EX-99.1 2 dex991.htm PRESS RELEASE Press Release

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 2008 Third Quarter Results

 

   

Revenue of $486 million, up 27% over third quarter 2007 (23% organic revenue growth)

 

   

Operating income of $40.3 million, up 33% over third quarter 2007

 

   

Net Income of $23.9 million, up 37% over third quarter 2007

 

   

Diluted earnings per share of $0.67, up 31% over third quarter 2007

 

   

Record contract awards of $1.42 billion in the third quarter (29% new or add-on business)

 

   

Acquired Emerging Technologies Group, a leading provider of cyber security services

 

   

Cash flow from operations of over $66 million in the third quarter, DSO reduced to 64 days down from 69 days last quarter

 

   

Debt reduction of over $53 million during the third quarter including the funding of the Emerging Technologies Group acquisition in August 2008

 

   

Increases 2008 Full Year Revenue and EPS Guidance

FAIRFAX, Virginia, October 29, 2008 – ManTech International Corporation (NASDAQ: MANT) today announced results for the third quarter of 2008. ManTech reported revenue of $486.1 million for the third quarter of 2008, up $102.7 million, or 27%, compared to $383.4 million for the same period in 2007. This represents 23% organic revenue growth for the third quarter based on pro forma revenue for the third quarter 2007, which reflects revenue generated by McDonald Bradley and Emerging Technologies Group. The growth was primarily a result of the solid execution of the business strategy to focus on the high-end defense and intelligence markets that support our national security.

Operating income in the third quarter was $40.3 million (8.3% of revenue) up 33% compared to $30.4 million (7.9% of revenue) for the same period in 2007. Net Income in the third quarter was $23.9 million up 37% compared to $17.5 million for the same period in 2007. Diluted earnings per share were $0.67 for the third quarter, up 31% compared to $0.51 for the same period in 2007.

“Third quarter results were strong due to ManTech’s strategic positioning at the heart of the national security mission and our focus on execution,” said George J. Pedersen, Chairman of the Board and CEO of ManTech International Corporation. “Again we achieved outstanding performance across all operating metrics and our cash flow was exceptional, which provides great operating flexibility for our Company in the difficult credit and liquidity environment.”

 

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Record Contract Awards & Backlog

ManTech had record contract awards of $1.42 billion in the third quarter with 29% coming from new business or add-ons to existing contracts.

During the quarter the Company received several significant contract awards:

 

   

$820 million two-year contract with the U.S. Army TACOM Life-Cycle Management Command, Program Office to support unique and specialized Route Clearance Improvised Explosive Devices (IED) detection, removal, and troop transport vehicles for route clearance support

 

   

$151 million five-year contract with the Naval Sea Systems Command (NAVSEA) for IT support

 

   

$124 million five-year contract with the Department of State for its Global IT Modernization (GITM) program

“Our third quarter bookings were a record and year-to-date we have booked almost $2.8 billion in awards,” said Robert A. Coleman, President and Chief Operating Officer, ManTech International Corporation, “Due to our combination of recompete wins which protect our base and the large amount of new and add-on business, we look forward to continue our track record of strong organic growth into 2009 and beyond.”

Record contract awards during the third quarter drove backlog as of September 30, 2008 of $4.26 billion, which represents a 21% increase from $3.51 billion as of September 30, 2007. Funded backlog was also a record $1.21 billion, which represents a 43% increase from $846 million as of September 30, 2007.

Cash Flow and Balance Sheet Information

Days Sales Outstanding of accounts receivable, or DSOs, were 64 days as of September 30, 2008 down from 69 days as of June 30, 2008 and 74 days as of March 31, 2008. For the quarter, cash flow from operations was over $66 million. Total debt at the end of September was $45 million, with cash of $7 million, resulting in net debt of $38 million.

Emerging Technologies Group Acquisition

On August 29, 2008, ManTech closed the acquisition of Emerging Technologies Group, a rapidly growing provider of cyber security and mission critical services to the Intelligence Community and DoD. Headquartered in Herndon, VA and founded in 2001, ETG is a privately held and highly-specialized company providing computer and network forensics. ETG delivers specific expertise in SIGINT and COMINT analysis supporting the counterterrorism /counterintelligence missions around the world. All of ETG’s nearly 60 employees have high-level clearances.

Company Guidance

The Company’s initial fourth quarter and updated full year 2008 guidance is summarized in the table below. ManTech’s guidance does not include future acquisitions or divestitures.

