April 20, 2007, the U.S. Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, for ManTech’s proposed acquisition of SRS Technologies. SRS will hold its shareholder meeting on May 7, 2007 to formally approve the transaction and ManTech anticipates that the acquisition will close on May 7, 2007.

Contract Awards & Backlog

ManTech had $300 million in contract awards for the quarter, including an $89 million seven-year contract with a classified customer to provide anti-terrorism support and a $79 million five-year contract to support the U.S. Army’s Global Property Management system.

As a result of the significant amount of contract awards received in 2006 and the first quarter of 2007, ManTech’s reported backlog as of March 31, 2007 was $2.94 billion, a 31.5% increase from $2.24 billion as of March 31, 2006. Funded backlog was $767 million, a 47.8% increase from $519 million as of March 31, 2006.

Key Performance Metrics

Revenue from the Department of Defense, the Intelligence Community and Homeland Security related customers accounted for 94.1% of revenue for the first quarter of 2007. ManTech’s time and materials contracts accounted for 66.1% of revenue, fixed-price contracts accounted for 10.4% of revenue and cost-plus contracts accounted for 23.5% of revenue. Additionally, Days Sales Outstanding of accounts receivable, or DSOs, were 74 days as of March 31, 2007, down from 86 days reported in the first quarter of 2006, due to improved collections processes implemented and executed throughout 2006.

Company Guidance

The Company’s initial second quarter and updated full year 2007 guidance is summarized in the table below. ManTech’s guidance does not include future acquisitions or divestitures.

Assuming a May 7 closing, ManTech expects SRS to deliver $120 million in revenue for the remainder of 2007 and will be neutral to earnings per share for the remainder of 2007. The

 

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Company expects SRS to contribute $27 million in revenue for the remainder of the second quarter. This contribution is not included in the guidance presented below.

(Dollars in millions, except earnings per share amounts)

     2nd Quarter 2007    Full Year 2007

Revenue

   $310 - $320    $ 1,270 - $1,310

Diluted Earnings Per Share from Continuing Operations

   $0.43 - $0.45      $1.76 - $1.84

Weighted Average Shares Outstanding

   34.5 million      34.6 million

The Company’s revenue guidance for the second quarter and full year 2007 reflects the continuation of strong business momentum in its core national security and defense business. The guidance range for the full year 2007 implies total revenue growth of 12% to 15% with organic revenue growth of 11% to 14%. The organic growth rate for the full year 2006 is derived by including GRS Solutions’ revenue of $8.4 million.

New Revolving Credit Facility

In conjunction with the acquisition of SRS, the Company completed a new five-year $300 million revolving credit facility on April 30, 2007 and expects to borrow approximately $170 million in connection with the completion of the SRS transaction. The facility has an accordion feature to accommodate an additional $100 million of borrowings, resulting in $400 million of total capacity. The credit facility is led by Bank of America. The new facility provides ample flexibility to fund ManTech’s growth both organically and through future acquisitions.

Conference Call

ManTech executive management will hold a conference call today at 6 p.m. EST, to discuss first quarter 2007 results and answer questions. Interested parties may access the call by dialing (800) 811-8830 (domestic) or (913) 981-4904 (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 10 p.m. today and will remain available through midnight, May 15, 2007. To access the replay, call (888) 203-1112 (domestic) or (719) 457-0820 (international). The confirmation code for the replay is 5524860. 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; the Departments of Defense, State, Homeland Security and Justice; the Space Community 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; has developed a secure, collaborative communications system for the U.S. Department of Homeland Security; and builds and maintains secure databases that track terrorists. The company operates in the United States and over 40 countries worldwide. In 2005, Red Herring magazine selected ManTech as one of its Small Cap 100 Companies; and in 2006, Business 2.0 magazine named ManTech one of its 100 Fastest Growing Technology Companies. Additional information on ManTech can be found at www.mantech.com.

 

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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: failure to successfully integrate recently acquired companies or businesses into our operations or to realize any accretive or synergistic effects from such acquisitions; adverse changes in U.S. government spending priorities; failure to retain existing U.S. government contracts, win new contracts, or win recompetes; adverse changes in our mix of contract types; adverse results of U.S. government audits of our government contracts; adverse effect of contract consolidation; risk of contract performance or termination; failure to obtain option awards, task orders or funding under contracts; 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 Factors “ in ManTech’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2007, and, from time to time, in ManTech’s other filings with the Securities and Exchange Commission, including among others, its reports on 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.

 

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MANTECH INTERNATIONAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

 

     (unaudited)  
     March 31,
2007
    December 31,
2006
 

ASSETS

    

CURRENT ASSETS:

    

Cash and cash equivalents

   $ 34,117     $ 41,510  

Receivables—net

     243,200       236,445  

Prepaid expenses and other

     13,254       13,581  

Assets of operations held for sale

     —         3,373  
                

Total Current Assets

     290,571       294,909  

Property and equipment—net

     14,705       13,881  

Goodwill

     238,522       238,322  

Other intangibles—net

     38,401       40,180  

Employee supplemental savings plan assets

     15,381       15,427  

Other assets

     10,466       10,533  
                

TOTAL ASSETS

   $ 608,046     $ 613,252  
                

LIABILITIES AND STOCKHOLDERS' EQUITY

 

CURRENT LIABILITIES:

    

