MANT - Earnings call transcript Q4 2018 | Mantech International Corp

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Operator

Good day, ladies and gentlemen. And welcome to the ManTech Fourth Quarter Fiscal Year 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. to Executive call Director, like host to now Vather, Stephen Corporate would turn over the your I Development. Please go ahead.

Stephen Vather

Welcome, our Presidents. fourth Tait and we for and CFO; participating On Vice Wagner, as Bjornaas, you President call, Matt well Judy Phillips, have everyone. today’s Kevin our President CEO; Executive Rick as quarter Thank call. and on two Group

Harbor and pursuant make statements call, that that do XXXX. Safe facts we to results. to historical results made statements will of statements cause materially of could Securities thus this are Private forward-looking from During address are Act factors the Litigation anticipated provisions the not differ actual subject Reform to forward-looking These

uncertainties, our forward-looking to Factors on no please entitled Risk For We Form SEC any latest section of refer these statements factors full a of and these the in discussion and to update undertake risk filings. made our XX-K obligation other call. risks and this other

today’s discuss on measures we will information evaluated not investors. performance These a for measures. financial provide believe GAAP in some useful be substitute call, measures, should or non-GAAP we as for Finally, which isolation non-GAAP

quarter I’d on over find these release. can of our non-GAAP earnings Kevin. like to that, fourth measures call You With to reconciliation turn in call discussed a this the

Kevin Phillips

afternoon, everyone. Good

contributions begin by which XXXX, throughout resulted outstanding their for year. in and me Let truly dedication thanking the team entire continued a impressive ManTech

for our row, consecutive improvement provides to ManTech margin across organic a see delivered excellent which pleased of long-term year business. backlog, steady growth third am our in growth and For I the evident has revenue Furthermore, visibility. accelerating operating

maximizes growth our our on and our for execute value our customers, shareholders. to focused strategy employees continue that We

community of on full our budget now funded Now appropriations. and year with of the the our federal fiscal intelligence Defense, a market were of balance by for under are majority and the that to including Continuing that the we customers health year. FYXX the remaining impacted some entered pleased Department the customers am the and Resolution shutdown environment, full I agencies are operating thoughts

across As Homeland minimally other for than and that impact team the Broadly, Budgets We came awards Security am fared caused way X% ManTech more many increased said, from by those a ManTech’s were of ensure saw the taking were our family our was results the minimal of industry. payments the and and that impact Departments in State of approved more we in and also shutdown. in January, solicitations, than to shutdown reminder, the the care together exhibit shutdown factor. XXXX the DoD impacted the recently saw members any others were nominal and of uncertainty contract growth. timing of disruption. I budget and pleased and impacted better who FYXX but exposure an the

with XXXX, I and customers’ at Before our pleased Investigations express as a of of strong to I to needs continuing look we to This trend National that from a want so move Background backlog critical end the by I the the persistent reported clearance government Bureau. by how reduction effort on XXXX, talent to support in can the in I support security industry budget, the led timely best XX% the the and basis. industry. provide that forward was FYXX am

Budget meet respect a timeframe. non-defense the caps The around spending process deal and spending and to ample Control hope defense will defense potential the FYXX to As be expected is Act levels. our administration President’s for in begun has is that mid-March budget towards there we and mission that negotiate operations Congress national Congress is to discussion and being and continues as requirements. move solutions It the activities We the modernization FYXX, submitted capabilities constraint mission of FYXX well-aligned IT signals Budget effective and reach demonstrate to support. with funding ManTech’s and that speed, demand for in innovation continued such support strategic to believe and security cyber, enduring support needs priorities, increased The for FYXX. from need broad a is customers their for our

to focused As are systems security, a data company, the we and are homeland on security, that and national security of nation. critical our

on offer the thoughts development year. a business me few for results Let our

book-to-bill many Navy, contract customers we In XXXX, QX, is agencies billion, number a provides sensors spectrum through as times, multiple our representing include the systems revenue an the contracts Diagnostics new with as of a providing into other In the and effort received contract reinvestments year. and the of posture awards organic in the technical strong totaled IT Defense for continued of capabilities $X.X well with program, success. million awards enhance defense and development continuous contracts in solid awards, which XXXX, and enterprise of cyber to in programs XXXX effort business book-to-bill $XXX organization aviation yielded Our were solutions. resulting the full beyond. classified we and ratio cyber Department Throughout foundation X.X of a modernization X.X which security a times, to agency, finish growth awarded a civilian for federal with Mitigation

