MANT - Earnings call transcript Q4 2020 | Mantech International Corp

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Operator

Good day, ladies and gentlemen and welcome to the ManTech Fourth Quarter Fiscal Year 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Stephen Vather, Vice President, Corporate Development and Investor Relations.

Stephen Vather

Welcome, everyone. Thanks for participating on ManTech’s fourth quarter call.

Kevin CFO; Chairman, COO. and is Judy and today our Bjornaas, Matt me Phillips, CEO our President; Joining Tait, our

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

discuss full these the and entitled latest of a no information financial uncertainties, update provide of GAAP please other evaluated Risk substitute statements our we believe obligation performance risks investors. which For for in some and a other undertake any non-GAAP should made call. isolation our we on the discussion factors in this not filings. and useful measures refer section Form forward-looking We for measures. non-GAAP to On These measures today’s as be SEC to XX-K or Factors will call,

a fourth reconciliation our discussed this to measures on of call let non-GAAP hand the in over Kevin. find With the earnings call me release. quarter can that, You

Kevin Phillips

for afternoon, Stephen. and Thanks, the thanks everyone call. Good joining

throughout our missions. and results, and XXXX lingering and challenges, forth our am critical few employees operating want quickly environment. I and customers One for and a continued the support pandemic, to are customers within they while their first Since Despite generosity. crisis, to start strength those Before want into have our unconventional managed have outcomes the for only challenges customers’ off. employees’ the communities. pandemic. great raised I we and to their most business their year impacted committed you our through critical do showing XXXX continued willingness they the satisfied thank for ongoing our beacons also our to personal but to those you excellence focus delivering our employees with by perseverance of people for on customers, I walk safety over their want I the both thank million resilient employees for our enable this keeping adapt to critical on a pandemic. brought updating spend I Not minutes how the and $X professional remained steadfast missions. our

position. Our commitment acquisitions to across expectations Technologies and full add We a am robust generated XXXX cash welcome all organic footing. and pleased to margins, capital cyber Minerva our new of intelligence retained exceeded the both In backlog. fuel within leveraging capability and financial to our executed existing employees enhanced Tapestry our consecutive and of the and the continued community into quarter, from for I closed growth, did fifth the the solutions strategic to family. small successfully to record year flow our on deploy our the that Engineering we we and measures, two profitability so out long-term year ManTech of healthy fourth team through growth and Department solid on look performance delivered spectrum the forward Defense. growth increased customer the I business talented

through ample M&A, prioritize add to capabilities. We creating financial continue have that to differentiated value capacity our and acquisitions we’ll

provides pleased expectations of Consistent the for for visibility forth that their NDAA clear customers with This billion were offers ‘XX and thoughts mission-critical the few enacted December. FY market the $XXX funding ‘XX in the appropriations a environment, the to last FY set on Defense. budget Department requirements. under Now levels the X-year am I deal, in for our appropriations

events our last have passed of transpired, Act through catastrophic of important CARES extension late Section elections, and attack. vaccines multiple March. an a legislation a XXXX the coverage the in cyber viable in including was announcement Since of embedded number Additionally, COVID December call,

the have our history, The of as Over and year consistently well security threat and executed growing course new with and that different rapid Congress experienced to for XX-plus understands White elevated national customers, priorities as recognizes irrespective political for threat kinetic. not those our technology the across administration the threats. the and House we these global continued need solely has complexity composition insertion of are of and of the the trend vectors multi-vectored combat remains The threat challenges. a environment environment and

recently by hack. the SolarWinds course, Of most this was evidenced

advancing is expect As the well Cyber few will administration aftermath our be a and points of customer big our we domain in missions a as be the integrally mission and ManTech cyber number today. record across continues track a evaluates responds in are and of a a as response national this to that of has clear. hack, priority this to cyber multi-decade the customers focus involved area. posture

digital to systems years. priority customers’ cyber automation sets our IT government domains over also aspects and but not federal across believe longevity expansion our the and mission cyber, including providing all to ManTech Overall, customer modernization, well experienced the warfare, addition is levels intelligence administration on that focused last demand engineering. few with I as as differentiated areas, and solutions In span modernization of other which only the to to the the of is is continue well positioned that support analytics,

market book-to-bill. offer the consistent focus. am XXXX focused with we and XXXX volumes me and relatively disruptions from thoughts the constant accomplished with on pandemic, in we proposal operational execution in our this development and X.Xx annual business the expect year exited We level going what pleased and maintaining look competitive remain brief with submitted this some forward to Despite a position Let strategic differentiation I market. an into said, the XXXX. That remain we to on front. expanding

