MANT
$74.58
Mantech Intl Cp A
$1.22
1.66%
Earnings Details
2nd Quarter June 2020
Wednesday, July 29, 2020 4:05:00 PM
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Summary

ManTech Raises Guidance

Mantech Intl Cp A (MANT) reported 2nd Quarter June 2020 earnings of $0.84 per share on revenue of $632.5 million. The consensus earnings estimate was $0.66 per share on revenue of $568.3 million. Revenue grew 17.8% on a year-over-year basis.

The company said it expects 2020 earnings of $3.14 to $3.21 per share on revenue of $2.45 billion to $2.50 billion. The company's previous guidance was earnings of $2.95 to $3.07 per share on revenue of $2.35 billion to $2.45 billion and the current consensus earnings estimate is $3.04 per share on revenue of $2.41 billion for the year ending December 31, 2020.

Mantech International Corp provides technologies and solutions for mission-critical national security programs for the Intelligence Community, the departments of Defence, State, Homeland Security, Health and Human Services, Veterans Affairs and Justice.

Results
Reported Earnings
$0.84
Earnings Whisper
-
Consensus Estimate
$0.66
Reported Revenue
$632.5 Mil
Revenue Estimate
$568.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

ManTech Announces Financial Results for Second Quarter of 2020

  • Revenue: $632 million, up 18% from the second quarter of 2019
  • EBITDA Margin: 8.9%
  • Diluted EPS: $0.74, up 23% from the second quarter of 2019
  • Adjusted Diluted EPS: $0.84, up 20% from the second quarter of 2019
  • Bookings of $663 million resulting in a book-to-bill ratio of 1.0
  • Cash Flow from Operations: $62 million
  • Raises and narrows the range of 2020 guidance on all measures

HERNDON, Va., July 29, 2020 (GLOBE NEWSWIRE) -- 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 2020, which ended June 30, 2020.

"ManTech's agility and resilience continues to be evidenced by our financial performance. The company produced another quarter of exceptional organic growth, healthy profitability and robust cash flow. Our talented people's passion for delivering innovation and their steadfast commitment to customer missions underpin our continuing success," said ManTech President and Chief Executive Officer, Kevin M. Phillips.

Summary Operating Results

 Three months ended
June 30,
(In Millions Except Per Share Amounts)2020 2019
Revenue$632.5 $537.0
Operating Income$39.6 $33.3
Net Income$29.9 $24.2
Diluted EPS$0.74 $0.60
 
Non-GAAP Financial Measures*
EBITDA$56.6 $46.3
EBITDA Margin8.9% 8.6%
Adjusted Net Income$33.9 $28.0
Adjusted Diluted EPS$0.84 $0.70

*Information about ManTech's use of non-GAAP financial measures, including a reconciliation of the non-GAAP financial measures to the most comparable financial measures calculated and presented in accordance with GAAP, is provided under "Non-GAAP Financial Measures."

As a result of strong continued demand for our services and solutions, revenue was $632 million, up 18% from the second quarter of 2019. In the quarter, revenue growth was primarily organically driven as a result of recent contract awards.

Operating income was $39.6 million for the quarter, up 19% from the second quarter of 2019. Net income was $29.9 million and diluted earnings per share ("EPS") was $0.74, up 24% and 23% from the second quarter of 2019, respectively.

EBITDA was $56.6 million for the quarter, up 22% from the second quarter of 2019, representing an EBITDA margin of 8.9% for the quarter. Adjusted net income was $33.9 million and adjusted diluted EPS was $0.84, up 21% and 20% from the second quarter of 2019, respectively.

Cash Management and Capital Deployment

For the quarter, cash flow from operations totaled $62 million. Days sales outstanding (DSO) were 63 days, an improvement of 3 days compared to the second quarter of 2019.