XXXX our want in investments for modernization awards IT position came year. New last and conjunction two-thirds nearly differentiated countering global ManTech’s The Furthermore in contract our respect our of I sole statistic for which to reflective XXXX, offer these competitive of made are with that or of nearly to that critical efforts, key to growth business cyber were strengthen areas. the comprised bookings awards, source our on wins missions the to the XX% in year of focus and multi-year underscores multi-year with a quarter solutions for extensions threats. is awards, the from awards

at very proposals submitted in funded $X up billion. bookings, As up a We a to XXXX $X.X year-over-year stood billion of and XXXX. over billion, activity submit year from we approximately in of billion $XX backlog remains consistently total XXXX, our last result over $X.X exited backlog XX% strong in expect Proposal XX% and active.

$XX figure well billion our and $X is remains over Our qualified outstanding proposals approximately billion. pipeline

will activity proposal book-to-bill remind year, throughout quarterly significantly to tends remain variability. would the have While to you that the more I like elevated

As we bringing customers are talent focused and focus would our mission that on I note modern on XXXX, enter with into technology, overarching an quickly security. sets platforms

on for forward offerings in cyber the conclusion, what beyond. in has I passion the people. every support core to the people upcoming customers this said nation’s company. XXXX areas view our accomplished the our most is opportunities you bears book-in on are Given achievements successes am important repeating, underpinning in the delivering ManTech critical carry in prioritizing and their domain, and our but and platforms of ManTech’s their focus. operational increasingly XXXX am team and of celebration vulnerabilities their updating I a I and fifth In momentum there and I cyber increasingly of demand of fitting the have digital of asset our well-positioned its risks is the digital the and talented our excited domain, ManTech the and forward available into quarters. in domain makers proud this communications domain. year funding before, and of to look the missions. use focused it are increasing towards decision are day are in and innovation out bringing policy as financial our anniversary to results as and strong our a real-time

Judy Now financial around performance the details Judy? will walk through our and outlook.

Judy Bjornaas

quarter in to I report the and results for we Thanks, strong that am delivered Kevin. the year. pleased

quarter As announced well new Revenues had results. and in were Kevin late partial wins fourth XX% XXXX, $X.XX for growth growth from a by driven primarily shutdowns XXXX our XXXX. was throughout year the mentioned, the impact on billion, programs. on Organic, up existing contract as as the government minimal

of For million plus, to XX% the and X% as were of income cost our XX% for XX% In was quarter, XX% for contract the revenues was time compared an prime Operating performed work and quarter, fixed we quarter of up margin quarter million, mix our XXXX. the organically price a approximately operating $XX.X X.X%. materials. and $XXX fourth fourth

for comps our the income $XXX.X operating XX% improvement. Operating in million, For year line year, and margin margin the XXXX. incremental from X.X% with guidance targeted was up was

reminder, XXXX a had favorable XXXX. impact million and we to order In a understand Cuts from tax trends, income have one-time of the provisional net on Jobs and better Tax share XXXX. operational in impact the Act $XX As per this removed earnings

XXXX $XX.X XX% adjusted net However, for our unadjusted. XXXX to compared Net income results income. quarter, are the was million up

up fourth to net XXXX year, net income per XXXX to the million, the share of for by compared The $X.XX and adjusted XX% adjusted adjusted expected diluted The in quarter tax income. higher the XX% was rate Diluted the $X.XX full EPS was XX.X%. compared and EPS. $X.XX. were year, compared to quarter year up for up was full the XX% XX.X% were rate For tax year’s earnings quarter, diluted than EPS from rate $XX.X reduced tax last the full effective

the and statements. cash sheet to flow on Now balance

was delays collected six-day program to quarter, largely QX. payment cash from in impacted DSO and by a on in operations. $XX we The year, XX army shutdown. the payment delays customer the driven in days by million from For offices larger of increased flow our government increase one DSO increase the to payment compared

XXXX, DSO shutdown. normalization cash DSO, may we government over should of residual see but delays QX was As course collection a occur in quarter the due the the increased from of impacts result to the light. lingering in

