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 first quarter of fiscal year 2019, which
ended March 31, 2019.
"ManTech's steady operational execution resulted
in continued organic revenue growth, improved profitability and
excellent cash flow generation in the quarter. The market
environment remains healthy with a robust opportunity set that
aligns well with ManTech's differentiated capabilities. I am
pleased with our solid start to 2019 and look forward to the
continued success of the business," said ManTech President and
Chief Executive Officer, Kevin M. Phillips.
Summary Operating Results
| |
Three months ended March 31, |
| (In Millions Except Per
Share Amounts) |
2019 |
|
2018 |
| Revenue |
$501.9 |
|
$473.2 |
| Operating Income |
$28.5 |
|
$26.4 |
| Operating Margin |
5.7% |
|
5.6% |
| Depreciation and
Amortization |
$12.6 |
|
$13.2 |
| Depreciation and
Amortization % of Revenue |
2.5% |
|
2.8% |
| Net Income |
$21.1 |
|
$20.1 |
| Diluted Weighted
Average Common Shares Outstanding |
40.0 |
|
39.7 |
| Diluted Earnings Per
Share |
$0.53 |
|
$0.51 |
As a result of increased demand for our services
and solutions, revenues for the quarter were $501.9 million, up 6%
from $473.2 million in the first quarter of 2018. Revenue growth
was driven by organic expansion from recent contract awards.
Operating income for the quarter was $28.5
million, up 8% compared to the first quarter of 2018, representing
an operating margin of 5.7%. For the quarter, net income was $21.1
million and diluted earnings per share were $0.53, up 5% and 4%,
respectively, compared to the first quarter of 2018.
Cash Management and Capital Deployment
| |
Three months ended March 31, |
| (Dollars In
Millions) |
2019 |
|
2018 |
| Net Income |
$21.1 |
|
$20.1 |
| Cash Flow from (Used
in) Operations |
$47.3 |
|
$(18.0) |
| Operating Cash Flow
Multiple of Net Income |
2.2x |
|
(0.9)x |
| Capital
Expenditures |
$8.3 |
|
$8.7 |
| Days Sales Outstanding
(DSO) |
70 |
|
69 |
| Cash and Cash
Equivalents, End of Period |
$120.5 |
|
$10.4 |
| Current and Long Term
Debt, End of Period |
$96.0 |
|
$65.5 |
Cash flow from operations for the quarter was
$47.3 million or 2.2 times net income. Days sales outstanding (DSO)
were 70 days, an increase of 1 day compared to the first quarter of
2018. As of March 31, 2019, the Company had $120.5 million in
cash and cash equivalents and $96.0 million of outstanding
borrowings on its $500 million revolving-credit facility, which
provides the Company with ample financial capacity to support
organic growth, pursue acquisitions and issue dividends while
maintaining a strong balance sheet.
In the first quarter, the Company paid $10.7
million in dividends, or $0.27 per share, to its common
stockholders of record as of March 8, 2019. The Board of
Directors has declared that the Company will pay a cash dividend of
$0.27 per share on June 21, 2019, to all common stockholders
of record as of June 7, 2019, as part of its regular quarterly
cash dividend program. Future declarations of dividends and their
record and payment dates are subject to the final determination of
ManTech's Board of Directors.
Contract Awards
Contract awards (bookings) totaled $556 million
in the quarter, representing a book-to-bill ratio of 1.1. In the
first quarter approximately 30% of the awards were for new
business. Over the trailing 12 months, the book-to-bill ratio is
1.8. ManTech's notable single-award contract in the quarter
includes:
- Systems Engineering and Consulting Support for the
Department of Homeland Security (DHS) Customs and Border Protection
(CBP). ManTech was awarded a 5-year contract totaling $128
million to provide CBP with program management, engineering and
consulting support.
The Company received a number of additional
contract awards in the quarter including several extensions to
existing contracts and new contracts from various customers.
Approximately 65% of the awards won in the quarter were with
classified customers to provide enterprise IT, systems engineering
and integration, cyber and insider threat capabilities.
In addition, the Company won a multiple-award
indefinite-delivery, indefinite-quantity (IDIQ) contract, which is
not included in bookings:
- Army Program Executive Office - Intelligence,
Electronic Warfare and Sensors (PEO IEW&S) R4 IDIQ.
