FAIRFAX, Va.--(BUSINESS WIRE)--May 3, 2006--ManTech International
Corporation
- Revenue increase of 26.6%, to $275.3 million, in the first
quarter
- Organic revenue growth of 17.6% in the first quarter
- Operating margin of 8.3% (or 8.7% before FAS123R expense) in
the first quarter, up 25 basis points (or 65 basis points
before FAS123R expense) from the first quarter 2005
- Diluted EPS from continuing operations of $0.39 (or $0.41
before FAS123R expense) in the first quarter
- Contract awards of $290 million in the first quarter
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; the Space Community; and other federal government customers,
today announced results for the first quarter of 2006.
ManTech reported revenue of $275.3 million for the first quarter
of 2006, up $57.8 million, or 26.6%, compared to $217.5 million for
the same period in 2005. This represents 17.6% organic revenue growth
for the first quarter based on pro forma revenue for the first quarter
2005, which reflects the Gray Hawk acquisition and the METI
divestiture. The growth was primarily a result of the solid execution
of the business strategy to focus on the high-end defense and
intelligence markets in support of national security.
Operating income in the first quarter was $22.7 million (8.3% of
revenue), up $5.2 million, or 29.7%, compared to $17.5 million for the
same period in 2005. Net income from continuing operations in the
first quarter was $13.3 million, up 3.9%, compared to $12.8 million in
the same period in 2005. Diluted earnings per share from continuing
operations was $0.39 for the first quarter versus $0.39 for the same
period last year (which included a $0.07 one time gain on the sale of
METI).
Excluding the effect of FAS 123R, ManTech's operating income in
the first quarter 2006 was $24.0 million (8.7% of revenue), up $6.5
million, or 37.1%, compared to $17.5 million for the same period in
2005. Excluding the effect of FAS 123R and a $2.3 million one time
after tax gain from the sale of METI, net income from continuing
operations in the first quarter was $14.0 million, up 33.3%, compared
to $10.5 million in the same period in 2005. Diluted EPS from
continuing operations prior to the effect of FAS123R was $0.41 for the
first quarter versus $0.39 for the same period last year (which
included a $0.07 one time gain on the sale of METI).
Comparative Earnings Per Share Table
Q1 2006 Q1 2005 Growth Rate
----------------------------------------------------------------------
Diluted Earnings Per Share from
Continuing Operations $0.39 $0.39
----------------------------------------------------------------------
One-time Gain on Disposal of an
Operation (1) ----- ($0.07)
----------------------------------------------------------------------
Effect of FAS 123R on diluted EPS (2) $0.02 -----
----------------------------------------------------------------------
Pro Forma Adjusted Diluted Earnings Per
Share from Continuing Operations,
exclusive of the effect of FAS 123R
expense $0.41 $0.32 28.1%
----------------------------------------------------------------------
(1) One-time gain is derived from $3.9 million gain on disposal of an
operation less 40% effective tax rate and divided by diluted
weighted average common shares outstanding.
(2) A reconciliation of GAAP results with results excluding the effect
of FAS 123R is provided at the end of the press release.
On January 1, 2006, the Company adopted Financial Accounting
Standards Board Statement No. 123R, which requires the Company to
recognize share-based payment transactions as a compensation expense
in its financial statements. Because our first quarter 2005 financial
results do not include the effect of FAS 123R, the Company believes
that providing our first quarter 2006 financial results excluding the
effect of FAS 123R provides a better comparison with prior results. A
reconciliation of GAAP results with results excluding the effect of
FAS 123R is provided at the end of this press release.
"In the first quarter of 2006, we continued our solid business
execution of the Strategic Plan developed prior to the IPO," said
George J. Pedersen, Chairman of the Board and CEO of ManTech
International Corporation. "We believe we will continue to see high
demand for our technology, our service and engineering capabilities as
well as our software solutions across the entire national security
customer base. These demands are being generated by the increasing
requirements across our customer base as well as the unique requests
being generated by the war on terrorism here and around the world. Our
global presence in over 40 countries positions us to meet these
demands."