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

Judy Bjornaas

Kevin. Thanks,

XX% year acquisitions. on organically. XX% a was existing Revenue The value our continue with the We execute wins, by our strategic strong well year-over-year, contract new track up creation. primarily upon with focus to long-term growth and growth on for generating programs financial billion, $X.X driven build of results and record was

up quarter, was X% revenue million, $XXX fourth XXXX. the For over

full both quarter For driver year, our of critical growth. direct labor the a was and

from Our was unchanged pricing XX% amortization EBITDA was In contract contract mix XX% breakout materials. onetime comprised quarter cost QX plus, of an time the approximately benefited EBITDA X.X%. structures XXXX, prime of fixed contracts or and our revenue, of year-over-year. facility adjustment. and margin for EBITDA largely remained the XX% and $XX a million XX% price

the of impact the for of XXXX. the quarter consistent have margins onetime this Excluding been EBITDA with balance item, would

continue lower X.X%, from improvement. Strong XXXX, to utilization as direct exceeding and the income and basis up provide expectations points labor usage tailwinds Net was $XX indirect For our margins. up to diluted XX EPS for the million and cost as management was well million, margin $XXX was year, QX. was margin EBITDA for than PTO $X.XX incremental our accomplishing XX%. more EBITDA year targeted

income For year, $XXX the diluted full and million $X.XX. net was EPS was

As full and diluted adjusted was income Adjusted as benefited the a acquired EPS EPS, related reminder, XXXX diluted XXXX intangibles, net credit excludes from the which tax of adjusted EPS both impact and more growth. the R&D $X.XX, Adjusted XX%. million amortization to and diluted R&D pickup year QX operational up our articulates income representative net well impact reassessment was a and $XX of the tax multiyear income net credits. of as

income EPS net $X.XX, adjusted adjusted year, the XX%, respectively. XX% up was $XXX and was million diluted and For

Now sheet flow and statements. to the cash balance

last operations, For X-day at million a cash year, X.Xx DSO from year-end, in was year. $XXX the days net from improvement collected we flow a income. robust XX

we mentioned, on Kevin acquisitions the executed As fourth in X quarter. smaller

a maintaining Additionally, to cash $XX the debt. shareholders. million return distributed and we million million dividends year, $XX year-end, had steady in of we for At in cash $XX of

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

we implies of to and of The Now approximately expected guidance be billion from $X.XX to growth revenue $X.XX and XX% expect between on guidance, XXXX come backlog. to is X% range billion. revenue current midpoint the our

With to business. timing for in an new in balance years, faced recompetes we and variability seeing particularly the greater compared few awards, of new are XXXX. recompetes last the level business, from the increased And we of

guidance for incremental Turning potential assumes offers of margin up margin our an EBITDA to to margins, year, XX improvement the which X.X% basis of to X.X% the for points.

However, normalize in in usage, we expect driven part XXXX. a labor headwind utilization, by that direct PTO strong and average below be will

CARES the our Act could from contract ramp recovery the material level, procurements, factors the that awards, performance of guidance other duration pandemic, path trajectory Some level influence of our revenue of and of reliance the and and timing include the within of and margin XXXX level the coverage. the of the

and income between resulting assumptions million for into models and diluted an for guidance of for between few built $X.XX an our share least operations EPS A $XXX million for adjusted million XX% guidance effective shares. $XXX.X million Our XXXX is and XX diluted count your year. fully net adjusted be rate the is $X.XX. flow should and tax at Cash from a of $XXX.X

All capital. of working the year-over-year decline to is attributable

from for We which of is X.X% the of expect year, XXXX. revenue approximately down capital expenditures

highlights Now, over development to the Matt in cover quarter. the and operational to business

