Exhibit 99.1
| | |
Investor Relations Stuart Davis (703) 218-8269 stuart.davis@mantech.com | |  |
ManTech Announces Financial Results for
Second Quarter of 2012
| | • | | Revenue: $638.9 million |
| | • | | Operating Income: $44.9 million |
| | • | | Cash Flow from Operations: $39 million |
| | • | | Dividends: $0.21 per share paid in June; $0.21 per share authorized for September |
FAIRFAX, Va. – August 1, 2012 – 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 second quarter of 2012, which ended June 30, 2012.
“The defense services industry has experienced delays in contract awards and delays in funding based upon the uncertainty surrounding the congressional appropriation process, which we now expect to clear given the six-month Continuing Resolution agreed to yesterday, according to theWashington Post,” said ManTech Chairman and Chief Executive Officer George J. Pedersen. “It now appears that government funding is secure through March 2013 at this year’s level, and we assume that customers will soon release funds that they have been holding, which will provide us the opportunity to return to a growth profile that investors have come to expect from ManTech over the past ten years. The award of the $2.85 billion MRAP contract, the largest contract award in our history, will provide a solid foundation and potential for growth despite future reductions of support in Afghanistan. We have grown our cyber and intelligence businesses over the past year, and we expect those markets to continue to grow. Looking beyond defense, we are expanding into new business areas such as healthcare IT and commercial cyber security. Our long-term outlook for growth remains positive.”
Summary Operating Results
Revenues for the quarter were $638.9 million, compared to $752.7 million in the second quarter of 2011. Quarterly revenues increased across intelligence, cyber security and healthcare programs, which partially offset industry-wide decreases in government spending, especially for support to wartime missions.
Operating income for the quarter was $44.9 million, compared to $59.2 million in the second quarter of 2011. Operating margin of 7.0 percent reflected a higher mix of direct labor and excellent award fees stemming from strong program execution. Net income for the quarter was $24.7 million, compared to $36.4 million in the second quarter of 2011. Diluted earnings per share for the quarter were $0.67, compared to $0.99 in the second quarter of 2011. Net income and earnings per share for the second quarter of 2011
benefited from a $3.7 million pre-tax gain from the company’s equity interest in NetWitness, a network security product provider spun out of ManTech in 2006 and sold to EMC Corporation on April 1, 2011. Without that gain, net income and diluted earnings per share for the second quarter of 2011 would have been $34.1 million and $0.93, respectively.
Cash Management and Capital Deployment
Cash flow from operations for the quarter was $39 million or 1.6 times net income. Days sales outstanding (DSO) were 73 days, compared to 76 days in the first quarter of 2012. As of June 30, 2012, ManTech had $125 million in cash and cash equivalents and $200 million in high-yield debt with no outstanding borrowings on its $500 million revolving-credit facility.
During the quarter, the company paid $7.8 million, or $0.21 per share, to its common stockholders of record as of June 8, 2012. The company also invested $24 million to acquire the business of HBGary, a cyber security developer whose comprehensive suite of software products detect, analyze, and diagnose advanced persistent threats and targeted malware. HBGary has an impressive list of customers in the financial services, energy, critical infrastructure and technology sectors. Since the acquisition announcement, HBGary has had strong bookings, winning new contracts with a leading credit card company, a large payment processing services company, an international bank, energy companies, major retail chains, large federal agencies, and large federal contractors.
The Board of Directors has declared that the company will pay a cash dividend of $0.21 per share on September 21, 2012 to all common stockholders of record as of September 7, 2012 as part of its regular quarterly cash dividend program. Future declarations of dividends and their record and payment dates are subject to the final determination of ManTech’s Board of Directors.