Under this 10-year, $982 million multiple award contract ManTech
will have the opportunity to win task orders to provide a range of
cyber and electronic warfare services and solutions.
The Company’s backlog of business at quarter end
was $8.4 billion and funded backlog was $1.5 billion.
Forward Guidance
Based on our strong performance year to date and
the recent acquisition of KGS, we are raising our 2019 guidance
range on revenue, net income and diluted earnings per share as
specified in the table below.
|
Measure |
Fiscal 2019 Guidance |
|
Revenue (billion) |
$2.13
- $2.21 |
| Net
Income (million) |
$88.9
- $93.9 |
|
Diluted Earnings per Share |
$2.21
- $2.33 |
ManTech Chief Financial Officer Judith L.
Bjornaas said, "I am pleased with the strong performance of the
business in the first quarter. We continue to optimize shareholder
value through our strong operational execution coupled with our
prudent capital deployment on strategic acquisitions. We remain
focused on capturing new business and growing our direct labor base
to sustain our financial success."
Conference Call
ManTech executive management will hold a
conference call on May 1, 2019, at 5 p.m. Eastern to discuss
the financial results and outlook and answer questions. Analysts
may participate on the conference call by dialing 877-638-9567
(domestic) or 253-237-1032 (international) and entering passcode
3045768. The conference call will be webcast simultaneously
to the public through a link on the Investor Relations section of
the ManTech website (http://investor.mantech.com). A replay of the
conference call will be available on the ManTech website
approximately 2 hours after the conclusion of the conference
call.
About ManTech International
Corporation
ManTech provides mission-focused technology
solutions and services for U.S. defense, intelligence community and
federal civilian agencies. In business more than 50 years, we
excel in full-spectrum cyber, data collection & analytics,
enterprise IT, systems and software engineering solutions that
support national and homeland security. Additional information
about 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,” “expect,” “intend,”
“anticipate,” “believe,” or “estimate,” or the negative of these
terms or words of similar import, are intended to identify
forward-looking statements.
These forward-looking statements are inherently
subject to risks and uncertainties, and actual results and outcomes
may differ materially from the results and outcomes we anticipate.
Factors that could cause actual results to differ materially from
the results we anticipate include, but are not limited to, the
following: failure to maintain our relationship with the U.S.
government, or compete effectively for contract awards; inability
to recruit and retain sufficient number of employees with
specialized skill sets or necessary security clearances who are in
great demand and limited supply; adverse changes in U.S. government
spending for programs we support, whether due to changing mission
priorities, socio-economic policies, cost reduction initiatives by
our customers, or other federal budget constraints generally;
disruption of our business or damage to our reputation resulting
from security breaches in customer systems, internal systems
(including as a result of cyber or other security threats), or
employee misconduct; failure to realize the full amount of our
backlog or adverse changes in the timing of receipt of revenues
under contracts included in backlog; issues relating to competing
effectively for awards procured through the competitive bidding
process; failure to obtain option awards, task orders or funding
under contracts; renegotiation, modification or termination of our
contracts, or failure to perform in conformity with contract terms
or our expectations; failure to successfully integrate acquired
companies or businesses into our operations or to realize any
accretive or synergistic effects from such acquisitions;
non-compliance with, or adverse changes in, complex U.S. government
laws, procurement regulations or processes; and adverse results of
U.S. government audits or other investigations of our government
contracts. These and other risk factors are more fully discussed in
the section entitled "Risk Factors" in ManTech's Annual Report on
Form 10-K previously filed with the Securities and Exchange
Commission on Feb. 22, 2019, Item 1A of Part II of our Quarterly
Reports on Form 10-Q, and, from time to time, in ManTech's other
filings with the Securities and Exchange Commission.