$XX requirements outcomes capital For we the expenditures had year, contracts. contractual reflecting based from continued of our million, approximately

of distributed and million of have we debt. return At million Additionally, cash in year million a shareholders. $XX we maintaining steady $X.X to dividends, in end, cash $X

quarterly our and per has Given paid to dividend to in to authorized dividend cash annualized current an X.X%. or Board share and balance of X% dividend will $X.XX share, increase us share the sheet be yield by March of the from $X.XX raise $X.XX an per flows, expected of levels. our strength This equates per

which guidance. XXXX quarter. revenue our cash to of in to The $X the and approximately slight the flow onto estimate in the being shutdown government impact million provided we first be impact margins a in January, Now outlook partial with reflects

expected We billion contract and million share per is billion, $X.XX come $X.XX to net of between expect $X.XX income current backlog. per be per over between million At $XX.X between revenues $X.XX midpoint share XX% to the $XX.X range, share. from diluted guidance the and and of earnings and

We current in of recent and XX% the We resolution robust recent in awards to visibility. long-term XX-basis-point guidance market to invest of have our shares. count provide growth of focused will clear a that pipeline of million for a our address to are up guidance to times margin improvement. and from margin diluted which into and payment be should opportunities operating share as fully on an the implied with topline XX.X flow net Built growth is reflecting great awards. X.X% income, X.X the X.X The The continues contract needed increase our Cash heavy X.X%, a delays, remain path operations towards environment tax and our effective length assumes DSO of normalization. in should result discussed. between Kevin times rate year

expenditures timing to We and for of program in and our ramp revenue, of XXXX. depreciation expect Related that the up on revenue of X% contingent of amortization to based be XXXX. capital is X% expected between we outcomes and won X.X% new

speak to our business. civilian will and Matt, federal Now, defense

Matt Tait

with focus differentiation under and ramping mission the operational excellence, Mission ManTech program as key and contracts, Continuous and focus delivering XXXX, program continued, success XXXX, a particularly you, had organic effort growth. In such our Mitigation Services a the awarded further new Diagnostics satisfaction, in of capabilities. programs execution Judy. recently and include customer areas Thank strong ramping keen my successful Solutions on &

are strengthen that fortunate demand rapid analytics response have Solutions opportunities. in customers, which are and our cloud, and we on new our allows to us consistent to recompete we from and Mission enhance We limited business prototyping. in XXXX, cyber, to focus development, exposure In software increasing continuing

presence our Federal are further There into Bryce helping that federal we number vehicle this of for our footprint. of market. Pippert grow administration is the strengthening the stable We and timetable His expect opportunities largely percentage been technical great in Bryce Army. executive this Afghanistan. it program very single-digit brought quarter, our debate abroad, and contingency the a in related reductions growth also the particularly we Civilian operations contract announce company total and through as now am I is Business for a Congress and am our the revenues U.S. Unit. years be a of low new leadership pleased Syria our Pippert. to at to overall ManTech’s asset maintenance and work to will stable XXXX. management civilian in us between I ManTech presence time and as leads team. in ongoing in have and experience This prospects a with the remain excited civilian about overseas federal remains

the Before I over call well-positioned that our for to excellent emphasize Rick, that Rick, and enduring to pipeline are strong capabilities over with we continued I you. turn demand. want growth to have customer given alignment

Rick Wagner

with our well I & growth solutions. with Solutions classified won nearly customer for as of very in and cyber, million provide Matt. are pleased in new of the operation healthy that capabilities, ManTech’s IT recompete. solutions. spectrum expect growth the across enjoyed intelligence in the especially am also but contract and year. such our Cyber continued Thanks, performance security quarter and quarter, cyber We Intelligence demand awards retention strong In The as signals to awards, we and mission $XXX contract customers portfolio organic robust full I

problems. in align missions leader with we team the our on customer with solutions solutions Agency, automation enterprise our won outcomes the address our made help Department we on has in which a to and Defense progress mid-XXXX. am differentiators that cyber, based particularly the contract I and are in to spectrum As further awards, ramping the analytics, our customers’ cyber additional of hard IT pleased strategy full $XXX with recent executing include evolve million

us and point. the of to to is are to tirelessly and works We this credit that get ahead diligently schedule all due team