Contract Awards
Contract awards (bookings) totaled $3.1 billion in the second quarter, representing a book-to-bill ratio of 4.8. Most significantly, ManTech was awarded the Contractor Logistics Sustainment and Support (CLSS) Services contract by the U.S. Army’s TACOM Contracting Center to continue providing logistics sustainment and support for the U.S. Military’s Mine Resistant Ambush Protected (MRAP) Family of Vehicles (FoV). The award, the largest in our history, has a total value of $2.85 billion and a period of performance of five years if all options are exercised. Under this contract ManTech will continue to provide services to assess and repair battle-damaged MRAP FoV systems, insert technology, integrate systems, and perform upgrades and modifications to enhance and sustain future fleet operational readiness. ManTech will also continue to manage supply and transportation support for the route-clearance vehicle fleet, including demand analysis, warehouse operations, logistics data reporting, and material management to ensure optimum distribution of parts at all repair locations.
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In addition, the company won several multiple-award indefinite delivery/indefinite quantity (IDIQ) contracts that are not included in bookings, the largest of which is the National Institutes of Health (NIH) Chief Information Officer-Solutions and Partners (CIOSP-3) contract. Under this Government-wide Acquisition Contract (GWAC), which has a total ceiling value of $20 billion over 10 years for all awardees, ManTech will provide a broad range of professional IT and support services, including health, health science and biomedical-related IT services to meet scientific, health, administrative, operational, managerial and information management requirements.
Forward Guidance
The company is updating its expected financial performance for 2012 based on first half results and a revised forward outlook. The company now expects to achieve revenue, net income and diluted earnings per share as specified in the table below.
| | | | |
Measure | | Fiscal 2012 Guidance | |
Revenue (million) | | $ | 2,700 | |
Net Income (million) | | $ | 105 | |
Diluted Earnings Per Share | | $ | 2.85 | |
ManTech Chief Financial Officer Kevin M. Phillips said, “Delayed awards and funding decisions by our customers during these uncertain times affected our revenues and profits in the second quarter and our outlook for the rest of the year. We are actively addressing our indirect cost profile to match our current scale, and we will be ready to staff programs quickly when customer funding materializes. We continue to maintain a strong balance sheet and cash flows, which we believe are essential in the current environment.”
Conference Call
ManTech executive management will hold a conference call on August 1, 2012, at 5 p.m. Eastern to discuss the financial results and outlook and answer questions. Analysts may participate on the conference call by dialing 877-638-9567 (domestic) or 253-237-1032 (international) and entering passcode 95883825. 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 August 14, 2012, by dialing 855-859-2056 (domestic) or 404-537-3406 (international) and entering passcode 95883825. 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
ManTech is a leading provider of innovative technologies and solutions for mission-critical national security programs for the intelligence community; the Department of
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Defense, including its health organizations; the departments of State, Homeland Security, Energy and Justice, including the Federal Bureau of Investigation (FBI); the space community; the National Oceanic and Atmospheric Administration; and other U.S. federal government customers. We provide support to critical national security programs for approximately 60 federal agencies through 1,000 current contracts. ManTech’s expertise includes command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR) lifecycle support; cyber security; global logistics support; intelligence/counter-intelligence support; information technology (IT) modernization and sustainment; systems engineering; test and evaluation; and health IT. 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,” “expect,” “intend,” “anticipate,” “believe,” or “estimate,” 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 and changing mission priorities; adverse changes in our mix of contract types; failure to obtain option awards, task orders or funding under contracts; risk of contract renegotiation, performance, modification or termination; adverse results of U.S. government audits of our government contracts; risks associated with complex U.S. government procurement laws and regulations; competition; 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 failure to maintain strong relationships with other contractors. These and other risk factors are more fully discussed in the section entitled “Risks Factors” in ManTech’s Annual Report on Form 10-K previously filed with the Securities and Exchange Commission on Feb. 24, 2012, 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.