The forward-looking statements included herein
are only made as of the date of this press 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
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(In Thousands Except Share and Per Share
Amounts) |
| |
|
| |
(unaudited) |
| |
March 31, 2019 |
|
December 31, 2018 |
|
ASSETS |
|
|
|
| Cash and cash
equivalents |
$ |
120,535 |
|
|
$ |
5,294 |
|
| Receivables—net |
390,851 |
|
|
405,378 |
|
| Prepaid expenses |
21,356 |
|
|
23,398 |
|
| Other current
assets |
4,776 |
|
|
5,915 |
|
| Total
Current Assets |
537,518 |
|
|
439,985 |
|
| Goodwill |
1,085,806 |
|
|
1,085,806 |
|
| Other intangible
assets—net |
167,092 |
|
|
171,962 |
|
| Operating lease right
of use assets |
119,807 |
|
|
— |
|
| Property and
equipment—net |
54,479 |
|
|
51,427 |
|
| Employee supplemental
savings plan assets |
33,606 |
|
|
30,501 |
|
| Investments |
11,817 |
|
|
11,830 |
|
| Other assets |
13,529 |
|
|
12,360 |
|
| TOTAL
ASSETS |
$ |
2,023,654 |
|
|
$ |
1,803,871 |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
LIABILITIES |
|
|
|
| Accounts payable and
accrued expenses |
$ |
128,746 |
|
|
$ |
126,066 |
|
| Accrued salaries and
related expenses |
82,384 |
|
|
89,058 |
|
| Contract
liabilities |
28,830 |
|
|
28,209 |
|
| Operating lease
liabilities—current |
26,260 |
|
|
— |
|
| Total
Current Liabilities |
266,220 |
|
|
243,333 |
|
| Long term debt |
96,000 |
|
|
7,500 |
|
| Deferred income
taxes |
111,714 |
|
|
108,956 |
|
| Operating lease
liabilities—long term |
104,465 |
|
|
— |
|
| Accrued retirement |
31,238 |
|
|
30,999 |
|
| Other long-term
liabilities |
830 |
|
|
11,889 |
|
| TOTAL
LIABILITIES |
610,467 |
|
|
402,677 |
|
| COMMITMENTS AND
CONTINGENCIES |
|
|
|
| STOCKHOLDERS'
EQUITY |
|
|
|
| Common stock, Class
A—$0.01 par value; 150,000,000 shares authorized; 26,916,995 and
26,817,513 shares issued at March 31, 2019 and December 31,
2018; 26,672,882 and 26,573,400 shares outstanding at March 31,
2019 and December 31, 2018 |
269 |
|
|
268 |
|
| Common stock, Class
B—$0.01 par value; 50,000,000 shares authorized; 13,188,045 and
13,188,045 shares issued and outstanding at March 31, 2019 and
December 31, 2018 |
132 |
|
|
132 |
|
| Additional paid-in
capital |
508,605 |
|
|
506,970 |
|
| Treasury stock, 244,113
and 244,113 shares at cost at March 31, 2019 and December 31,
2018 |
(9,158 |
) |
|
(9,158 |
) |
| Retained earnings |
913,429 |
|
|
903,084 |
|
| Accumulated other
comprehensive loss |
(90 |
) |
|
(102 |
) |
| TOTAL
STOCKHOLDERS’ EQUITY |
1,413,187 |
|
|
1,401,194 |
|
| TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
2,023,654 |
|
|
$ |
1,803,871 |
|
| |
|
| MANTECH INTERNATIONAL
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
INCOME(In Thousands Except Per Share
Amounts) |
| |
|
| |
(unaudited) Three months ended March
31, |
| |
2019 |
|
2018 |
|
REVENUE |
$ |
501,930 |
|
|
$ |
473,236 |
|
| Cost of
services |
431,083 |
|
|
403,933 |
|
| General
and administrative expenses |
42,315 |
|
|
42,882 |
|
| OPERATING
INCOME |
28,532 |
|
|
26,421 |
|
| Interest
expense |
(484 |
) |
|
(734 |
) |
| Interest
income |
190 |
|
|
15 |
|
| Other
income (expense), net |
(42 |
) |
|
4 |
|
| INCOME FROM
OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD
INVESTMENTS |
28,196 |
|
|
25,706 |
|
| Provision for income
taxes |
(7,066 |
) |
|
(5,679 |
) |