Matt Tait

Thanks, Judy.

on Overall, book-to-bill, the highlighted Let our quarter, contract me which a we of the in we book-to-bill. million to X.X awards, X.X earlier. secured Kevin resulting a expand business development a $XXX with front. what successful XXXX, $X.X leading won had awards, we contract In expectations. year billion fourth on in In aligned

of New for business comprised approximately XX% the year. awards

was basis cyber, capabilities enterprise year. of and and evident of intelligence source spectrum and base engineering, IT, awarded in a programs on were success mission intelligent sole bookings across XX% key Nearly our operations. the Our support systems in our our full customer in analytics

billion. our As approximately with of a total qualified adjudication. backlog of stood awaiting XX%, XXXX, the backlog exited year $XX proposals with our XXXX and strong over at billion up remains of $XX Entering billion, billion bookings, $X.X $X over result pipeline funded total we

mix Our expectation will and relatively submissions work. the is recompetes throughout that a for steady even of new there proposal year be

to focus across customers seeing analytics, capability our on are across edge solutions and automation, with differentiation XXXX multiyear further continue our in computing business capabilities. We a our engineering. demand develop cyber, and will systems journey

Our capabilities and a fundamentally priority key talent such, remain as and developing and us. are retaining talent attracting, for intertwined,

be our analytics offering of that and an Campus. employer industry. initiatives to will access people. track have And We our This offered the on tuition-free Global choice to recently a of many be University advanced our Maryland record of of announced by drive is degree in investing strong focused enduring the talent we in one most the

clearly prospective call the hand remarks. virtual back proposition to and is Our to closing articulate and talent environment to let ManTech’s over our existing operating in for me that, a critical. ability demonstrate value With Kevin

Kevin Phillips

XXXX our with Thanks, In pleased performance. Matt. let we me reiterate that closing, are

well executing building and customers, We’re to employees to our long-term foundation shareholders. this value and on deliver

last Our agile our and remains administration. strategy With evidenced and and proactively to the Core we look to of your do as our complex position take to handling We ability priorities is business nation. challenges talented the through by operating of our the ready focus a questions. with quickly customers sound year. business the agility new are employees to remain interest and pivot XXXX to is the enabling national best philosophy the navigate empowering demonstrated that, of as in and we enter to over operating our and what

Operator

Instructions] from line of [Operator Our you. Thank of Cowen. Gautam comes Khanna the question first

open. is line Your

Gautam Khanna

Yes, Good you. afternoon. thank

Kevin Phillips

Hi.

Gautam Khanna

XXXX, frame in what with to that you how big – guidance a if you a just amortization, large add-backs? specific can there is – have question respect that? first, I is there have any the the like year-to-year and a Is change to

Judy Bjornaas

to With amortization? respect

Gautam Khanna

delta the between adjusted EPS. and GAAP And Yes.

Judy Bjornaas

It’s primarily amortization. just intangible the

Gautam Khanna

It little or year-to-year? like below trying just minimally. am I is looks up rise bit line, that higher, counts does And whatever, down like the a to share – rate frame Okay. tax minimally

Anything XXX,XXX be something. a we below else non-operationally? should share think about or thinking it’s the I change line or

Judy Bjornaas

Yes. The amortization year-to-year. bit is little a dropping

Gautam Khanna

Okay.

this you awards to kind COVID seeing given a I for with to procurement cyberspace on make the little just respect slowdown intelligence I The like a in we anything I wondered understand and call their if other are since environment thing, any sure about course soft. have incremental change Booz just seen And comment or activity? last made being just you the want of of pace is Allen Are the the par in? – quarter

Matt Tait

Hey, Gautam, Matt. this is Sure.

a change seen our not have perspective. We from

expecting that QX happy have with that But we the that’s year. – we surprise because was what no book-to-bill intel. think that last on for expected actually especially mean a and few in we us X.X in so X.X the us. soft were telling for calls were kind choppiness, we there is very seasonally the for with been I – I and of you defense there so – it’s is have