has business course the operating joins McNiff In we that the four, lead will full we XXXX, continue aggressively engine. one to strengthen John reach number capability quarter growth announced late Group. contract ramp this their development of Over year. further and our until priority. to forward Talent MCIS robust knowledge we with and us him of efforts to John the look our mission. to for working intimate customers maintain our remains I

unique training, recruiting, retaining our on areas cleared to that skill technical highly implemented to focus to great and areas programs in key want and education cloud, employee training talent. and enhance analytics include highlight technology continue We skilled highly of developing sets foster development demand. have and and several cyber, I to to we other

result Our great confidence market success the in and are we employees keenly growth financial that turn outcomes for drive them so and desirable In aware we company. in ManTech’s ManTech’s positioning in summary, have investing will prospects. in

in ManTech large solutions with dovetail We favorable and environment a continue demanding customers operate to offers. market capabilities that and perfectly what with

and an first with mission the training customer makes that, choice of take opportunities Our focused With to coupled are questions. ready ManTech your employer ample we culture in development industry.

Operator

Capital. Instructions] comes Joseph first [Operator Vafi question with Loop Our from

open. line now Your is

Joseph Vafi

Hey, guys. Good afternoon. Great XXXX. year for

proposal parts provide and and year? you two activity may for I wondering out improvement. that. moving margin more for was on bid shake the I XX-basis-point be have there may you to that Do those or said just profit congratulations guide the know you on any detail might the So margin guidance G&A relative gross some XXXX, between of on how

Judy Bjornaas

Yeah.

I in then business from revenue see, little G&A will the or ODC we bit as a the of probably standpoint. drop look come margin percentage bit a the will think, as down steady general, little of gross a a just through coming and we at mix hold

Joseph Vafi

QX, in shutdown was was like profit -- gross or Okay. related little sequentially? profit that growth mix a impact a was mix gross coming there really that And margin down bit just if and over I any that

Judy Bjornaas

quarter of That into mix related. year. is the and the We heavy quarter ODC fourth typically third was see

Joseph Vafi

trending risk, you higher that of there’s on business how a for now based just contract, Okay. far? award, you feel risk, going do get that milestones trying to versus on to so And you outcomes then relative think versus higher are are piece how on your playing

Rick Wagner

this Joe, Yeah. is Rick.

over the We years several wins. couple us have that several that wins in direction, have made last large of moved

new are take them solutions So and to contracting. moving through use looking vehicles I we influence outcome-based can to at our existing to in are think that direction well quite customers that we we

happy making. very with we are am I So progress the

Joseph Vafi

okay. And just ahead. -- Great. then Go

Kevin Phillips

It’s that on extended it’s specifically still program. is question one it’s track. your on ramp-up, process. that an full the But one think so XXXX has I

Joseph Vafi

it. Got

in starting And business involved know know clearance are for of see you reduction -- side that mentioned up the then, of you of any XX% that. that Okay. -- backlog, just of I benefiting supply in that a yet? overall to I benefits statistic Is two that backlog include Thanks Kevin, are in finally, this congrats, security on see term point just you the lot. the at kind macro the to

Kevin Phillips

Yeah.

things some, is the spotting done see DoD to the it’s they that in favorable, other there is continue generally to and on and So timelines some see it specifically think on of I agencies. the starting lot XXXX. there’s a get But to we focus will side are reduced trending improvement

So and government it’s set. right the still through needed people, talent skill finding the and industry can clear once that right bring we

clear that we So issue. on one is goal focus through so core that can the

Joseph Vafi

Great guys. Thanks a lot.

Judy Bjornaas

Thanks.

Kevin Phillips

Thanks.

Operator

comes next Thank SunTrust. And you. question our Tobey Sommer from with

Your is now line open.

Tobey Sommer

Thanks.

The normalize expected operational DSO Judy. need for to improvement in kind an mechanical, Is anything standpoint changes be might things? to order the first do from in question or of all you

Judy Bjornaas

tell It’s catch up. But from QX how little those see the improvement delays. timing are we quickly definitely in it’s Hoping, mechanical customers shutdown too No. going thing. will a early a to to

Tobey Sommer

first quarter. Okay. But half first not if

Judy Bjornaas

Yeah.