| Equity in earnings
(losses) of unconsolidated subsidiaries |
(12 |
) |
|
40 |
|
| NET
INCOME |
$ |
21,118 |
|
|
$ |
20,067 |
|
| BASIC EARNINGS
PER SHARE: |
|
|
|
|
Class A common stock |
$ |
0.53 |
|
|
$ |
0.51 |
|
| Class B
common stock |
$ |
0.53 |
|
|
$ |
0.51 |
|
| DILUTED
EARNINGS PER SHARE: |
|
|
|
|
Class A common stock |
$ |
0.53 |
|
|
$ |
0.51 |
|
| Class B
common stock |
$ |
0.53 |
|
|
$ |
0.51 |
|
| |
|
| MANTECH INTERNATIONAL
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(In Thousands) |
| |
|
| |
(unaudited) Three months ended March
31, |
| |
2019 |
|
2018 |
| CASH FLOWS FROM
(USED IN) OPERATING ACTIVITIES: |
|
|
|
| Net income |
$ |
21,118 |
|
|
$ |
20,067 |
|
| Adjustments to
reconcile net income to net cash flow from (used in) operating
activities: |
|
|
|
|
Depreciation and amortization |
12,644 |
|
|
13,209 |
|
| Noncash
lease expense |
6,814 |
|
|
— |
|
| Deferred
income taxes |
2,758 |
|
|
3,969 |
|
|
Stock-based compensation expense |
1,311 |
|
|
1,054 |
|
| Equity in
(earnings) losses of unconsolidated subsidiaries |
12 |
|
|
(40 |
) |
| Change in assets and
liabilities—net of effects from acquired businesses: |
|
|
|
|
Receivables—net |
14,527 |
|
|
(45,458 |
) |
| Prepaid
expenses |
(1,463 |
) |
|
(5,616 |
) |
| Other
current assets |
1,139 |
|
|
2,361 |
|
| Employee
supplemental savings plan asset |
(3,105 |
) |
|
255 |
|
| Accounts
payable and accrued expenses |
3,923 |
|
|
4,980 |
|
| Accrued
salaries and related expenses |
(6,674 |
) |
|
(9,873 |
) |
| Contract
liabilities |
621 |
|
|
(397 |
) |
| Operating
lease liabilities |
(6,752 |
) |
|
— |
|
| Accrued
retirement |
239 |
|
|
(2,224 |
) |
|
Other |
227 |
|
|
(302 |
) |
| Net cash flow
from (used in) operating activities |
47,339 |
|
|
(18,015 |
) |
| CASH FLOWS FROM
(USED IN) INVESTING ACTIVITIES: |
|
|
|
| Purchases of property
and equipment |
(7,238 |
) |
|
(6,574 |
) |
| Deferred contract
costs |
(1,892 |
) |
|
(295 |
) |
| Investment in
capitalized software for internal use |
(1,024 |
) |
|
(2,097 |
) |
| Net cash used
in investing activities |
(10,154 |
) |
|
(8,966 |
) |
| CASH FLOWS FROM
(USED IN) FINANCING ACTIVITIES: |
|
|
|
| Borrowing under
revolving credit facility |
240,000 |
|
|
191,000 |
|
| Repayments under
revolving credit facility |
(151,500 |
) |
|
(156,500 |
) |
| Dividends paid |
(10,744 |
) |
|
(9,861 |
) |
| Proceeds from exercise
of stock options |
1,682 |
|
|
5,996 |
|
| Payment consideration
to tax authority on employees' behalf |
(1,357 |
) |
|
(2,723 |
) |
| Principal paid on
financing leases |
(25 |
) |
|
— |
|
| Net cash flow
from financing activities |
78,056 |
|
|
27,912 |
|
| NET CHANGE IN
CASH AND CASH EQUIVALENTS |
115,241 |
|
|
931 |
|
| CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD |
5,294 |
|
|
9,451 |
|
| CASH AND CASH
EQUIVALENTS, END OF PERIOD |
$ |
120,535 |
|
|
$ |
10,382 |
|
| |
|
|
|
|
|
|
|
ManTech-F
ManTech International Corporation
Investor Relations
| Judy Bjornaas |
Stephen Vather |
|
| Executive Vice
President and CFO |
Executive Director,
Corporate Development |
|
| (703) 218-8269 |
(703) 218-6093 |
|
|
Investor.Relations@ManTech.com |
Stephen.Vather@ManTech.com |
|
MediaJim CrawfordExecutive
Director, External Communications(O) (703) 259-3636 | (M)
571-466-7550James.Crawford2@ManTech.com
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