Gautam Khanna

you change. the the ManTech’s are might Do any you no juicy from that saw in to expect? then come more how we deals Are will so Okay, pipeline opportunities more can than those market characterize you have done what And M&A recently? we might and bigger you perspective? properties in and stack lastly, see think up there to XXXX XXXX potentially

Judy Bjornaas

last Yes. We a XXXX active on ended XXXX more do we than few were very expect year. be up front. the – to much expecting midyear M&A actually active

– has we DNA are that going plan going the customer M&A want give to leverage to fit continue in It’s making within sets we focus to strategic expand and that on our or So if been deals at made to are I on. us but and capability and this valuations look high. well and very able to we for properties are surprised a weren’t something us competitive continue we as sense year, market aware, would it to are is very find be and you our that

Gautam Khanna

Thanks, of guys. luck. Best

Judy Bjornaas

Thanks.

Kevin Phillips

Thanks, Gautam.

Operator

Thank you.

comes from of line question Truist of next Securities. Tobey the Sommer Our

line is Your open.

Tobey Sommer

recompete you if on? keep particularly on wondering give business that some color the discuss timing year eye your and was and detail should maybe we us this could any of calendar I you. of Thank pieces an chunky more

Judy Bjornaas

really X% into slip have any see We our kind even have than XXXX Yes. XXXX. number recompetes. We a don’t greater that We of are revenue. any of large recompetes don’t did of out programs of say

existing little the bunch up balance of second and but a recompetes, nothing bit year half crazy. kind a XX% of of coming about our guidance kind Still, in So, from from seeing split overall, of backlog the recompetes. midpoint we of are our the and between of is new

Tobey Sommer

last get which opportunity Is for on see give well you to recompetes that? couple the years obfuscates if been need us there like or up it you to of has for there where recompete extension have this performing year your you perspective are can over coming your of go an of sort sort you clients and that so competition an could the

Matt Tait

a this as That one that we Yes, the use is part definitely levers strategy. our of Tobey, Matt. of is go-to-market

we while that on conversations – comment specifics basis we a So, can’t are those definitely on is – contract-by-contract definitely ongoing.

Tobey Sommer

think be in recent the And years? reason that would this success has year been any to How rate different?

Matt Tait

look bookings next full I we our source XX% definitely if our – a we were going year. to think very go-to-market last awarded Look, I you again, think I a high on that part at – healthy is That’s basis I don’t know, of pretty it year? but are number. can’t focus. of be are –

Kevin Phillips

so and Yet, were you within there Tobey, only What Kevin. because across space acquisition think there is some see I last government. delays is will it’s of COVID. the much year workforce capacity the the

causes and what about spend on make that’s or So, have standpoint recompete what competition customer as time well. to they major a across delays choices from do they their the

what have it on can much depends the they that accomplish. very they and capacity internal So,

Tobey Sommer

sort and billable maybe Right. hiring for ‘XX, or from of perspective and to talent now a the could internal about to towards talk about year-over-year if achieve it speak want that is growth and what basis target Thanks. kind maybe you discuss your environment? end growth able year headcount you you for on of What

Matt Tait

typically statistics, our our we this – as for don’t mean year, I but growth we evidenced were past results. Matt. the is this drove year so Tobey, So give by the headcount DL

we been happy the we very doing. are have that with So hiring

growth DL a have in similar drive that of going terms for. in kind are And we ‘XX into so looking of plan to we the headcounts

Tobey Sommer

externally should looking think of and of DL any Is terms in major the volume thumb of rule apart breaking at would be that which two components and we there price?

Matt Tait

Yes.

a So I moving solutions so Tobey, one-for-one and on of it’s that, organization are because exactly wouldn’t not we just over-index a based to more there.