(Dollars in millions, except earnings per share amounts)

     4th Quarter 2008    Full Year 2008

Revenue

   $490 – $510    $1,866 – $1,886

Net Income

   $24.2 – $25.2    $89.9 – $90.9

Diluted Earnings Per Share

   $0.67 – $0.70    $2.53 – $2.56

Weighted Average Shares Outstanding

   35.85 million    35.47 million

 

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Key Guidance Assumptions

 

   

Countermine revenues of $95 million in the fourth quarter and approximately $340 million for full year 2008

 

   

Interest expense of $375,000 in the fourth quarter and $3.35 million for full year 2008

 

   

Tax rate of 39.6% for the fourth quarter and for full year 2008

The Company’s revenue guidance for the fourth quarter and full year 2008 reflects the continuation of strong business momentum in its core national security and defense business. ManTech’s fourth quarter 2008 revenue guidance represents total revenue growth of 16% to 21% and pro forma organic revenue growth of 12% to 17%. ManTech’s 2008 full year revenue guidance represents total revenue growth of 29% to 30% and pro forma organic revenue growth of 18% to 19% without any future acquisitions. The organic growth rate is derived by adding 2007 revenue for SRS Technologies, McDonald Bradley and Emerging Technologies Group to ManTech’s 2007 revenue base. The Company’s fourth quarter 2008 earnings per share range represents 10% to 15% growth over fourth quarter 2007 and for the full year 2008 represents 30% to 31% growth over 2007.

Conference Call

ManTech executive management will hold a conference call today at 5 p.m. ET, to discuss third quarter 2008 results and answer questions. Interested parties may access the call by dialing (888) 737-3616 (domestic) or (913) 312-1488 (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 12, 2008. To access the replay, call (888) 203-1112 (domestic) or (719) 457-0820 (international). The confirmation code for the replay is 3312456. 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 with more than 7,600 professionals, 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, software development, enterprise architecture, cyber security, information assurance, intelligence operations and analysis support, network and critical infrastructure protection, information operations and information warfare support, information technology, communications integration, logistics and supply chain management, and service oriented architectures. 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 40 countries. In 2008, BusinessWeek magazine chose ManTech for its 2008 ‘InfoTech 100’ listing representing the best performing tech companies in the world. In 2007, ManTech was named one of BusinessWeek.com’s fastest growing tech companies; to Business 2.0 magazine’s 100 Fastest Growing Technology Companies list for the second year in a row; to the Deloitte & Touche list of the 50 fastest growing technology companies in Virginia; and a GI Jobs magazine Top Ten Military Friendly Employer. 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.

 

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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; adverse results of U.S. government audits of our government contracts; risks associated with complex U.S. government procurement laws and regulations; adverse effect of contract consolidation; risk of contract performance or termination; failure to obtain option awards, task orders or funding under contracts; adverse changes in our mix of contract types; 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; 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 17, 2008, 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Per Share Amounts)

 

     (unaudited)  
     September 30,
2008
    December 31,
2007
 
ASSETS     

CURRENT ASSETS:

    

Cash and cash equivalents

   $ 6,955     $ 8,048  

Receivables—net

     343,231       337,467  

Prepaid expenses and other

     13,952       19,104  
                

Total Current Assets

     364,138       364,619  

Property and equipment—net

     14,703       14,170  

Goodwill

     470,386       451,832  

Other intangibles—net

     79,136       82,976  

Employee supplemental savings plan assets

     16,496       17,999  

Other assets

     5,779       5,907  
                

TOTAL ASSETS

   $ 950,638     $ 937,503  
                
LIABILITIES AND STOCKHOLDERS’ EQUITY     

CURRENT LIABILITIES:

    

Current portion of debt

   $ 44,900     $ 126,000  

Accounts payable and accrued expenses

     126,934       100,447  

Accrued salaries and related expenses

     66,621       61,429  

Billings in excess of revenue earned

     8,508       8,334  
                

Total Current Liabilities

     246,963       296,210  

Debt-net of current portion

       39,000  

Accrued retirement

     17,599       18,973  

Other long-term liabilities

     7,088       7,848  

Deferred income taxes—non-current

     29,935       24,167  
                

TOTAL LIABILITIES

     301,585       386,198  
                

COMMITMENTS AND CONTINGENCIES

    

STOCKHOLDERS’ EQUITY:

    

Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 21,685,195 and 20,474,379 shares issued at September 30, 2008 and December 31, 2007; 21,442,155 and 20,231,339 shares outstanding at September 30, 2008 and December 31, 2007, respectively

     217       205  

Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 13,958,345 and 14,279,813 shares issued and outstanding at September 30, 2008 and December 31, 2007

     140       143  

Additional paid-in capital

     331,670       297,827  

Treasury stock, 243,040 shares at cost at September 30, 2008 and December 31, 2007

     (9,114 )     (9,114 )

Retained earnings

     328,379       262,686  

Accumulated other comprehensive loss

     (152 )     (147 )

Unearned ESOP shares

     (2,087 )     (295 )
                

TOTAL STOCKHOLDERS’ EQUITY

     649,053       551,305  
                

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 950,638     $ 937,503  
                

 

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MANTECH INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Thousands Except Per Share Amounts)

 

     (unaudited)     (unaudited)  
     Three months ended September 30,     Nine months ended September 30,  
     2008     2007     2008     2007  