Accounts payable and accrued expenses

   $ 56,957     $ 72,125  

Accrued salaries and related expenses

     36,826       47,356  

Deferred income taxes-current

     31       140  

Billings in excess of revenue earned

     7,497       5,284  

Liabilities of operations held for sale

     —         1,815  
                

Total Current Liabilities

     101,311       126,720  

Accrued retirement

     16,393       16,750  

Other long-term liabilities

     3,931       3,302  

Deferred income taxes—non-current

     9,265       7,464  
                

TOTAL LIABILITIES

     130,900       154,236  
                

COMMITMENTS AND CONTINGENCIES

     —         —    

STOCKHOLDERS' EQUITY:

    

Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 19,734,353 and 19,020,181 shares issued at March 31, 2007 and December 31, 2006; 19,491,313 and 19,020,181 shares outstanding at March 31, 2007 and December 31, 2006, respectively

     197       190  

Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 14,479,553 and 15,032,293 shares issued and outstanding at March 31, 2007 and December 31, 2006, respectively

     145       150  

Additional paid-in capital

     277,526       263,409  

Treasury stock, at cost

     (9,114 )     —    

Retained earnings

     208,727       195,604  

Accumulated other comprehensive loss

     (118 )     (120 )

Unearned ESOP shares

     (217 )     (217 )

Deferred compensation

     —         640  

Shares held in grantor trust

     —         (640 )
                

TOTAL STOCKHOLDERS' EQUITY

     477,146       459,016  
                

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

   $ 608,046     $ 613,252  
                

 

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MANTECH INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands Except Per Share Amounts)

 

    (unaudited)  
    Three months ended March 31,  
    2007     2006  

REVENUES

  $ 294,285     $ 275,306  

Cost of services

    246,903       227,807  

General and administrative expenses

    26,019       24,766  
               

OPERATING INCOME

    21,363       22,733  

Interest (income) expense, net

    (327 )     792  

Other (income) expense, net

    (12 )     79  
               

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

    21,702       21,862  

Provision for income taxes

    (8,334 )     (8,592 )
               

INCOME FROM CONTINUING OPERATIONS

    13,368       13,270  

(Loss) from operations of discontinued component, net of taxes

    (458 )     (1,135 )

Gain on sale of discontinued operation, net of taxes (sold to Chairman and CEO)

    338       —    
               

(Loss) from discontinued operations, net of taxes

    (120 )     (1,135 )
               

NET INCOME

  $ 13,248     $ 12,135  
               

BASIC EARNINGS (LOSS) PER SHARE:

   

Class A common stock

   

Income from continuing operations

  $ 0.39     $ 0.40  

(Loss) from discontinued operations, net of taxes

    —         (0.03 )
               

Class A basic earnings per share

  $ 0.39     $ 0.37  
               

Weighted average common shares outstanding

    19,306       18,053  
               

Class B common stock

   

Income from continuing operations

  $ 0.39     $ 0.40  

(Loss) from discontinued operations, net of taxes

    —         (0.03 )
               

Class B basic earnings per share

  $ 0.39     $ 0.37  
               

Weighted average common shares outstanding

    14,570       15,065  
               

DILUTED EARNINGS (LOSS) PER SHARE:

   

Class A common stock

   

Income from continuing operations

  $ 0.39     $ 0.39  

(Loss) from discontinued operations, net of taxes

    —         (0.03 )
               

Class A diluted earnings per share

  $ 0.39     $ 0.36  
               

Weighted average common shares outstanding

    19,771       18,463  
               

Class B common stock

   

Income from continuing operations

  $ 0.39     $ 0.39  

(Loss) from discontinued operations, net of taxes

    —         (0.03 )
               

Class B diluted earnings per share

  $ 0.39     $ 0.36  
               

Weighted average common shares outstanding

    14,570       15,065  
               

 

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MANTECH INTERNATIONAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

     (unaudited)  
     Three months ended March 31,  
     2007     2006  

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net income

   $ 13,248     $ 12,135  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Loss from discontinued operation, net of tax

     458       1,135  

Gain on sale of discontinued operation, net of tax

     (338 )  

Unrealized loss on warrants

     35       —    

Stock-based compensation

     1,569       1,240  

Tax benefits from exercise of stock options

     79       395  

Deferred income taxes

     (2,161 )     (558 )

Depreciation and amortization

     2,591       2,321  

Change in assets and liabilities—net of effects from acquired and disposed businesses:

    

Receivables-net

     (6,755 )     (24,676 )

Prepaid expenses and other

     4,180       (876 )

Accounts payable and accrued expenses

     (15,168 )     2,486  

Accrued salaries and related expenses

     (10,530 )     (4,662 )

Billings in excess of revenue earned

     2,213       264  

Accrued retirement

     (357 )     865  

Other

     736       411  
                

Net cash flow from operating activities of continuing operations

     (10,200 )     (9,520 )

Net cash flow from discontinued operations

     (1,562 )     (1,967 )
                

Net cash flow from operating activities

     (11,762 )     (11,487 )
                

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Purchases of property and equipment

     (1,224 )     (1,433 )

Investment in capitalized software for internal use

     (764 )     (370 )
                

Net investing cash flow from continuing operations

     (1,988 )     (1,803 )

Net investing cash flow from discontinued operations

     3,000       —    
                

Net cash flow from investing activities

     1,012       (1,803 )
                

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Proceeds from exercise of stock options

     3,385       2,416  

Excess tax benefits from the exercise of stock options

     505       545  

Excess tax benefit from distribution of shares held in grantor trust

     8,581       —    

Treasury stock acquired

     (9,114 )     —    

Net increase in borrowing under lines of credit

     —         9,500  

Repayment of notes payable

     —         (38 )
                

Net cash flow from financing activities

     3,357       12,423  
                

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

     (7,393 )     (867 )

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

     41,510       5,678  
                

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 34,117     $ 4,811  
                

 

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