Tobey Sommer

across in Okay. there type, compare metrics, contract of to a compared pipeline it’s would is backlog? the duration, difference the Kevin, operating pipeline the margins, you typical kind to current backlog how the whether of much

Kevin Phillips

on will areas. I Yeah. two focus

be three maybe years an to four is years. the today, First double, ago, think of at the you if six of to average look duration, backlog from though years might backlog duration compared about I all, going our

securing mission still of providing that of definitely requirements cyber enterprise Those are significant numbers. they and seeing how certain technology are growth. procure. awarded. a dependent the a around and customers seeing mission a demand the contracts are more specific activities, of much type The contract And lengthening composition, So around favorable to you and we digital are operations, There is within increase all those in the areas. platforms, rough IT is order in environment very more are profile on

I outcomes plus, The work built when continue. to is some a stick with the near-term are cost trying trend So over going procurements years based are and question that customers going few in towards see that and the we that customers still is few DoD how trend years. to many to procurements over into think and next how the gets

Tobey Sommer

the does And are changes you follow-up the that players backlog other able down, a on faster, the open being reps fill backlog, if that and in to the continues company, to what come implications Okay. and what clearance of it for implications? are growing imply

Kevin Phillips

think, I In implication industry get program. and quickly. large, continues our the this the continues, being If is to by talent trend able a more onto

whereas get can we if once to might on before earlier. XX people program days to So sometimes them then them identify days longer, the we the bring have days, takes XX starting it get contract and XX or it them taken to

if trend. think effect to So that like effect to going have it’s or of a maybe like to it’s I a be positive going that, a but half good think a quarter standpoint, from you revenue want something

Tobey Sommer

into trend have you momentum expect a this to it Is year? that

Kevin Phillips

going improve to XXXX. into it expect I

our the that to that, industry within can and everybody we think mission I meet focused our government, talent on both think is within I requirements. customers so is important

Tobey Sommer

we we out a that had argument how on high the year, at looking the XXXX, for over Okay. now next after in think the towards shake your are do outlook things point? you level What this of portion are kind shutdown budget thoughts budget,

Kevin Phillips

the the that focused most caps decision clearing how towards makers BCA will January are of by We and on work ‘XX.

the is we that I have that’s there that for focused support make wants right item the are to and a everybody think path on. that sure level foremost defense, we

are budgets DoD the of side have $XXX in between ranges anywhere about $XXX million. that and been that, Beyond talked million the

if But flat be to it’s that tracking. the debated, think that the we I all it’s are a tell out. between is XXXX. in going to Again, X% where against that the main to somewhere up thing comes those ranges BCA are too growth early are cap year-over-year

Tobey Sommer

those end And growth $XX kind that range any of outcomes you palatable in kind wide firm? of the that lane for through you the within for influence highway, does growth either have of to substantially that outlook your and billion aspirations or of the

Kevin Phillips

our they of type I just we needed. doing think areas work to are and any think for have that number sheer are if in work the -- that of to of are impact palatable to about FYXX we you we that us, the in, expectations people type are and not of the because are the demand that going talented

That does the of segment the of demand we industry We that, visibility able higher to on it work think, are to if have good for be end we all the on that said, question respond go I how type them. do. of going be and support to in will

Tobey Sommer

you. the queue. back I in Thank get will

Operator

next our with And you. Williams Thank Drexel from Hamilton. comes David question

now line is open. Your

David Williams

you afternoon. question. guidance, this what given to in the Good really I in from to guess the would a quarter perspective, spread has the your or maybe kind of to there? what of top the guidance was I maybe the included that the or what take you that risks higher go that, end way revenue, end for do Hey. terms between guess, are bottom think Thanks

Judy Bjornaas

Yeah.

number is So existing backlog. an at of the -- midpoint of XX% that our of guidance about our

just of as So and new it’s ODC well ramps, contract really timing procurement. level of matter as a awards the

David Williams

business your And either you that entire do Great. security how just the ordeal impacts late. of kind around border and in or kind that I anything homeland there view there of maybe of Okay. terms some there? and the then Is discussions as benefits of guess that of

Matt Tait

is the think, for you How doing? this I are Thanks Matt, So, Dave. question.

are security the are understood around border right that they focused, areas and focused that’s I we way for correctly if So national in. you security that in the us,

is been are have for things our that problems. solve to we the going with all clients essentially working on their that areas us, So

in And that headlines, that help the things that anything I So and actually the that environment to are you are help. hearing about, get up then those we think right. step are areas

Kevin Phillips

Yeah.

