Exhibit 99.1
| | |
| Investor Relations | | Media Relations |
| Stuart Davis | | Amy Gooen |
| (703) 218-8269 | | (703) 218-6387 |
| stuart.davis@mantech.com | | amy.gooen@mantech.com |
ManTech Announces Financial Results for
Fourth Quarter and Fiscal Year 2010
| • | | Revenue: $697.9 million (up 29%) for Q4, $2.60 billion (up 29%) for fiscal year |
| • | | Operating Income: $58.9 million (up 24%) for Q4, $215.1 million (up 20%) for fiscal year |
| • | | Diluted EPS: $0.93 (up 13%) for Q4, $3.43 (up 10%) for fiscal year |
| • | | Cash Flow from Operations: $69 million (up 107%) for Q4, $171 million (up 30%) for fiscal year |
| • | | Fiscal Year 2011 Guidance:Surpass $3 billion in revenue driven by strong organic growth |
FAIRFAX, Va. –Feb. 23, 2011 – ManTech International Corporation (NASDAQ:MANT) (www.mantech.com), a leading provider of innovative technologies and solutions for mission-critical national security programs, today announced financial results for the fourth quarter and fiscal year 2010, which ended Dec. 31, 2010.
“Fiscal year 2010 was an excellent year for ManTech, marked by double-digit growth, increased profitability, excellent cash flow and strong contract awards” said ManTech Chairman and Chief Executive Officer George J. Pedersen. “During the fourth quarter, we were also able to acquire two new companies that will provide new and additional technical capabilities as well as new customers and revenues. We continue to grow because of our strong support of our customers’ most vital missions here and around the world. We expect to exceed $3 billion in revenue in 2011.”
Summary Operating Results
Revenues for the quarter were $697.9 million, up 29 percent from $542.1 million in the fourth quarter of fiscal year 2009. Revenues for the year were $2.60 billion, up 29 percent from $2.02 billion in fiscal year 2009. Organic growth was 4 percent for the quarter and greater than 10 percent for the fiscal year, driven primarily by recent awards for intelligence, surveillance and reconnaissance (ISR), systems engineering, and test and evaluation programs, as well as expanded requirements on existing cyber security and logistics contracts, offsetting slowdowns in material purchases in support of in-theater
vehicle maintenance contracts. Excluding the in-theater vehicle maintenance contracts, organic growth was 15 percent and 18 percent for the fourth quarter and fiscal year, respectively. Organic growth is calculated by comparing reported revenue for the current quarter to the revenue for the prior year quarter adjusted as if all acquisitions had been made one year earlier.
Operating income for the quarter was $58.9 million (8.4 percent of revenue), up 24 percent from $47.4 million (8.7 percent of revenue) in the fourth quarter of fiscal year 2009. Full-year operating income was $215.1 million (8.3 percent of revenue), up 20 percent from $179.1 million (8.9 percent of revenue) in fiscal year 2009. Operating margin was higher than expected based on a relatively greater direct labor mix and exceptionally strong program performance. Growth in operating income came despite an increase in depreciation and amortization of $3.0 million for the quarter and $11.1 million for the fiscal year as a result of recent acquisitions.
Net income for the quarter was $34.0 million, up 15 percent from $29.5 million in the fourth quarter of fiscal year 2009. Full-year net income was $125.1 million, up 12 percent from $111.8 million in fiscal year 2009. Net income was affected by an increase in net interest expense of $3.7 million for the quarter and $11.3 million for the fiscal year as the result of a strategic decision to issue $200 million in unsecured senior notes in April. The notes add financial flexibility for future potential corporate investments and acquisitions. Since the issuance of the notes, the company has deployed approximately $155 million to complete three accretive acquisitions.
Diluted earnings per share for the quarter were $0.93, up 13 percent from $0.82 in the fourth quarter of fiscal year 2009, driven by the increase in net income offset by a slightly higher share count compared to the prior year quarter. Diluted earnings per share for the year were $3.43, up 10 percent from $3.11 in fiscal year 2009.