New Business Wins
ManTech had $290 million in new contract awards for the quarter,
including a $114 million 2-year contract to provide CREW support to
the U.S. Army in southwest Asia. Many of the Company's awards were
with classified customers that were not announced publicly.
"We continued our bookings momentum in the first quarter after two
successive quarters of record awards in the third and fourth quarters
of 2005. Over the last three quarters we have had a book-to-bill ratio
of approximately two times revenue and our proposal activity also
increased in the quarter which positions us to continue our growth
trajectory through 2006 and into 2007," said Robert A. Coleman,
President and Chief Operating Officer, ManTech International
Corporation.
Key Performance Metrics
Reported backlog as of March 31, 2006 was $2.24 billion and funded
backlog was $519 million. Revenue from the Department of Defense, the
Intelligence Community and Homeland Security related customers
accounted for 95.3% of revenue for the first quarter of 2006. ManTech
derived 74.9% of its revenue during the first quarter of 2006 from
prime contracts. ManTech's time and materials contracts accounted for
64.3% of revenue, fixed-price contracts accounted for 9.9% of revenue
and cost-plus contracts accounted for 25.8% of revenue.
Company Guidance
ManTech's guidance for the second quarter and full year 2006
reflects the continuation of strong underlying trends in its national
security business. ManTech's guidance does not include any
discontinued operations, future acquisitions or divestitures. The cost
of stock options represents non-cash expenses that by themselves do
not affect operating cash flows.
(Dollars in millions, except earnings per share amounts)
2nd Quarter 2006 Full Year 2006
----------------------------------------------------------------------
Revenue $285 - $290 $1,150 - $1,180
----------------------------------------------------------------------
Diluted Earnings Per Share from
Continuing Operations, exclusive of
effect of FAS 123R expense $0.42 - $0.44 $1.72 - $1.80
----------------------------------------------------------------------
Effect of FAS 123R on diluted EPS ($0.03) ($0.10)
----------------------------------------------------------------------
Diluted Earnings Per Share from
Continuing Operations $0.39 - $0.41 $1.62 - $1.70
----------------------------------------------------------------------
Weighted Average Shares Outstanding 33.8 million 34.0 million
----------------------------------------------------------------------
Conference Call:
ManTech executive management will hold a conference call today at
5 p.m. EST, to discuss first quarter 2006 results and answer
questions. Interested parties may access the call by dialing (800)
811-7286 (domestic) or (913) 981-4902 (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 17. To access the
replay, call (888) 203-1112 (domestic) or (719) 457-0820
(international). The confirmation code for the replay is 8222499. 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; the Departments of Defense, State, Homeland
Security, Justice; the Space Community and other U.S. federal
government customers. ManTech's expertise includes systems
engineering, systems integration, technology and 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. Marshals Service
deploy a common, office automation system. With over 6,000 highly
qualified employees, the company operates in the United States and
over 40 countries worldwide. In 2005, Red Herring magazine selected
ManTech as one of its Small Cap 100 Companies. 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; uncertainties
specifically related to discontinued operations, including our ability
to sell or dispose of our MSM operations on terms that are favorable
to us, or at all; failure to retain existing U.S. government
contracts, win new contracts, or win recompetes; adverse results of
U.S. government audits of our government contracts; risk of contract
performance or termination; adverse changes in our mix of contract
types; failure to obtain option awards, task orders or funding under
contracts; 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; risks
associated with complex U.S. government procurement laws and
regulations; and competition. These and other risk factors are more
