FAIRFAX, Va.--(BUSINESS WIRE)--May 4, 2005--ManTech International
Corporation (Nasdaq:MANT):
- Strong cash generation leading to first quarter ending cash
balance of $65 million
- First quarter revenues increased 15 percent to $217.5 million
- Organic growth of 14 percent in first quarter revenues
- Contract wins for the first quarter of $333 million
- Announces purchase of Gray Hawk Systems, Inc. for $100 million
in cash -immediately accretive to EPS
ManTech International Corporation (Nasdaq:MANT), a leading
provider of innovative technologies and solutions focused on
mission-critical national security programs for the Intelligence
Community and the Departments of Defense, State, Homeland Security,
Justice and other federal government customers, today announced
results for the first quarter of 2005.
ManTech reported revenue of $217.5 million for the first quarter
of 2005, up $27.9 million, or 15 percent, compared to $189.6 million
for the same period in 2004. The results reflect an organic growth
rate of 14 percent from the comparable period in 2004 due to increased
spending for national and homeland security.
ManTech's operating income in the first quarter 2005 was $17.5
million, an 8.1 percent operating margin. Diluted EPS from continuing
operations was $0.39 for the first quarter versus $0.33 for the same
period last year. Fully diluted EPS, including the loss from
discontinued operations of $904 thousand after tax, were $0.36 for the
first quarter of 2005, up from $0.35 in the same quarter of 2004. In
accordance with GAAP, prior period results have been reclassified to
uniformly reflect the results from continuing operations in
comparative periods.
"We are pleased with the overall performance of this quarter as we
continue to expand our business across a broader base of contracts and
customers. Notably, our cash position and our contract wins for the
first quarter were very strong at a level of $65 million and $333
million, respectively," said George J. Pedersen, ManTech International
Chairman of the Board and CEO. "With our steadfast and sharpened focus
on the high-end Intelligence and Defense markets, as evidenced by our
announced acquisition of Gray Hawk Systems and the planned disposition
of ManTech MSM Security Services, Inc., we are looking forward to
continued success for the remainder of 2005 and beyond."
Key Performance Metrics
Reported total backlog as of March 31, 2005, was $1.7 billion and
funded backlog was $390 million. Revenue from the Department of
Defense and the Intelligence Community accounted for over 94 percent
of revenue for the first quarter of 2005. ManTech derived 83 percent
of its revenue during the first quarter of 2005 from prime contracts
and 36 percent of its revenue from work under GSA schedule contracts,
as ManTech proactively migrated work from GSA to other broad agency
and agency specific contract vehicles. ManTech's time and materials
contracts accounted for 59 percent of revenue, fixed-price contracts
accounted for 9 percent of revenue and cost-plus contracts accounted
for 32 percent of revenue.
Business Highlights
"Our contract awards this past quarter from the Department of
Defense and Intelligence Community are a testament to our continued
strong performance for these customers," said Robert A. Coleman,
President and Chief Operating Officer, ManTech International
Corporation. "Looking ahead, we plan to continue to leverage the
corporate capabilities of ManTech to expand our business in the
Intelligence Community and related national security markets, become a
critical provider of high-end technology services to the government
and continue to meet the government's expanding worldwide mission
requirements."
Gray Hawk Acquisition
In a separate press release, ManTech also announced that it has
signed a definitive agreement to acquire Gray Hawk Systems, Inc. a
profitable, fast-growing, diversified, high technology company
providing a broad range of intelligence related services to the
homeland security, law enforcement, Intelligence Community and the
Department of Defense markets. ManTech will acquire all of the
outstanding shares of Gray Hawk Systems for $100 million in cash.
Financing for the acquisition, which is expected to be immediately
accretive to ManTech's EPS, will consist of available cash and
borrowings under ManTech's senior credit facility. Headquartered in
Alexandria, VA and founded in 1995, Gray Hawk Systems is a privately
held company that had 2004 revenues of approximately $70 million and
estimates 2005 revenues will be approximately $90 million. More than
90 percent of the company's 500 employees are cleared, with 70 percent
at higher level clearances.
Company Guidance
ManTech's guidance for the second quarter and full year 2005
reflects the continuation of very strong underlying trends in its
national security business, the acquisition of Gray Hawk Systems, and
the recent change in the timing for implementation of FAS 123R option
expensing to 2006. The guidance does not include any future
acquisitions or divestitures.
2nd Quarter 2005 Full Year 2005
----------------------------------------------------------------------
Revenue $240 million - $245 million $980 million - $1.005 billion
----------------------------------------------------------------------
Diluted
Earnings
Per Share $0.33 - $0.35 $1.48 - $1.58
----------------------------------------------------------------------
Conference Call:
ManTech executive management will hold a conference call today at
5 p.m. EDT, to discuss first quarter 2005 and full year 2005 results
and answer questions. Interested parties may access the call by
dialing (800) 819-9193 (domestic) or (913) 981-4911 (international).