REVENUES

   $ 486,128     $ 383,359     $ 1,376,170     $ 1,026,344  

Cost of services

     407,973       321,133       1,155,055       860,289  

General and administrative expenses

     37,831       31,804       109,127       88,791  
                                

OPERATING INCOME

     40,324       30,422       111,988       77,264  

Interest expense

     (962 )     (1,887 )     (3,573 )     (3,423 )

Interest income

     369       153       711       1,106  

Other (expense) income, net

     (223 )     (84 )     (355 )     262  
                                

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     39,508       28,604       108,771       75,209  

Provision for income taxes

     (15,644 )     (11,129 )     (43,078 )     (29,262 )
                                

INCOME FROM CONTINUING OPERATIONS

     23,864       17,475       65,693       45,947  

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

     —         —         —         (458 )

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

     —         —         —         338  
                                

(Loss) from discontinued operations, net of taxes

     —         —         —         (120 )
                                

NET INCOME

   $ 23,864     $ 17,475     $ 65,693     $ 45,827  
                                

BASIC EARNINGS (LOSS) PER SHARE:

        

Class A common stock

        

Income from continuing operations

   $ 0.68     $ 0.51     $ 1.88     $ 1.35  

(Loss) from discontinued operations, net of taxes

     —         —         —         —    
                                

Class A basic earnings per share

   $ 0.68     $ 0.51     $ 1.88     $ 1.35  
                                

Weighted average common shares outstanding

     21,297       19,779       20,819       19,555  
                                

Class B common stock

        

Income from continuing operations

   $ 0.68     $ 0.51     $ 1.88     $ 1.35  

(Loss) from discontinued operations, net of taxes

     —         —         —         —    
                                

Class B basic earnings per share

   $ 0.68     $ 0.51     $ 1.88     $ 1.35  
                                

Weighted average common shares outstanding

     13,958       14,382       14,076       14,459  
                                

DILUTED EARNINGS (LOSS) PER SHARE:

        

Class A common stock

        

Income from continuing operations

   $ 0.67     $ 0.51     $ 1.86     $ 1.33  

(Loss) from discontinued operations, net of taxes

     —         —         —         —    
                                

Class A diluted earnings per share

   $ 0.67     $ 0.51     $ 1.86     $ 1.33  
                                

Weighted average common shares outstanding

     21,755       20,181       21,279       19,966  
                                

Class B common stock

        

Income from continuing operations

   $ 0.67     $ 0.51     $ 1.86     $ 1.33  

(Loss) from discontinued operations, net of taxes

     —         —         —         —    
                                

Class B diluted earnings per share

   $ 0.67     $ 0.51     $ 1.86     $ 1.33  
                                

Weighted average common shares outstanding

     13,958       14,382       14,076       14,459  
                                

 

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MANTECH INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

 

     (unaudited)  
     Nine months ended September 30,  
     2008     2007  

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net income

   $ 65,693     $ 45,827  

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

    

Loss from discontinued operation, net of tax

     —         458  

Gain on sale of discontinued operation, net of tax

     —         (338 )

Stock-based compensation

     4,959       5,203  

Excess Tax benefits from exercise of stock options

     (5,990 )     (1,277 )

Deferred income taxes

     4,291       (830 )

Depreciation and amortization

     12,926       10,647  

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

    

Receivables-net

     (2,981 )     (5,968 )

Prepaid expenses and other

     1,558       3,380  

Accounts payable and accrued expenses

     32,070       12,014  

Accrued salaries and related expenses

     4,186       (5,220 )

Billings in excess of revenue earned

     142       (769 )

Accrued retirement

     (1,374 )     1,510  

Other

     1,414       (493 )
                

Net cash flow from operating activities of continuing operations

     116,894       64,144  

Net cash flow from discontinued operations

     —         (1,562 )
                

Net cash flow from operating activities

     116,894       62,582  
                

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Purchases of property and equipment

     (3,108 )     (1,760 )

Investment in capitalized software for internal use

     (2,062 )     (1,556 )

Proceeds from the sale of property and equipment

     —         1,828  

Proceeds from note receivable

     5,126       —    

Exercise of GSE warrants

     —         (133 )

Proceeds from sale of GSE shares

     —         600  

Acquisition of businesses—net of cash acquired

     (24,608 )     (197,016 )
                

Net investing cash flow from continuing operations

     (24,652 )     (198,037 )

Net investing cash flow from discontinued operations

     —         3,000  
                

Net cash flow from investing activities

     (24,652 )     (195,037 )
                

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Proceeds from exercise of stock options

     20,775       9,447  

Excess tax benefits from the exercise of stock options

     5,990       1,277  

Excess tax benefit from distribution of shares held in grantor trust

     —         8,581  

Treasury stock acquired

     —         (9,114 )

Net borrowings under the line of credit, non-current

     —         10,000  

Net (repayments) borrowings under the line of credit

     (120,100 )     74,292  
                

Net cash flow from financing activities

     (93,335 )     94,483  
                

NET DECREASE IN CASH AND CASH EQUIVALENTS

     (1,093 )     (37,972 )

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

     8,048       41,510  
                

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 6,955     $ 3,538  
                

###

 

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