Cash Management and Capital Deployment
Cash flow from operations for the quarter was $69 million (or 2.0 times net income), up 107 percent from $34 million in the fourth quarter of fiscal year 2009. Cash collections continued to be strong as days sales outstanding (DSO) were 67 days, two days lower sequentially. For the year, cash flow from operations was $171 million (or 1.4 times net income), up 30 percent from $132 million in fiscal year 2009.
The company invested $135 million in the quarter to purchase QinetiQ North America’s Security and Intelligence Solutions business and MTCSC Inc. Including the first quarter acquisition of Sensor Technologies Inc., the company invested $377 million during the fiscal year on three acquisitions, or 2.4 times fiscal year 2010 free cash flow (defined as cash flow from operations minus capital expenditures) of $158 million.
As of Dec. 31, 2010, the company had $85 million in cash and cash equivalents and $200 million in debt with no borrowings on its $350 million revolving-credit facility. On Feb. 11, 2011, ManTech used a modest amount of cash on hand to acquire TranTech Inc. The transaction is expected to be immediately accretive to earnings per share.
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Contract Awards
Contract awards (bookings) totaled $257 million in the fourth quarter and $2.8 billion for the fiscal year, representing a book-to-bill ratio of 0.4 and 1.1 for the fourth quarter and fiscal year, respectively. The fourth quarter bookings total excludes several contracts that were awarded but were subsequently protested. Contract awards in the quarter were also affected by a number of delays. Large, single-award contracts received during the quarter include:
| • | | Naval Air Warfare Center Aircraft Division (NAWCAD) Support. Under a five-year, $57 million contract, ManTech will provide NAWCAD engineering, technical and administrative support for naval aircraft and systems. Areas of focus include reliability, maintainability, testability and quality assurance, as well as diagnostics and systems safety analyses during the design, development, production and in-service cycles of naval aircraft and associated systems. |
| • | | Naval Surface Warfare Center (NSWC) Ship Silencing Support.ManTech was awarded a four-year, $45 million task order by the NSWC Carderock Division to provide engineering, technical and program management support for submarine and surface ship signature silencing programs. ManTech’s support will include the development of systems designed to measure acoustic and non-acoustic signatures; execution of ocean engineering programs, including test and evaluation of new submarine technology; engineering and logistics for mine-vulnerability assessments; environmental assessment and impact evaluations; and assistance in planning and managing ship acoustics-related programs. |
In addition, ManTech won several indefinite delivery/indefinite quantity (IDIQ) contracts that are not included in bookings, most notably:
| • | | Federal Bureau of Investigation (FBI) Information Technology Supplies and Support Services (IT Triple S). ManTech received a prime contract with the FBI to provide a wide range of IT services, including secured communications, application development, systems engineering, cyber security, counter-terrorism analytics, tactical biometrics, and system operations and maintenance. The multiple-award, eight-year contract has a total ceiling value of $30 billion for all awardees, making it the largest contract ever awarded by the FBI. |
| • | | Commercial Enterprise Omnibus for Support Services (CEOss).ManTech received a prime contract with the Marine Corps Systems Command to provide specialized information technology and engineering services, including software development, emerging technology assessments, and modeling and simulation support. CEOss is a multiple-award contract with a 10-year period of performance and a total ceiling value of $500 million for all awardees. |
The company’s backlog of business at the end of quarter was $4.9 billion, of which $1.6 billion was funded. Compared to the fourth quarter of fiscal year 2009, total backlog
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increased 30 percent and funded backlog increased 47 percent. Additionally, contract activity has picked up in fiscal year 2011, with contract awards of about $700 million in less than two months.
Forward Guidance
ManTech enters fiscal year 2011 with a healthy backlog and a strong market position, and the company expects to achieve revenue, net income and diluted earnings per share at least equal to the levels specified in the table below.
| | | | | | | | |
Measure | | Fiscal 2011 Guidance | | | Year-over-Year Growth | |
Revenue (million) | | $ | 3,000 | | | | 15 | % |
Net Income (million) | | $ | 136 | | | | 9 | % |
Diluted Earnings Per Share | | $ | 3.67 | | | | 7 | % |
ManTech Chief Financial Officer Kevin M. Phillips said, “We feel confident forecasting robust growth for fiscal year 2011. Even as revenues from materials supporting in-theater missions have diminished, we have demonstrated that our positioning in priority areas allows us to grow and take market share. We expect that we will be able to achieve our targets given our current business base alone, but if necessary, we will also use our balance sheet as a strategic asset to achieve our financial targets and grow shareholder value.”