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The forward-looking statements included herein 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Amounts)
| | | | | | | | |
| | | (unaudited) | |
| | | June 30,
2012 | | | December 31,
2011 | |
| ASSETS | | | | | | | | |
CURRENT ASSETS: | | | | | | | | |
Cash and cash equivalents | | $ | 124,661 | | | $ | 114,483 | |
Receivables—net | | | 521,109 | | | | 540,468 | |
Prepaid expenses and other | | | 22,706 | | | | 33,115 | |
| | | | | | | | |
Total Current Assets | | | 668,476 | | | | 688,066 | |
Property and equipment—net | | | 26,182 | | | | 47,435 | |
Goodwill | | | 861,653 | | | | 808,455 | |
Other intangibles—net | | | 176,319 | | | | 177,764 | |
Employee supplemental savings plan assets | | | 24,678 | | | | 25,026 | |
Other assets | | | 12,292 | | | | 13,460 | |
| | | | | | | | |
TOTAL ASSETS | | $ | 1,769,600 | | | $ | 1,760,206 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
CURRENT LIABILITIES: | | | | | | | | |
Accounts payable and accrued expenses | | $ | 269,401 | | | $ | 280,277 | |
Accrued salaries and related expenses | | | 71,364 | | | | 72,467 | |
Billings in excess of revenue earned | | | 13,212 | | | | 34,956 | |
| | | | | | | | |
Total Current Liabilities | | | 353,977 | | | | 387,700 | |
Long-term debt | | | 200,000 | | | | 200,000 | |
Accrued retirement | | | 25,923 | | | | 26,155 | |
Other long-term liabilities | | | 8,829 | | | | 7,871 | |
Deferred income taxes—non-current | | | 51,013 | | | | 49,223 | |
| | | | | | | | |
TOTAL LIABILITIES | | | 639,742 | | | | 670,949 | |
| | | | | | | | |
| | |
COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| | |
STOCKHOLDERS’ EQUITY: | | | | | | | | |
Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 23,986,664 and 23,882,331 shares issued at June 30, 2012 and December 31, 2011; 23,742,551 and 23,638,218 shares outstanding at June 30, 2012 and December 31, 2011 | | | 240 | | | | 239 | |
Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 13,192,845 and 13,192,845 shares issued and outstanding at June 30, 2012 and December 31, 2011 | | | 132 | | | | 132 | |
Additional paid-in capital | | | 412,687 | | | | 406,083 | |
Treasury stock, 244,113 and 244,113 shares at cost at June 30, 2012 and December 31, 2011 | | | (9,158 | ) | | | (9,158 | ) |
Retained earnings | | | 727,157 | | | | 692,272 | |
Accumulated other comprehensive loss | | | (381 | ) | | | (311 | ) |
Unearned Employee Stock Ownership Plan Shares | | | (819 | ) | | | 0 | |
| | | | | | | | |
TOTAL STOCKHOLDERS’ EQUITY | | | 1,129,858 | | | | 1,089,257 | |
| | | | | | | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 1,769,600 | | | $ | 1,760,206 | |
| | | | | | | | |
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MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
| | | | | | | | | | | | | | | | |
| | | (unaudited)
Three months ended
June 30, | | | (unaudited)
Six months ended
June 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
REVENUES | | $ | 638,937 | | | $ | 752,673 | | | $ | 1,315,446 | | | $ | 1,453,537 | |
Cost of services | | | 544,110 | | | | 644,647 | | | | 1,126,977 | | | | 1,244,414 | |
General and administrative expenses | | | 49,947 | | | | 48,858 | | | | 97,894 | | | | 94,100 | |
| | | | | | | | | | | | | | | | |
OPERATING INCOME | | | 44,880 | | | | 59,168 | | | | 90,575 | | | | 115,023 | |
Interest expense | | | (4,009 | ) | | | (3,979 | ) | | | (8,157 | ) | | | (7,949 | ) |
Interest income | | | 67 | | | | 59 | | | | 139 | | | | 123 | |
Other income (expense), net | | | (103 | ) | | | 3,820 | | | | (88 | ) | | | 3,916 | |
| | | | | | | | | | | | | | | | |
INCOME FROM OPERATIONS BEFORE INCOME TAXES | | | 40,835 | | | | 59,068 | | | | 82,469 | | | | 111,113 | |
Provision for income taxes | | | (16,090 | ) | | | (22,626 | ) | | | (32,082 | ) | | | (42,768 | ) |