The conference call will be Webcast (listen only) simultaneously via
the Internet at www.mantech.com. Interested parties should dial in or
log on approximately ten minutes prior to the start of the call.
A replay of the call will be available beginning at 9 p.m. today
and will remain available through midnight, May 4. To access the
replay, call (888) 203-1112 (domestic) or (719) 457-0820
(international). The confirmation code for the replay is 9359641. A
replay will also be available on ManTech's Website approximately two
hours after the conclusion of the call.
About ManTech International Corporation:
Headquartered in Fairfax, Virginia, ManTech International
Corporation is a leading provider of innovative technologies and
solutions for mission-critical national security programs for the
Intelligence Community and the Departments of Defense, State, Homeland
Security, Justice and other U.S. federal government customers. The
company's expertise includes systems engineering, systems integration,
software development, enterprise security architecture, information
assurance, intelligence operations support, network and critical
infrastructure protection, information technology, communications
integration and engineering support. The company supports the advanced
telecommunications systems that are used in Operation Iraqi Freedom
and in other parts of the world; provides the physical and cyber
security to protect U.S. embassies all over the world; has developed a
secure, collaborative communications system for the U.S. Department of
Homeland Security; and is helping the Department of Justice's U.S.
Marshal Service deploy a common, office automation system. With 2004
annual revenues of $842 million and approximately 5,500 highly
qualified employees, the company operates in the United States and 40
countries worldwide. In 2004, ManTech was selected by Business Week
magazine as one of the Top 100 Hot Growth Companies and was ranked by
VARBusiness magazine as one of its Top 50 Fastest-Growing Solution
Providers. Additional information on ManTech can be found at
www.mantech.com.
Forward-Looking Information:
Statements and assumptions made in this press release, which do
not address historical facts, constitute "forward-looking" statements
that ManTech believes to be within the definition in the Private
Securities Litigation Reform Act of 1995 and involve risks and
uncertainties, many of which are outside of our control. Words such as
"may," "will," "intends," "should," "expects," "plans," "projects,"
"anticipates," "believes," "estimates," "predicts," "potential,"
"continue," or "opportunity," or the negative of these terms or words
of similar import are intended to identify forward-looking statements.
These forward-looking statements are subject to known and unknown
risks and uncertainties, which could cause actual results to differ
materially from those anticipated, including, without limitation:
adverse changes in U.S. government spending priorities; failure to
retain existing U.S. government contracts or win new contracts;
failure to obtain option awards, task orders or funding under
contracts; risk of contract performance or termination; failure to
successfully integrate recently acquired companies or businesses into
our operations or to realize any accretive or synergistic effects from
such acquisitions; adverse results of U.S. government audits of our
government contracts; uncertainties specifically related to
discontinued operations; risks associated with complex U.S. government
procurement laws and regulations; 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 additional costs associated with complying with new
laws and regulations relating to corporate governance issues. These
and other risk factors are more fully discussed in the section
entitled "Risks Related to the Company's Business" in ManTech's Annual
Report on Form 10-K filed with the Securities and Exchange Commission
on March 16, 2005, and, from time to time, in ManTech's other filings
with the Securities and Exchange Commission, including among others,
its reports on Form 8-K and Form 10-Q.
The forward-looking statements included in this news release are
only made as of the date of this news release and ManTech undertakes
no obligation to publicly update any of the forward-looking statements
made herein, whether as a result of new information, subsequent events
or circumstances, changes in expectations or otherwise.