So agents a the customer. core support and that’s the for border it’s and so company, technology around technology the one various our analytics again as the and patrol of

David Williams

I of at Great. pushing that ability you labor is what you the guess, lastly, if aspect, saying to landscape outside your look the restricting then is And pool, clearance that pool, that there ramp terms you see in just this some your are out the generally maybe anything timing improving, of labor of maybe growth of programs? or of

Kevin Phillips

Yeah.

I we the are for folks. base be fill So hard going veterans competitive and company, analytics is about technologies very cyber, and to is that towards it and degree end higher as that would paid veterans it’s programs are say work the internal of to we newer a training to proud of needed We it’s offer that around environment XX% employee skills, employees very and generally, to our a as and cloud, what and and other those retrain company like. are

retraining So the targeted with right in to a the shift skill activities those there is the getting I of need workforce going training think increase to this -- everyone we existing for is I personnel. that think, on said, academia to the seeing broadly the the are more right industry and That industry, being and sets. focus curriculum people on continue -- broader about number the

trend that’s now. big right think very our region at in a least I

David Williams

on fantastic the and appreciate quarter. luck it Certainly good for the Thanks color. Okay.

Kevin Phillips

Thanks.

Operator

Spingarn Thank you. next And comes Robert our with Credit question Suisse. from

is open. line Your now

Robert Spingarn

Good afternoon.

Kevin Phillips

Hi, Robert.

Robert Spingarn

to tend I Kevin. Hi. these backlog questions. ask

but We I have ask had couple, wanted more. to one a

over where six years. about an also explained have to does of follow in where $X You we on six you those did If two, then based just amount is little today, three talked in of a year about less pop natural the years billion duration it’s in there particular years year a from in extension years, circumstances year growth? one -- backlog fade X of doubling got ended, the about front that or they is and then a a four think backlog curve, the there’s it that

Kevin Phillips

do they the the contract pretty an for mission of adjustment of ceiling might anything, increase needs. they on customers do, the solutions services existing we When on they the get have ratable. are based type procurement unless back If to end, to a and redirect much

you systems. back we So have think based to growth, like But end against as as back to tend would end to they more for terms opportunities tend product in tend predictable weighted growth. more not be that these of

Robert Spingarn

was to Not X% to billion the sneeze massive am there wondered captured, is you at, other right -- XX% for $X see to you just number good when than that’s and this Okay. I mean, a extending just that further I XXXX. anything I $X if else move billion something what out there. have to

be bit total rising best the as go margin some price see guidance opportunities gross on pressure we fixed to we might percentage we of similar mix, forward. as more than more margins Now, to was as value thinking that upward a you little ask question on the shows? seem side, I here, wanted see and might I to a

Judy Bjornaas

Yeah.

as from the general momentum. not here sitting it has thought ago, in see quickly year happened have a as would cost-plus but away think do we I increased shift we

to still also basis headwind still this ‘XX, a to and are We are that able having LPTA But looking accelerate think should be XX think ‘XX small from expansion after we into year, basis do to ramping a margin year. points contracts we we out. points do XX

Robert Spingarn

got have me, in be the trajectory, looking CapEx this I if you Okay. XXXX. what still forgive missed I And for Judy, but then, and should we while

Judy Bjornaas

is Yeah. to large related We outsourced said it’s and going contract. to that be revenue up X% to of services X%, this

year, the that program. the is of course work ramping insight to when better over that technology a refresh we As through on required the be of will we get going into

Robert Spingarn

you. Thank Okay.

Kevin Phillips

Thank you.