| | | | | | | | | | | | | | | | |
NET INCOME | | $ | 24,745 | | | $ | 36,442 | | | $ | 50,387 | | | $ | 68,345 | |
| | | | | | | | | | | | | | | | |
BASIC EARNINGS PER SHARE: | | | | | | | | | | | | | | | | |
Class A basic earnings per share | | $ | 0.67 | | | $ | 0.99 | | | $ | 1.37 | | | $ | 1.87 | |
| | | | | | | | | | | | | | | | |
Weighted average common shares outstanding | | | 23,697 | | | | 23,357 | | | | 23,670 | | | | 23,282 | |
| | | | | | | | | | | | | | | | |
Class B basic earnings per share | | $ | 0.67 | | | $ | 0.99 | | | $ | 1.37 | | | $ | 1.87 | |
| | | | | | | | | | | | | | | | |
Weighted average common shares outstanding | | | 13,193 | | | | 13,271 | | | | 13,193 | | | | 13,273 | |
| | | | | | | | | | | | | | | | |
DILUTED EARNINGS PER SHARE: | | | | | | | | | | | | | | | | |
Class A diluted earnings per share | | $ | 0.67 | | | $ | 0.99 | | | $ | 1.36 | | | $ | 1.86 | |
| | | | | | | | | | | | | | | | |
Weighted average common shares outstanding | | | 23,736 | | | | 23,510 | | | | 23,726 | | | | 23,434 | |
| | | | | | | | | | | | | | | | |
Class B diluted earnings per share | | $ | 0.67 | | | $ | 0.99 | | | $ | 1.36 | | | $ | 1.86 | |
| | | | | | | | | | | | | | | | |
Weighted average common shares outstanding | | | 13,193 | | | | 13,271 | | | | 13,193 | | | | 13,273 | |
| | | | | | | | | | | | | | | | |
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MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| | | | | | | | |
| | | (unaudited)
Six months ended
June 30, | |
| | | 2012 | | | 2011 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | |
Net income | | $ | 50,387 | | | $ | 68,345 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
Stock-based compensation | | | 4,431 | | | | 4,470 | |
Excess tax benefits from the exercise of stock options | | | (43 | ) | | | (236 | ) |
Deferred income taxes | | | 3,626 | | | | (2,230 | ) |
Depreciation and amortization | | | 37,296 | | | | 14,391 | |
Gain on sale of investments | | | — | | | | (3,745 | ) |
Change in assets and liabilities—net of effects from acquired businesses: | | | | | | | | |
Receivables-net | | | 26,095 | | | | (10,248 | ) |
Prepaid expenses and other | | | 8,320 | | | | 2,874 | |
Accounts payable and accrued expenses | | | (16,064 | ) | | | 33,600 | |
Accrued salaries and related expenses | | | (3,053 | ) | | | 30,960 | |
Billings in excess of revenue earned | | | (22,036 | ) | | | 48,512 | |
Accrued retirement | | | (232 | ) | | | 416 | |
Other | | | 2,120 | | | | (381 | ) |
| | | | | | | | |
Net cash flow from operating activities | | | 90,847 | | | | 186,728 | |
| | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | |
Acquisition of businesses-net of cash acquired | | | (62,188 | ) | | | (20,315 | ) |
Purchases of property and equipment | | | (4,438 | ) | | | (35,938 | ) |
Disposition of a business | | | 1,799 | | | | — | |
Investment in capitalized software for internal use | | | (1,693 | ) | | | (3,285 | ) |
Proceeds from sale of investment | | | 185 | | | | 3,255 | |
| | | | | | | | |
Net cash flow from investing activities | | | (66,335 | ) | | | (56,283 | ) |
| | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
Dividend paid | | | (15,492 | ) | | | (15,400 | ) |
Proceeds from exercise of stock options | | | 1,115 | | | | 6,884 | |
Excess tax benefits from the exercise of stock options | | | 43 | | | | 236 | |
Treasury stock acquired | | | — | | | | (44 | ) |
| | | | | | | | |
Net cash flow from financing activities | | | (14,334 | ) | | | (8,324 | ) |
| | | | | | | | |
NET CHANGE IN CASH AND CASH EQUIVALENTS | | | 10,178 | | | | 122,121 | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | | | 114,483 | | | | 84,829 | |
| | | | | | | | |
CASH AND CASH EQUIVALENTS, END OF PERIOD | | $ | 124,661 | | | $ | 206,950 | |
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