Tobey Sommer

the just takes? contracting give demand the you kind and Is versus those discuss Okay. and could of the puts activity talent that, hiring win us Maybe on growth? marketplace a hiring and rates environment and constraint

Matt Tait

sure. Sure,

of Let in a – would of cleared to yes, right? so me about think answer So people more perspective, from the I an on do the work. to overall population love we things kind – couple just you industry set talked make sure I there, have

that about right, space. has as part, around heard into active an bring talk You’ve something market in that’s can us that, so of and federal leading Kevin the reform driving cleared folks overall talent been terms getting we more

look, large kind for been But specifically that’s us, very say, hiring commentary. successful So of, the I’ll talent. we’ve

that last recruiting of the As a COVID the technical job done that has we’re on rotating our towards mentioned the phenomenal environment. the call, areas focus team business within I

it’s we’re Kevin, mission go do still able do to looking we’re but do. want to you And work the for set that that a environment, folks want competitive hire Now to... the we to

Kevin Phillips

add something. I’ll Tobey,

to be different – talent new Just those in the in programs and procurements that they see important excellent that unless all on-site the work. work, industry to ManTech. have level the biggest you hoops, clearance our the And awards talent because largest so also clear and delays. influx, delay it’s for for will new do getting individuals in the have it’s that through likely just COVID physically people really the highest will not the type the have But both of those higher

Tobey Sommer

you Okay, further, Last this impacted flow you capital please? explain missed me, a bit thanks. that That’s have working helpful. may I Could for you. Thank I by thing year. little cash heard say it.

Judy Bjornaas

with in or year. the working happen slightly – what requirement XXXX, least capital is in that’s from by in at – DSOs and CapEx requirements the for basically and quarter XXXX, down just what generated $XXX flow guided capital We which we Yes. cash driven might operations other million from in

Tobey Sommer

to may those COVID-related? factors what for make you those payment Is what customers? things that new want some to as bidding for happen? different elaborate are are terms, accommodate you Are you Could factors? What it with

Judy Bjornaas

see saw the of a coupled think – – that that with alone kind DSO to almost X-day gets We the getting that was with that cash-out pushing money us the the paid given it If with in in improvement hard so XXXX. reduced and trying I that level, that businesses make related us we gets a up, growth back that to ticks say. nothing was incentives, seemed unusual. there’s small in like economy to to sure if government environment, COVID did

just historically to as they cautious payment little normal seen more we’re return what being on So we’ve if a cycles.

Tobey Sommer

That Thank you. you. sounds Thank prudent.

Operator

you. Thank

Our Matt of next the question comes line from of Sharpe Stanley. Morgan

open. Your line is

Matt Sharpe

Kevin, good and evening Judy, quarter. Matt nice

Matt Tait

you. Thank

Matt Sharpe

Judy, implying quick cadence that guys at on year? the was bookings just the midpoint. then like like look real to guidance, end the this need X% for And push you the high it’s to – the revenue looks organic or growth? to is the What up range what book-to-bill of

Judy Bjornaas

It’s a combination.

strong is midpoint. of versus also organic X% quarter how of at the in, comes up that. a kind second it’s So answer quarter, they or and awards much new from all And factors so getting versus top impact about the in have fourth first could line to the the when I happen your we of book-to-bill. it are to us that would And But if think really question, midpoint so the timing that’s change number. the recompete going

extensions recompetes, well as think prepared the factors throughout COVID remarks on I CARES the that just the get the awards, I – of kind are of the material factors range. call timing as So about procurements in Act that us that mentioned and

Matt Sharpe

it. Got

any COVID of And just mix-related, then was or much margins. material are XX expansion I the underlying lower of am Is on up And question, pass-throughs? How the sort XX of in sort XXXX was sort is here of there going pressure bps XXXX? e.g., there either pressure You of how bps. sort Okay. of much to on any with where flat performance? –

Judy Bjornaas

Yes.

basis I uptick added the we about QX, course margin. point had So mentioned of EBITDA which a adjustment the in this onetime year, over XX in probably

talked we a slightly from about is had tailwind it of labor really and normalizing, that under. think bit strong little or more is I indirect a we performance, spend – utilization the direct really headwind spend which

looking focused headwinds think there. do I with we can labor but improvement, point So spend think a get basis are and to something XX utilization, indirect normalized we given still those more on, returning is to we

Matt Sharpe

out if and it. or some I have potentially pressuring where of time a then Got to our in one dynamic XXXX? off dynamic base, any is just PTO through of experienced may, out your line play see – one has top resurgence on that employee any And last ManTech the that margins. peers expect Is of pointed

Judy Bjornaas

in I usage. more saw, normalization holidays. definitely We saw in QX, think QX We a and in around PTO a the reduction little Yes. QX

definitely the it people impact XXXX it – So I range, margin, had within But out. think figuring that margins our bit for and feel will of some little guidance a an revenue will but it revenue in on we’re more and have accounted impact we that, seeing that. on again, normalizes, like fully we

Matt Sharpe

Got Thanks. it.