Operator

question Thank Joe next DeNardi Stifel. our you. And from with comes

open. now line Your is

Unidentified Analyst

is second shareholders? you company’s in your on kind in time the back capital especially priorities, of This many This have deployment returning as you for Jon on then years where cash [ph] the is guys. Hey, to elaborate Joe. increased dividend. Can

Judy Bjornaas

Yeah.

thing going be to right capital but cash do M&A. company’s in I growth think XXXX, to clear we given flow our continues think we what it deployment is the felt be looking going and at preference for to was that the like our

Unidentified Analyst

can is frothy. on view the conditions your kind current of favorable, when look Okay. And Judy there bit out it little touch too are you M&A or environment, in still guys

Judy Bjornaas

It the in there hopeful focus in properties it’s be competition. high us are for there’s that properties, deals make number of increased for I we done us. sense -- it’s getting when think successful the a values, think, to they and But going for sense I continue a we area are favorable will good that

Unidentified Analyst

need And talking then the of of analytics especially really lastly or to does an environment trying in mix, targets cyber pivot kind into? cost and areas to ManTech expand expanded that the price growth hit to work are in type in work some maybe the you just the its fixed potential there to is of about plus guys Okay. those

Judy Bjornaas

Yeah.

some higher of and value little at do on which think from to up, plus to is solution we bit for I room more margins a there when see move environment, fees. are even innovation customers best cost for those can if allow looking we look even, starting especially a

swing it’s is the room So, big little mix. but from changing come of going a bit the to

Unidentified Analyst

All guys. right. Thanks

Kevin Phillips

you. Thank

Operator

Global Thank from next with question comes Alliance you. Brian Kinstlinger And our Partners.

Your line now open. is

Brian Kinstlinger

Great. you Thanks. Can hear me?

Judy Bjornaas

Yeah.

Kevin Phillips

Yeah.

Matt Tait

Yeah.

Brian Kinstlinger

Great.

question… only I have one So

Kevin Phillips

Hi, Brian.

Brian Kinstlinger

in seven … am what’s for and what the a forward? say was because the been outperformed. I you of I learned management going more the If first lessons at team changed the last decade, and terms would wondering a have recently sustain -- where I asked. lot laggard that how and the Thanks. you of how years metrics have topline ManTech look questions

Kevin Phillips

Sure.

quite time to to right. there a company mission-focused up have So, the Iraq a Afghanistan it to expands a that’s going the ourselves do said, will amount time expect the from to are broadly, that. the why time not support we war specific and to that of program are to we we look fighting have much if seeing and that rewards greatly we bit With a technology forever. where on building do mission capabilities decline time and spending that’s because position that. and that of that the record like also is are of focused -- to and contract headed and we very area needed did newer to that future and in a We from time, getting talent we frankly future that do just capability search was market be things been It’s of thought technology will forward

in main think be that the view, have to on to technologies investments I is we future mission enough want the and that leading nation. we position continue and make support industry in are sure an topline the takeaway sets those ourselves is to that that our our to critical

Brian Kinstlinger

years? and last the of difference few where But there a investing of are learned towards There is think is portion post proposal. a dividend to two huge shifted in I what on laggard just mine you the in dropping continue lesson very are are and invested you still down years products those small understand line, level. counter the trying you am top how to do to investing

Judy Bjornaas

think the during drawdown are those seeing that I those years. we of success you made investments just

years you I laggard budget cuts. when was are are struggling of talking about think is the reduction kind the with everyone just

Kevin Phillips

Yeah.

Brian Kinstlinger

Thank right. you. All Okay.

Operator

comes Our next question from you. Cowen. Gautam Instructions] Thank Khanna with [Operator

is line now open. Your

Gautam Khanna

wondering Yes. could… Thanks guys. was you if I

Kevin Phillips

How are doing?

Gautam Khanna

this If or based just you can quarters, year, when schedule might about you come could say the this which like is -- award anything will going QX be think year to through that. on adjudications, heavier talk be big like you of the QX where be another around bookings

Kevin Phillips

Yes.

bridge first think award especially But that be of it’s the the to the of terms and the volume. QX been both QX year of first periods between So hard because will bid be the volume more in one half now will developed. right generally award above the still and I have patterns average QX standpoint, an the half from year, heavier of

Gautam Khanna

based us I look, deals. Okay. And it, of recompete any on XXXX a average as how could does below you -- it’s also in recall remind recomplete, terms but

Judy Bjornaas

Yeah.

their than XX% your a on where I because we is. right of it say from I a being expansions one-year, don’t early, see waiting am typical some two-year. sitting are what XX% now But higher would little think of you still length to to these the I see if it’s

Kevin Phillips

multi-year on note quarter that a extensions are that, were for on And sole existing of our basically XXXX bookings I’d in awards. programs source

less trends have side. already customer booked So because in, what on may been is those competitive those based with activity, you see the

Gautam Khanna

you, helpful. And you Okay. remarks That’s just cash the your then, for flow delays prepared maybe in Judy, talked about QX.