Conference Call
ManTech executive management will hold a conference call today at 5 p.m. Eastern to discuss the financial results and outlook and answer questions. Analysts and institutional investors may participate on the conference call by dialing 800-890-4043 (domestic) or 913-312-0653 (international) and entering passcode 8436839. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the ManTech website (http://investor.mantech.com).
A replay of the conference call will be available by telephone approximately two hours after the conclusion of the call through March 9, 2011, by dialing 888-203-1112 (domestic) or 719-457-0820 (international) and entering passcode 8436839. In addition, a replay of the webcast will be available on the ManTech website approximately two hours after the conclusion of the conference call.
About ManTech International Corporation
With more than 10,000 professionals in nearly 40 countries around the world, ManTech is a leading provider of innovative technologies and solutions for mission-critical national security programs for the intelligence community; departments of Defense, State and Homeland Security; the Department of Justice and the Federal Bureau of Investigation; the space community; the National Oceanic and Atmospheric Administration; and other U.S. federal government customers. ManTech’s expertise includes command, control, computers, communications, intelligence, surveillance and reconnaissance (C4ISR) lifecycle support, cyber security, global logistics support, intelligence/counter-intelligence
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support, information technology modernization and sustainment, systems engineering, and test and evaluation. ManTech supports major national missions, such as military readiness, terrorist threat detection, information security and border protection. Additional information on ManTech can be found atwww.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 inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes we anticipate. Factors that could cause actual results to differ materially from the results we anticipate include, but are not limited to, the following: 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 future levels of expenditures for programs we support caused by budgetary pressures facing the federal government; risks associated with complex U.S. government procurement laws and regulations; adverse results of U.S. government audits of our government contracts; risk of contract performance, modification or termination; failure to obtain option awards, task orders or funding under contracts; adverse changes in our mix of contract types; risks of financing, such as increases in interest rates and restrictions imposed by our outstanding indebtedness, including the ability to meet financial covenants, and risks related to an inability to obtain new or additional financing; 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 “Risk Factors” in ManTech’s Annual Report on Form 10-K previously filed with the Securities and Exchange Commission on Feb. 26, 2010, Item 1A of Part II of our Quarterly Reports on Form 10-Q and, from time to time, in ManTech’s other filings with the Securities and Exchange Commission.
The forward-looking statements included in this news release are only made as of the date of this press 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, Except Share Amounts)
| | | | | | | | |
| | | December 31, | |
| | | 2010 | | | 2009 | |
| ASSETS | | | | | | | | |
CURRENT ASSETS: | | | | | | | | |
Cash and cash equivalents | | $ | 84,829 | | | $ | 86,190 | |
Receivables—net | | | 528,765 | | | | 399,239 | |
Prepaid expenses and other | | | 16,642 | | | | 11,182 | |
| | | | | | | | |
Total Current Assets | | | 630,236 | | | | 496,611 | |
| | |