Operator

you. Thank

Our the Perez of line of next Mora question America. Bank Mariana from comes of

Your question, please.

Mariana Perez Mora

Good everyone. afternoon,

Kevin Phillips

Good afternoon.

Mariana Perez Mora

you please XX% of from businesses, to strengths could company XXXX share? about are ManTech’s relative were taking or position advantages continue the So, market what new describe that awards

Kevin Phillips

it’s So, speak briefly. Kevin, yes, I’ll

technology we’re last investing areas. to In terms certain XX%, how about over business, around And getting been in new do we what and few continue that. fairly we consistent doing are years we’ve the that, of the

I those customers that and need. then the bringing think Matt to them, mentioned a and solutions mission number our of

XXXX... out it are that to DoD, are – and view we be and the in so the business because And to have to ahead operate the path. our literally relates a that provide customers to new as into in our in the need it of a to in, trying but in new and So we especially customers, will bring trying too them I far get environment solutions people – future invest

Matt Tait

Yes.

right. definitely on areas, of focused So we are kind main three

business development. is So, one just around

them. new that that, one is really kind are the of work. as type solutions. around bringing new the Kevin terms our well training sharpen talent on we or doing additional of talent, certifications second we but want And The intimated right, also the in, our are we of but are to for that competitive solutions edge giving and then really the we in

going we years. all together so the over to like win have been we that to the we’re continue have feel And last that rates several when that we combine enjoying

Mariana Perez Mora

you. this you one X.X% of next discuss to to could are then sales to CapEx main near Thank related year, CapEx And the mid-term? requirements Perfect. the please CapEx, down the what is with the going in

Judy Bjornaas

Yes.

So we – is couple from of the coming managed CapEx services main a contracts. our

a skiff So expansions year came lower of of we some those expect to facility were expecting did than XXXX. bit we secure are help contracts COVID this the then because to normalize we at in one delay – little to we support start refresh of on doing year the our related tech space kind customers. that for some And in

that, are primary do like see, down kind continues that slightly. of revenue I of revenue. of CapEx. stabilized drivers And think And of that So growth could could around the drift I the any kind X.X% as significant those we’ve barring changes,

Mariana Perez Mora

long-term saw my an is in one margins? expansion the terms and to And backlog should like think in in see What expect or Thanks. last XXXX you ‘XX. we is of in expansion what EBITDA another embedded today related looks your EBITDA to

Judy Bjornaas

more shift are we on kind It bids really of points basis XX as cost a year. we us deliver that now, are would more XX to of that see the allow plus margin about. talked that to XX% going We’ve if targeting in the solution depend have the see Matt And we Yes. per said to towards meaningful mix is those almost we a things contract from kind away expansion. shift

time, we deliver. we can of at one just kind point So think year we this on in what focus out

Mariana Perez Mora

Great. Thank you.

Judy Bjornaas

Thanks.

Operator

you. Thank

Credit Robert Our from Spingarn of question comes Suisse. next

line is Your open.