During the quarter, the Company paid $12.9 million, or $0.32 per share, as part of its regular cash dividend program to its common stockholders of record as of June 5, 2020. As of June 30, 2020, the Company had $29.7 million in cash and cash equivalents and $20.0 million of outstanding borrowings on its $500 million revolving-credit facility, which provides the Company with ample financial capacity to fund operations, pursue acquisitions and issue dividends while maintaining a strong balance sheet.

The Board of Directors has declared a quarterly dividend of $0.32 to be paid September 25, 2020, to all common stockholders of record as of September 11, 2020, 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 $663 million in the quarter, representing a book-to-bill ratio of 1.0. In the second quarter, approximately 20% of the awards were for new business. ManTech's notable single-award contracts in the quarter include:

  • Cyber and IT Modernization Services for the Navy. ManTech was awarded a new, 5-year contract totaling $87 million to provide cyber, enterprise IT and software engineering services in support of the Navy Maritime Maintenance Enterprise Solution for the Naval Sea Systems Command.
     
  • Advance Secure, Integrated Network Communications for the Navy. ManTech was awarded a 5-year contract totaling $66 million to continue providing research and development, engineering, test and evaluation, training and cyber services on communication and electronic systems for the Naval Air Warfare Center Aircraft Division.

The Company received a number of additional contract awards in the quarter including several extensions to existing contracts and new contracts from various customers, most of which are classified.

The Company’s backlog of business at quarter end was $9.2 billion including $1.4 billion of funded backlog.

Forward Guidance

The Company has raised and narrowed the range of its 2020 guidance for revenue, adjusted net income and adjusted diluted earnings per share as specified in the table below.

MeasureFiscal 2020 Guidance
Revenue (million)$2,450 - $2,500
Adjusted Net Income* (million)$127.6 - $130.3
Adjusted Diluted EPS*$3.14 - $3.21

*Information about ManTech's use of non-GAAP financial measures is provided under "Non-GAAP Financial Measures"

Adjusted net income and adjusted diluted EPS exclude amortization of acquired intangibles and the related tax impact. The Company does not provide a reconciliation of forward-looking adjusted net income and adjusted diluted EPS, due to inherent difficulty in forecasting and quantifying these non-GAAP exclusions that are necessary for such reconciliation without unreasonable efforts. Material changes to any one of these items could have significant effect on future GAAP results.

ManTech Chief Financial Officer Judith L. Bjornaas said, "We have outperformed against plan in the first half of 2020 and will look to maintaining that momentum for the balance of the year. Our backlog continues to afford us good visibility and a path to sustained growth."

Conference Call

ManTech executive management will hold a conference call on July 29, 2020, 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 3476156. 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 the failure to compete effectively for new contract awards or to retain existing U.S. government contracts; disruptions to our business resulting from the recent outbreak of the novel coronavirus disease 2019 (known as COVID-19) or other similar global health epidemics, pandemics and/or other disease outbreaks; adverse changes in U.S. government spending for programs we support, whether due to changing mission priorities, economic and political policy changes or federal budget constraints generally; inability to recruit and retain a sufficient number of employees with specialized skill sets or necessary security clearances who are in great demand and limited supply; failure compete effectively for awards procured through the competitive bidding process, and the adverse impact of delays resulting from our competitors' protest of new contracts that are awarded to us; disruptions of our business or damage to our reputation resulting from cyber attacks and other security threats; failure to obtain option awards, task orders or funding under contracts; the government renegotiating, modifying or terminating of our contracts; failure to comply with, or adverse change in, complex U.S. government laws and procurement; adverse results in U.S. government audits or other investigations of our government contracts; failure to successfully integrate acquired companies or businesses into our operations or to realize any accretive or synergistic effects from such acquisitions; failure to mitigate risk associated with conducting business internationally; and adverse change in business conditions that may cause our investments in recorded goodwill to become impaired. 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 CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share and Per Share Amounts)