Property and equipment—net | | | 27,086 | | | | 14,498 | |
Goodwill | | | 729,558 | | | | 488,217 | |
Other intangibles—net | | | 168,487 | | | | 73,684 | |
Employee supplemental savings plan assets | | | 24,415 | | | | 21,065 | |
Other assets | | | 10,695 | | | | 6,672 | |
| | | | | | | | |
TOTAL ASSETS | | $ | 1,590,477 | | | $ | 1,100,747 | |
| | | | | | | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | |
Accounts payable and accrued expenses | | $ | 272,047 | | | $ | 157,358 | |
Accrued salaries and related expenses | | | 64,575 | | | | 55,429 | |
Billings in excess of revenue earned | | | 11,118 | | | | 7,737 | |
| | | | | | | | |
Total Current Liabilities | | | 347,740 | | | | 220,524 | |
| | |
Long-term debt | | | 200,000 | | | | 0 | |
Accrued retirement | | | 25,789 | | | | 22,033 | |
Other long-term liabilities | | | 7,495 | | | | 6,877 | |
Deferred income taxes—non-current | | | 43,110 | | | | 33,848 | |
| | | | | | | | |
TOTAL LIABILITIES | | | 624,134 | | | | 283,282 | |
| | | | | | | | |
| | |
COMMITMENTS AND CONTINGENCIES | | | — | | | | — | |
| | |
STOCKHOLDERS’ EQUITY: | | | | | | | | |
Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 23,396,549 and 22,602,110 shares issued at December 31, 2010 and 2009; 23,153,509 and 22,359,070 shares outstanding at December 31, 2010 and 2009 | | | 234 | | | | 226 | |
Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 13,275,345 and 13,605,345 shares issued and outstanding at December 31, 2010 and 2009 | | | 133 | | | | 136 | |
Additional paid-in capital | | | 385,407 | | | | 362,730 | |
Treasury stock, 243,040 shares at cost at December 31, 2010 and 2009 | | | (9,114 | ) | | | (9,114 | ) |
Retained earnings | | | 589,838 | | | | 464,742 | |
Accumulated other comprehensive loss | | | (155 | ) | | | (172 | ) |
Unearned Employee Stock Ownership Plan Shares | | | 0 | | | | (1,083 | ) |
| | | | | | | | |
TOTAL STOCKHOLDERS’ EQUITY | | | 966,343 | | | | 817,465 | |
| | | | | | | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 1,590,477 | | | $ | 1,100,747 | |
| | | | | | | | |
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MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
| | | | | | | | | | | | | | | | |
| | | (unaudited) | | | | | | | |
| | | Three months ended
December 31, | | | For Year Ended
December 31, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
REVENUES | | $ | 697,916 | | | $ | 542,066 | | | $ | 2,604,038 | | | $ | 2,020,334 | |
Cost of services | | | 591,441 | | | | 450,651 | | | | 2,208,631 | | | | 1,668,763 | |
General and administrative expenses | | | 47,611 | | | | 44,004 | | | | 180,267 | | | | 172,492 | |
| | | | | | | | | | | | | | | | |
OPERATING INCOME | | | 58,864 | | | | 47,411 | | | | 215,140 | | | | 179,079 | |
Interest expense | | | (4,002 | ) | | | (220 | ) | | | (12,567 | ) | | | (1,141 | ) |
Interest income | | | 125 | | | | 54 | | | | 361 | | | | 215 | |
Other (expense) income, net | | | (215 | ) | | | 96 | | | | (483 | ) | | | 355 | |
| | | | | | | | | | | | | | | | |
INCOME FROM OPERATIONS BEFORE INCOME TAXES | | | 54,772 | | | | 47,341 | | | | 202,451 | | | | 178,508 | |
Provision for income taxes | | | (20,760 | ) | | | (17,825 | ) | | | (77,355 | ) | | | (66,744 | ) |
| | | | | | | | | | | | | | | | |
NET INCOME | | $ | 34,012 | | | $ | 29,516 | | | $ | 125,096 | | | $ | 111,764 | |
| | | | | | | | | | | | | | | | |
| | | | |
BASIC EARNINGS PER SHARE: | | | | | | | | | | | | | | | | |
Class A basic earnings per share | | $ | 0.94 | | | $ | 0.82 | | | $ | 3.45 | | | $ | 3.13 | |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted average common shares outstanding | | | 23,082 | | | | 22,318 | | | | 22,847 | | | | 21,980 | |
| | | | | | | | | | | | | | | | |
| | | | |