Robert Spingarn

who Matt, any I this know Kevin, so in of lot but talk we they that Hi, administration, a the I yet it yet or Judy, cyber seeing for, are has is don’t shift come on, new them? from through of about but and soon? terms priority too any know everybody. is a

Kevin Phillips

It’s too soon.

what affect will those see be, terms whether to or on change clearing to COVID. I deploy might the one sets. that a to think of conflicts U.S. technologies as are the our external they in of as nationally high borders, clearly to. well need those at this I they of that, focus I focusing administration conflict think futures from to outside we that think guidance approaches more technologies, whatever the responsive and threats be a is that the government changes strategies area That’s newer are because and applied of them from level, protect But priority. climate those the where it’s are less and of we areas beyond being technology that we’ll through the an focused on is customer there’s tracking Getting need because that within

Robert Spingarn

Okay.

mandates, a to particular speak? it’s so So you and there consistency. future need And anything not go like is the out do M&A or to to with realign

Kevin Phillips

issue opportunity talent market is is still it set We more headed. the it’s of than think where against a No. the

Robert Spingarn

from then trying to and have from your any And crowd with been Okay. lot seeing Beltway in that into the Are And seen interest customer they has the markets? any a Silicon perspective. of out you some that disintermediation Valley technology a having there to we talk are that? related get there, success government

Matt Tait

DIUx, get you how folks if in, at don’t think come Valley look definitely answer like that, the probably I but to through that contracting lot right? is overall space. also and within market a trying do you’ll federal they to have of mixed, You the Silicon know

a right, to make happen. and of will try lot come it go join to times, a they So partnership,

think get great is ways anything is and from versus are we seeing by solution Silicon the help mean, is are I a see Valley there’s innovation environment market think thing as aligns that competitive. or this government that’s asked folks while the that actually to which we with I So we for I definitely can them federal to perspective think being by our strategy, overall, the into where they trying – us a federal

Robert Spingarn

we Okay, of about when just move in through And ‘XX But the was cadence year, to how about I if for talked already should here. had being acquisitions? this was quarter don’t the growth as we covered already. quickly, the the sort you the okay. know think And organic year in I think cadence What the closer it you Judy, quarterly X%.

Judy Bjornaas

In it quarter, the was X%.

Robert Spingarn

Okay. cadence? And then just on that

Judy Bjornaas

Yes.

As we you it step-up think, throughout from QX moderate but guidance, of a give out XXXX. quarterly year don’t know, we the really is,

Robert Spingarn

Okay.

So sort normal of the trajectory?

Judy Bjornaas

Yes.

Robert Spingarn

you thank much. Okay, very

Matt Tait

boring I hoping I it of guess some more good. that. call

Robert Spingarn

you. Okay, thank

Operator

Instructions] question line [Operator of DiPalma comes the Blair. from of you. Thank Our Louie William next

is Your open. line

Louie DiPalma

good Matt, Judy and Kevin, Stephen, afternoon.

SolarWinds term, cyber government Given to for and on cyber may what how have impacts took breach And services cyber of security assess your high exposure specific can the contracts? longer ManTech cleanup security, it you has that demand of access remediation materially any the and of any or has impacted place?

Matt Tait

Sure.

SolarWinds they customers I talk declarations any terms from specific perspective, So of that customers there. what a their they I of right? public in the think been are serve impacted, we about own have can’t making

at I to to want dollars that. comment is, are figure this on what we happening specifically how or that think in to So of from out trying conversations do more – least But seeing don’t stop this, I again. are because

that additional already continue demand in. a focus this to and think keep is cyber we drive that the So perspective, that and do we from in places demand going on to are

elevate. overall cyber an from I’ll this we say, to, and increase to expect demand, So

Kevin Phillips

will nation think and a of all differently defense events I more do from I these maturity or national government to Kevin. to side. It’s more a one or mean add I how around that, also national see both other. the aggressively the from going that level, reacts the protecting policy we’re

as and does think do we I from and national broader policy strategy. a stay shift, we’ll that So tuned for that to all sector see will a what for our level,

Louie DiPalma

late a DCGS-A network you bit, gears order similar systems a involved switching Air Can programs you was was provide of $XXX of it there efforts announced like others? such software ground provide and And have modernization. engineering quick modernization in we overview like related like And Army’s the XX involvement Set tie-ins ManTech’s ManTech for the could is And prototypes. won ISR common with for Army recently, report a XXXX, overview and that the as little Army network and million to Capability I how wondering, ManTech with task system Force Thanks. a like and quick in to this the about of other like seen program. just a types provide project contracts that, distributed

Kevin Phillips

Yes.