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
(unaudited)
Three months ended
March 31,
-------------------------
2005 2004
------------ ------------
REVENUES $ 217,461 $ 189,628
COST OF SERVICES 179,208 153,563
------------ ------------
GROSS PROFIT 38,253 36,065
------------ ------------
COSTS AND EXPENSES:
General and administrative 19,307 16,877
Depreciation and amortization 1,439 1,241
------------ ------------
Total costs and expenses 20,746 18,118
------------ ------------
INCOME FROM CONTINUING OPERATIONS 17,507 17,947
Interest (expense), net (281) (446)
Equity in earnings (losses) of affiliates 166 115
Gain on disposal of an operation 3,879 -
Other income (expense), net 110 186
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES AND
MINORITY INTEREST 21,381 17,802
Provision for income taxes (8,550) (7,243)
Minority interest (2) (1)
------------ ------------
INCOME FROM CONTINUING OPERATIONS 12,829 10,558
(Loss) Income from discontinued operations--
net of taxes (904) 782
------------ ------------
NET INCOME $ 11,925 $ 11,340
============ ============
BASIC EARNINGS (LOSS) PER SHARE:
Income from continuing operations $ 0.40 $ 0.33
(Loss) Income from discontinued operations--
net of taxes (0.03) 0.02
------------ ------------
Basic earnings per share $ 0.37 $ 0.35
============ ============
Weighted average common shares outstanding 32,525,718 32,129,949
============ ============
DILUTED EARNINGS (LOSS) PER SHARE:
Income from continuing operations $ 0.39 $ 0.33
(Loss) Income from discontinued operations--
net of taxes (0.03) 0.02
------------ ------------
Diluted earnings per share $ 0.36 $ 0.35
============ ============
Weighted average common shares outstanding 32,845,727 32,358,250
============ ============
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(unaudited)
March 31, December 31,
2005 2004
--------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 64,642 $ 22,946
Receivables--net 194,238 196,086
Prepaid expenses and other 10,596 9,413
Assets held for sale 7,956 24,726
--------- ---------
Total current assets 277,432 253,171
Property and equipment--net 8,745 8,505
Goodwill 152,359 153,374
Other intangibles--net 22,983 23,997
Investments 3,008 6,011
Employee supplemental savings plan assets 10,203 12,208
Other assets 10,429 10,316
--------- ---------
TOTAL ASSETS $485,159 $467,582
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of debt $ 25,081 $ 25,080
Accounts payable and accrued expenses 61,666 52,668
Accrued salaries and related expenses 31,063 35,004
Deferred income taxes--current 7,480 5,937
Billings in excess of revenue earned 4,935 5,252
Liabilities held for sale 3,227 3,031
--------- ---------
Total current liabilities 133,452 126,972
Debt--net of current portion 83 104
Accrued retirement 11,509 13,435
Other long-term liabilities 2,501 5,711
Deferred income taxes 2,567 781
Minority interest 59 56
--------- ---------
TOTAL LIABILITIES 150,171 147,059
--------- ---------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Common stock, Class A--$0.01 par
value; 150,000,000 shares authorized;
17,564,286 and 17,418,950 shares
issued and outstanding at March 31,
2005 and December 31, 2004,
respectively. 176 174
Common stock, Class B--$0.01 par
value; 50,000,000 shares authorized;
15,065,293 and 15,065,293 shares
issued and outstanding at March 31,
2005 and December 31, 2004,
respectively. 151 151
Additional paid in capital 222,095 219,664
Retained earnings 112,635 100,710
Accumulated other comprehensive income (loss) 312 205
Unearned ESOP Shares (381) (381)
Deferred compensation 640 640
Shares held in grantor trust (640) (640)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 334,988 320,523
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $485,159 $467,582
========= =========
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(unaudited)
Three months ended
March 31,
-----------------
2005 2004
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $11,925 $11,340
Adjustments to reconcile net income to net cash used
in operating activities:
Equity in (earnings) losses of affiliates (166) (115)
(Decrease) increase in current and deferred income
taxes 3,329 3,664
Depreciation and amortization 1,839 1,612
Gain on disposal of an operation (3,879) -
Loss (Gain) from discontinued operations 904 (782)
Changes in assets and liabilities-net of effects from
acquired, disposed, and discontinued businesses:
Contract receivables (398) 879
Prepaid expenses and other (1,240) (1,278)
Accounts payable and accrued expenses 9,013 (5,391)
Accrued salaries and related expenses (3,251) (4,320)
Billings in excess of revenue earned (284) 1,180
Accrued retirement (1,926) 919
Other 1,524 (65)
-------- --------
Net cash flow from continuing operations 17,390 7,643
Net cash flows from discontinued operations 16,062 (5,810)
-------- --------
Net cash flows from operating activities 33,452 1,833
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,050) (410)
Investment in capitalized software for internal
use (112) (180)
Proceeds from sales of property and equipment - 1
Investment in capitalized software products - (111)
Acquisition of businesses, net of cash acquired - (6,509)
Proceeds from disposal of an operation 7,000 -
-------- --------
Net cash flows from investing activities 5,838 (7,209)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 2,426 256
Repayment of Notes Payable (20) -
Net Increase in borrowings under lines of credit - 501
-------- --------
Net cash flows from financing activities 2,406 757
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 41,696 (4,619)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 22,946 9,166
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $64,642 $ 4,547
======== ========
CONTACT:
ManTech International Corporation
Mark Root
703-218-8397
cell: 703-407-9393
mark.root@mantech.com
or
Maureen Crystal
703-218-8262
maureen.crystal@mantech.com
SOURCE: ManTech International Corporation