Class B basic earnings per share | | $ | 0.94 | | | $ | 0.82 | | | $ | 3.45 | | | $ | 3.13 | |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted average common shares outstanding | | | 13,275 | | | | 13,605 | | | | 13,367 | | | | 13,707 | |
| | | | | | | | | | | | | | | | |
| | | | |
DILUTED EARNINGS PER SHARE: | | | | | | | | | | | | | | | | |
Class A diluted earnings per share | | $ | 0.93 | | | $ | 0.82 | | | $ | 3.43 | | | $ | 3.11 | |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted average common shares outstanding | | | 23,251 | | | | 22,596 | | | | 23,054 | | | | 22,278 | |
| | | | | | | | | | | | | | | | |
| | | | |
Class B diluted earnings per share | | $ | 0.93 | | | $ | 0.82 | | | $ | 3.43 | | | $ | 3.11 | |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted average common shares outstanding | | | 13,275 | | | | 13,605 | | | | 13,367 | | | | 13,707 | |
| | | | | | | | | | | | | | | | |
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MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| | | | | | | | | | | | |
| | | Year Ended December 31, | |
| | | 2010 | | | 2009 | | | 2008 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | |
Net income | | $ | 125,096 | | | $ | 111,764 | | | $ | 90,292 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | |
Stock-based compensation | | | 7,443 | | | | 8,289 | | | | 6,626 | |
Excess tax benefits from the exercise of stock options | | | (545 | ) | | | (1,121 | ) | | | (6,446 | ) |
Deferred income taxes | | | 4,688 | | | | (201 | ) | | | 8,157 | |
Depreciation and amortization | | | 28,878 | | | | 17,747 | | | | 17,323 | |
Change in assets and liabilities—net of effects from acquired businesses: | | | | | | | | | | | | |
Receivables-net | | | (36,226 | ) | | | 9,296 | | | | (62,513 | ) |
Prepaid expenses and other | | | (4,770 | ) | | | 4,640 | | | | (223 | ) |
Accounts payable and accrued expenses | | | 39,643 | | | | 997 | | | | 59,888 | |
Accrued salaries and related expenses | | | 2,029 | | | | (20,050 | ) | | | 11,768 | |
Billings in excess of revenue earned | | | 3,381 | | | | (714 | ) | | | 85 | |
Accrued retirement | | | 1,550 | | | | 6,103 | | | | (3,043 | ) |
Other | | | 278 | | | | (4,503 | ) | | | 5,352 | |
| | | | | | | | | | | | |
Net cash flow from operating activities | | | 171,445 | | | | 132,247 | | | | 127,266 | |
| | | | | | | | | | | | |
| | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | |
Purchases of property and equipment | | | (10,257 | ) | | | (4,021 | ) | | | (5,050 | ) |
Investment in capitalized software for internal use | | | (3,051 | ) | | | (2,218 | ) | | | (2,742 | ) |
Proceeds from note receivable | | | 0 | | | | 0 | | | | 5,126 | |
Acquisition of businesses, net of cash acquired | | | (368,853 | ) | | | (13,775 | ) | | | (36,496 | ) |
| | | | | | | | | | | | |
Net cash flow from investing activities | | | (382,161 | ) | | | (20,014 | ) | | | (39,162 | ) |
| | | | | | | | | | | | |
| | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | |
Proceeds from exercise of stock options | | | 13,807 | | | | 12,561 | | | | 22,677 | |
Excess tax benefits from the exercise of stock options | | | 545 | | | | 1,121 | | | | 6,446 | |
Net repayments under the revolving credit facility | | | 0 | | | | (44,100 | ) | | | (120,900 | ) |
Issuance of senior notes | | | 200,000 | | | | 0 | | | | 0 | |
Debt issuance costs | | | (4,997 | ) | | | 0 | | | | 0 | |
| | | | | | | | | | | | |
Net cash flow from financing activities | | | 209,355 | | | | (30,418 | ) | | | (91,777 | ) |
| | | | | | | | | | | | |
| | | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | (1,361 | ) | | | 81,815 | | | | (3,673 | ) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | | | 86,190 | | | | 4,375 | | | | 8,048 | |
| | | | | | | | | | | | |
CASH AND CASH EQUIVALENTS, END OF PERIOD | | $ | 84,829 | | | $ | 86,190 | | | $ | 4,375 | |
| | | | | | | | | | | | |
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