fully discussed in the section entitled "Risks Factors " in ManTech's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 10, 2006, 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 BALANCE SHEETS
(Dollars in Thousands)
March 31,
2006 Dec. 31,
(unaudited) 2005
----------- ---------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,788 $ 5,662
Receivables--net 264,351 239,676
Prepaid expenses and other 8,470 7,393
Assets held for sale 5,838 4,831
--------- ---------
Total current assets 283,447 257,562
Property and equipment--net 12,398 11,713
Goodwill 227,747 227,747
Other intangibles--net 34,390 35,602
Employee supplemental savings plan assets 12,740 11,902
Other assets 11,146 11,459
--------- ---------
TOTAL ASSETS $581,868 $555,985
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of debt $ 51,985 $ 42,502
Accounts payable and accrued expenses 60,425 57,933
Accrued salaries and related expenses 36,766 41,428
Deferred income taxes--current 172 663
Billings in excess of revenue earned 6,875 6,611
Liabilities held for sale 5,343 4,978
--------- ---------
Total current liabilities 161,566 154,115
Debt--net of current portion - 21
Accrued retirement 13,919 13,054
Other long-term liabilities 3,912 3,282
Deferred income taxes--non-current 6,853 6,920
--------- ---------
TOTAL LIABILITIES 186,250 177,392
--------- ---------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Common stock, Class A--$0.01 par value;
150,000,000 shares authorized; 18,162,161
and 18,016,328 shares issued and outstanding
at March 31, 2006 and December 31, 2005,
respectively. 182 180
Common stock, Class B--$0.01 par value;
50,000,000 shares authorized; 15,064,593 and
15,065,293 shares issued and outstanding at
March 31, 2006 and December 31, 2005,
respectively. 151 151
Additional paid in capital 238,242 233,360
Retained earnings 157,038 144,903
Accumulated other comprehensive income 5 (1)
Deferred compensation 640 640
Shares held in grantor trust (640) (640)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 395,618 378,593
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $581,868 $555,985
========= =========
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
(unaudited)
Three months ended March 31,
----------------------------
2006 2005
------------ ------------
REVENUES $ 275,306 $ 217,461
COST OF SERVICES 227,807 179,208
------------ ------------
GROSS PROFIT 47,499 38,253
------------ ------------
COSTS AND EXPENSES:
General and administrative 22,761 19,307
Depreciation and amortization 2,005 1,439
------------ ------------
Total costs and expenses 24,766 20,746
------------ ------------
INCOME FROM CONTINUING OPERATIONS 22,733 17,507
Interest expense, net 792 281
Equity in earnings of affiliates - 166
Gain on disposal of an operation - 3,879
Other income (expense), net (79) 110
------------ ------------
INCOME BEFORE PROVISION FOR INCOME TAXES
AND MINORITY INTEREST 21,862 21,381
Provision for income taxes (8,592) (8,550)
Minority interest - (2)
------------ ------------
INCOME FROM CONTINUING OPERATIONS--net of
taxes 13,270 12,829
(Loss) from discontinued operations--net
of taxes (1,135) (904)
------------ ------------
NET INCOME $ 12,135 $ 11,925
============ ============
BASIC EARNINGS (LOSS) PER SHARE:
Income from continuing operations--net of
taxes $ 0.40 $ 0.40
(Loss) from discontinued operations--net
of taxes $ (0.03) $ (0.03)
------------ ------------
Basic earnings per share $ 0.37 $ 0.37
============ ============
Weighted average common shares outstanding 33,118,345 32,525,718
============ ============
DILUTED EARNINGS (LOSS) PER SHARE:
Income from continuing operations--net of
taxes $ 0.39 $ 0.39
(Loss) from discontinued operations--net
of taxes $ (0.03) $ (0.03)
------------ ------------
Diluted earnings per share $ 0.36 $ 0.36
============ ============
Weighted average common shares outstanding 33,528,397 32,845,727
============ ============
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(unaudited)
Three months ended
March 31,
------------------
2006 2005
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,135 $11,925
Adjustments to reconcile net income to net cash used
in operating activities:
Equity in earnings of affiliates - (166)
(Decrease) increase in deferred income taxes (558) 3,329
Stock-based compensation 1,240 7
Tax benefit from the exercise of stock options
for 2005 - 942
Depreciation and amortization 2,321 1,839