So how curious up? presumably gets QX caught am just will be the bigger quarter, I this

Judy Bjornaas

Yeah.

on it’s those we how QX, up. I be to going it’s to going a think and and between see quickly things dependent split just QX catch be

Gautam Khanna

any your XXXX just you in shutdown? to have did I And from impact guys curious… a am sales

Judy Bjornaas

We… Yeah.

Gautam Khanna

sales? was what lost the …

Judy Bjornaas

said We in million was QX. $X it about

Gautam Khanna

Okay.

Appreciate Sorry. I Thank you much missed very guys. that. it.

Judy Bjornaas

Okay. Yeah. Thanks.

Kevin Phillips

Thanks.

Operator

And our from Fargo. you. comes question Thank with Wells Edward next Caso

open. now is line Your

Edward Caso

you. conversation cyber anything your give? you around focus and and the color space, so tend Is and all space Intel, lately space to together. Thank How turning active lot are go Whatever Are A pipeline? you obviously, agenda? you forth, can Great. on it of there? in your and

Matt Tait

Matt. Hey, question. Good Ed. is This

think, so, And I I will will start, finish. Rick, and

of focused space very based we strategic that the this we area, one So areas is in. are in

us good when the focus have that great when with aspects to to be area across This major is for got want work the space try a digital -- on. bringing to you and we We combine you how mission. all

think Rick? I where DoD from at So areas least are there. definitely pertain, we fed mark our that the making and yeah,

Rick Wagner

portion And clearly across the a intelligence community, of it’s that. big

of area combination satellites, the be into. big that’s resilience on we pushing it’s you like cyber a going to and big of hit think and that and I area a something it’s are

Edward Caso

category So investments of products awards? into kind to and put the that some sort their competitors property, to skin on of game ManTech seem where quasi your of fall stepping help in contract some focus of be to some drive up intellectual willingness

Kevin Phillips

to is have what nation’s call to to goal our best support tailored broad to -- community war to going Our going They aren’t focused the CNO to we develop general I’d to view and provide it’s fit be When is be the very things like technology customer. be things, intelligence our that. to that use. support narrowly stuff and to and like fighter talent things

are or towards we trying of work agnostic more into offering open providers solutions building using architectures. focused capabilities So being and to on source open and

technologies we can going and answer services, looks or to internally the be may There and But are. meet mix are that development of we the to because the selective to not product and like, products right selling then something that’s there we customer. provide that’s trend towards do market. have it to further becoming a whatever things do advance if we that selective going solution So acquisitions,

Edward Caso

question both top and is around the And end. my end competition at bottom the last then

to have any and We larger are the become sort has other have asides? play business end, to card you. the the And and then on sized players, consolidated small contracts on as big the of obviously clients consolidated in that sufficient ManTech these of a set shortlist change larger also a to from you is the Thank impact calling IDIQs? seeing

Kevin Phillips

Sure.

for the So favorable would say are that change some there. And more a procures after business types other ourselves. activities look as mission be to can seen size decide certain the government spotty. that requirements haven’t position I programs the of asides that fairly contractor of we how there we might to to but the are procurements procurements small set largest, and and of static. a on be lot I’d that’s prime very whether and go those the for consolidating side,

not say, procurements We let’s have not then, the customer our and side, found the consolidation industry. of

anything the competitors might we able that of fewer consolidations. not compete, are as As a be such if there to result

we think in And good so that a position. we are

pipeline, found supports become for over think that position. the to the last scale the that we our in two sake in need of scalable our haven’t We growth years

Edward Caso

you. Thank

Judy Bjornaas

Thanks.

Kevin Phillips

Thanks, Ed.

Operator

to over And this further Vather any like for Stephen you. any not now remarks. showing I I back further turn to am Thank at would questions time. the call

Stephen Vather

Daniel. Thanks,

for you all our members available ManTech. and senior your today’s of for Thank questions. be your in on interest team follow-up usual, participation will As call

Operator

Ladies a gentlemen, Thank conclude evening. this have wonderful your and for you conference. does and today’s participation

You may all disconnect.

Mantech International (MANT) 20 Feb 192018 Q4 Earnings call transcript