program. is term one many technical we’ve as work and technology that focus short-hand combine focus that Navy, have – that of as engineering the for doing cyber. we’re Army, and So well we across And talked DX analytics with intelligent systems use examples areas the other that’s about like you we Air Force where

digital definitely where and mission, example is to as where that several have the alignment with specific talk here, Air detail is the good trying Not mission because our Army, So Force contracts, nation. – with bring on to of really that strategy Navy work call that on it’s think we we but work supports that one we’re in well. we in that contracts the doing type our

Louie DiPalma

thanks. Great,

Operator

you. Thank

Our Stifel. next the Joseph go line question comes DeNardi Please from ahead. of of

Joseph DeNardi

sorry, or to regard in Louie’s was maybe it just Kevin, – evening. question Good Thanks. Matt.

I near the converted into of that awards that’s the to and about guess, look about seeing, at how demand it from that say dollars opportunities kind that, not hasn’t Is going potential in that’s – in necessarily, yet or you hopefully look coming all in future? fair SolarWinds. increase Is it still talked come for – to You it?

Matt Tait

say fair, Joe. that’s Yes. I’d

say, now. these around sets I’ll across multiple right having, multiple definitely are customer topics conversations We

Joseph DeNardi

Could not you about would quantify able how investor? conducting or that, you which is to okay. you much are case. Okay, if talk positioned an cyber? a And about for if that the exercise Kevin, is or then to can benefit how go aligned actually you And maybe maybe were quantify for portfolio the question suspecting of willing from us with you I’m

Kevin Phillips

Well, broadly. more I’ll speak

automation, For alone if business analytics, business. and that, our at looking it’s for or is XX% today mission X years ago you ManTech, our that whereas maybe was IT just cyber OCO combine of providing ago, when technology years business more XX XX% of support,

where we what next very mentioned affected How But needs from standpoint business. that gets are in as against the growth capability depends good prioritize, few has a the think So of to much it that much procurement is from we a years. process a they standpoint, before. our for the our government do spot market we’re a concentration higher decide and on very

Joseph DeNardi

or what you just that you everyone Is there If Kevin, practically? Can also then, shortage you mentioned out wanted, dollars that of there there find And about the kind budget tomorrow, opportunities. is Okay. you talent a is talent. talk of of could that that lack right? not challenge, the more, because it’s means bill you essentially could are unspent

Kevin Phillips

yes. Yes and

for not we have we that towards for veterans well and we that with think price the capabilities processes certification bring of There and who talent have scale enough the just come pay get So what us and internal clearance for supporting we for upskilling national have, is degree both future that points as into company talent technology period. growth and resources the them, those we internal professionally as is, in. security want the to targeting because programs

to. You contractor government the new will you from from consistently talk hear that and every

Joseph DeNardi

what XX%? Can is X% you quantify the shortage Is it or it is?

Kevin Phillips

would In probably terms I say... of –

Matt Tait

here, a I be to wouldn’t guess honest. hazard

Kevin Phillips

agree I other but lot Yes, that, is of a things. with there

So...

Matt Tait

yes, But customers of budget-driven, – I a love think because also – have to that to also right. – it’s would lot this able do we be that is

theoretical up world, kind need a opening to would but we we So into other are max of factors. consider probably

Joseph DeNardi

what to And you months, comes if budget first, first? flip enough. Okay, Matt, just look page do few fair lastly, the do a in what you when out anything, at then hopefully,

Matt Tait

Yes.

mission the at and as make IT enterprise intelligence well we priorities as right, and is that us, data the that budget the system cyber, aligning about today, engineering, and For AI to we’ve want really analytics, edge. the to sure and talked automation

within are So to sure we look those look prioritized at those make the that budget. things things,

keeping to those We they make tabs sure are obviously things on that are.

we to we capability our those to alignment so And sets. of that good in see feel continue overall strategy terms

Joseph DeNardi

Okay, thank you.

Matt Tait

Joe. thanks, Yes,

Kevin Phillips

have further questions this time. Operator, at we it appears no that

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

Operator

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

You disconnect. all may

Mantech International (MANT) 18 Feb 212020 Q4 Earnings call transcript