Gain on disposal of an operation - (3,879)
Loss from discontinued operations 1,135 904
Changes in assets and liabilities-net of effects
from acquired, disposed, and discontinued
businesses:
Contract receivables (24,675) (398)
Prepaid expenses and other (1,077) (1,240)
Accounts payable and accrued expenses 2,492 8,071
Accrued salaries and related expenses (4,662) (3,251)
Billings in excess of revenue earned 264 (284)
Accrued retirement 865 (1,926)
Other 408 1,517
--------- --------
Net cash flows from continuing operations (10,112) 17,390
Net cash flows from discontinued operations (1,777) 16,131
--------- --------
Net cash flows from operating activities (11,889) 33,521
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,433) (1,050)
Investment in capitalized software for internal
use (370) (112)
Proceeds from disposal of an operation - 7,000
--------- --------
Net investing cash flows from continuing operations (1,803) 5,838
Net investing cash flows from discontinued
operations - (69)
--------- --------
Net cash flows from investing activities (1,803) 5,769
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 2,416 2,426
Tax benefit from the exercise of stock options
for 2006 940 -
Repayment of debt (38) (20)
Net increase in borrowings under line of credit 9,500 -
--------- --------
Net cash flows from financing activities 12,818 2,406
--------- --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (874) 41,696
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,662 22,946
--------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,788 $64,642
========= ========
ManTech International
Pro Forma Consolidated Statement of Operations
For the three months ended March 31, 2006
(Dollars in Thousands Except Per Share Date)
The Company has presented net income, as adjusted, to reflect the
impact that the adoption of FAS 123(R) had on the Company's earnings
per share. Management believes that these non- GAAP financial measures
provide investors useful information as they facilitate the comparison
of current performance to prior performance. These non-GAAP financial
measures should not be considered in isolation or as a substitute for
performance measures prepared in accordance with GAAP.
(unaudited)
Three months ended March 31, 2006
-----------------------------------
As Reported Adjustments Pro Forma
----------- ----------- -----------
REVENUES $275,306 $275,306
COST OF SALES 227,807 227,807
----------- ----------- -----------
GROSS PROFIT 47,499 47,499
----------- ----------- -----------
General and administrative 22,761 $(1,240) 21,521 (1)
Depreciation and
amortization 2,005 2,005
----------- ----------- -----------
Total costs and expenses 24,766 (1,240) 23,526
----------- ----------- -----------
INCOME FROM CONTINUING
OPERATIONS 22,733 1,240 23,973
Interest expense, net 792 792
Other income (expense), net (79) (79)
----------- ----------- -----------
INCOME BEFORE PROVISION FOR
INCOME
TAXES AND MINORITY INTEREST 21,862 1,240 23,102
Provision for income taxes (8,592) (487) (9,079)(2)
----------- ----------- -----------
INCOME FROM CONTINUING
OPERATIONS-net of taxes 13,270 753 14,023
(Loss) from discontinued
operations-net of taxes (1,135) (1,135)
----------- ----------- -----------
NET INCOME $12,135 $753 $12,888
=========== =========== ===========
BASIC EARNINGS (LOSS) PER
SHARE:
Income from continuing
operations-net of taxes $0.40 $0.02 $0.42
(Loss) from discontinued
operations-net of taxes $(0.03) $(0.03)
----------- ----------- -----------
Basic earnings per share $0.37 $0.02 $0.39
=========== =========== ===========
DILUTED EARNINGS (LOSS) PER
SHARE:
Income from continuing
operations-net of taxes $0.39 $0.02 $0.41
(Loss) from discontinued
operations-net of taxes $(0.03) $(0.03)
----------- ----------- -----------
Diluted earnings per share $0.36 $0.02 $0.38
=========== =========== ===========
Weighted average common shares:
-Basic 33,118,345 33,118,345
-Diluted 33,528,397 259,624 33,788,021
(1) Adjusted to eliminate the FAS 123R stock compensation expense
resulting from the adoption of FAS 123R on January 1, 2006
(2) Adjusted to eliminate the tax effect of the adjustment in Note 1
at an effective tax rate of 39.3%
CONTACT: ManTech International Corporation
Joseph Cormier, 703-218-8258
joe.cormier@mantech.com
or
Mark Root, 703-218-8397; cell: 703-407-9393
mark.root@mantech.com
SOURCE: ManTech International Corporation
