ManTech Announces Financial Results for Second Quarter of Fiscal Year 2010

Thursday, Jul 29, 2010

ManTech International Corporation (NASDAQ: MANT), a leading provider of innovative technologies and solutions for mission-critical national security programs, today announced financial results for the second quarter of fiscal year 2010, which ended June 30, 2010.

“In the second quarter of fiscal year 2010, we delivered strong revenue growth, margin expansion and cash collection”

“In the second quarter of fiscal year 2010, we delivered strong revenue growth, margin expansion and cash collection,” said ManTech Chairman and Chief Executive Officer George J. Pedersen. “Despite the pressures on federal government spending, we see continued strong performance based on our positioning on mission-critical programs in national and homeland defense, both in the United States and around the world. I am also proud that we maintained our commitment to program execution, as evidenced by our being awarded the NASA Goddard Space Flight Center Contractor Excellence Award for the third time since 2000.”

Summary Operating Results

Revenues for the quarter were $661.6 million, up 29 percent from $514.1 million in the second quarter of fiscal year 2009. Organic growth was 13 percent for the quarter, driven primarily by recent awards for intelligence, surveillance and reconnaissance (ISR); systems engineering; and test and evaluation programs and expanded requirements on existing cyber security and logistics contracts. Organic growth is calculated as reported revenue for the current quarter divided by revenue for the prior year quarter adjusted as if Sensor Technologies Inc. (STI) had been acquired one year earlier.

Operating income for the quarter was $56.5 million (8.5 percent of revenue), up 26 percent from $44.9 million (8.8 percent of revenue) in the second quarter of fiscal year 2009. Operating margin percentage increased 80 basis points sequentially as a result of strong program performance, direct actions taken to improve profitability and lower share-based compensation expense.

Net income for the quarter was $32.2 million, up 13 percent from $28.5 million in the second quarter of fiscal year 2009. Net income was impacted slightly by increases in net interest expense and the effective tax rate. Interest expense increased as a result of the deliberate decision to issue $200 million of senior notes in April to add financial flexibility to fund potential corporate investments and acquisitions. The effective tax rate for the quarter was a more normative 39.0 percent compared to the unusually favorable 36.1 percent in the second quarter of fiscal year 2009, which benefited from fluctuations in deferred compensation assets and a gain related to state income taxes.

Diluted earnings per share for the quarter were $0.88, up 10 percent from $0.80 in the second quarter of fiscal year 2009, driven by the increase in net income offset by a slightly higher share count compared to the prior year quarter.

Cash Management and Capital Deployment

Cash flow from operations for the quarter was $70.0 million (or 2.2 times net income). Days sales outstanding (DSO) were 63 days, compared to 75 days in the first quarter of fiscal year 2010 and 66 days in the second quarter of fiscal year 2009. As of June 30, 2010, the company had $162 million in cash and cash equivalents and $200 million in debt with no balance on its $350 million revolving-credit facility.

Contract Awards

Contract awards (bookings) totaled $644 million in the second quarter, representing a book-to-bill ratio of 1.0. The bookings total excludes awards in the quarter with an active protest as well as multiple-award contracts where ManTech has no history of performance. Large, single-award contracts received during the quarter include:

• Systems Engineering and Integration Services to U.S. Air Force Launch and Range Systems Wing (LRSW). ManTech was awarded a 10-year, $160 million prime contract to support current and future space-launch operations for the U.S. Air Force LRSW. Technical support provided under this take-away contract includes systems engineering and integration, mission integration management, systems safety engineering, systems environmental engineering, systems security and information assurance, product assurance, launch schedule management and launch risk management.
• Engineering and Technical Support to Naval Surface Warfare Center (NSWC). ManTech received five-year, $40 million contract to support the NSWC Indian Head Division. Under the single award, indefinite-delivery, indefinite-quantity contract, ManTech will provide a broad range of services, including engineering, technical, system safety, human system integration, training and program management support.
• Naval Undersea Warfare Center (NUWC) Acoustic Test Support. Under afive-year, $20 million contract, ManTech will provide engineering, programmatic and technical support services for NUWC acoustic test support programs. Key areas of focus include acoustic trial preparation and direction, shipboard localization of noise sources, post-trial data reduction and analysis, fleet data submittal analysis and report production.

In addition to these competitive awards, ManTech received several significant extensions to logistics and test and evaluation contracts, as well as to key classified systems engineering and cyber efforts.

The company’s backlog of business at the end of quarter was $4.5 billion, of which $1.4 billion was funded. Compared to the second quarter of fiscal year 2009, total backlog increased 15 percent and funded backlog increased 40 percent, due in part to the robust backlog brought by the STI acquisition.

Source: Business Wire