 (unaudited)
 June 30,
 2020
 December 31,
 2019
ASSETS   
Cash and cash equivalents$29,668  $8,854 
Receivables—net443,018  398,976 
Prepaid expenses38,172  20,030 
Taxes receivable—current6,586  21,996 
Other current assets6,089  4,878 
Total Current Assets523,533  454,734 
Goodwill1,191,270  1,191,259 
Other intangible assets—net188,651  196,778 
Property and equipment—net111,381  85,631 
Operating lease right of use assets102,187  117,728 
Employee supplemental savings plan assets32,740  36,777 
Investments11,549  11,550 
Other assets13,458  13,457 
TOTAL ASSETS$2,174,769  $2,107,914 
LIABILITIES AND STOCKHOLDERS' EQUITY   
LIABILITIES   
Accounts payable and accrued expenses$146,936  $146,016 
Accrued salaries and related expenses114,911  97,298 
Contract liabilities47,766  27,620 
Operating lease obligations—current29,063  29,047 
Total Current Liabilities338,676  299,981 
Deferred income taxes134,352  131,782 
Operating lease obligations—long term89,149  103,148 
Accrued retirement31,525  35,552 
Long term debt20,000  36,500 
Other long-term liabilities27,978  10,309 
TOTAL LIABILITIES641,680  617,272 
COMMITMENTS AND CONTINGENCIES   
STOCKHOLDERS' EQUITY   
Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 27,388,381 and 27,235,860 shares issued at June 30, 2020 and December 31, 2019; 27,144,268 and 26,991,747 shares outstanding at June 30, 2020 and December 31, 2019274  272 
Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 13,187,195 and 13,187,195 shares issued and outstanding at June 30, 2020 and December 31, 2019132  132 
Additional paid-in capital535,464  525,851 
Treasury stock, 244,113 and 244,113 shares at cost at June 30, 2020 and December 31, 2019(9,158) (9,158)
Retained earnings1,006,624  973,767 
Accumulated other comprehensive loss(247) (222)
TOTAL STOCKHOLDERS' EQUITY1,533,089  1,490,642 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,174,769  $2,107,914 
 

MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)

 (unaudited)
Three months ended
June 30,
 (unaudited)
Six months ended
June 30,
 2020 2019 2020 2019
REVENUE$632,492  $537,037  $1,243,404  $1,038,967 
Cost of services539,473  459,266  1,059,764  890,349 
General and administrative expenses53,433  44,474  105,156  86,789 
OPERATING INCOME39,586  33,297  78,484  61,829 
Interest expense(632) (945) (1,287) (1,429)
Interest income137  121  187  311 
Other income (expense), net  31  (22) (11)
INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS39,091  32,504  77,362  60,700 
Provision for income taxes(9,143) (8,290) (18,734) (15,356)
Equity in (losses) of unconsolidated subsidiaries    (1) (12)
NET INCOME$29,948  $24,214  $58,627  $45,332 
BASIC EARNINGS PER SHARE:       
Class A common stock$0.74  $0.61  $1.46  $1.14 
Class B common stock$0.74  $0.61  $1.46  $1.14 
DILUTED EARNINGS PER SHARE:       
Class A common stock$0.74  $0.60  $1.44  $1.13 
Class B common stock$0.74  $0.60  $1.44  $1.13 
                

MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

 (unaudited)
Six months ended
June 30,
 2020 2019
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:   
Net income$58,627  $45,332 
Adjustments to reconcile net income to net cash flow from (used in) operating activities:   
Depreciation and amortization33,154  25,630 
Noncash lease expense13,357  13,503 
Deferred income taxes2,570  5,468 
Stock-based compensation expense5,510  3,250 
Bad debt expense2,156   
Contract loss reserve(372) (505)
Equity in losses of unconsolidated subsidiaries1  12 
Change in assets and liabilities—net of effects from acquired businesses:   
Receivables—net(46,198) 30,151 
Prepaid expenses(18,142) (13,704)
Taxes receivable—current15,410  (1,711)
Other current assets1,026  2,896 
Employee supplemental savings plan asset(100) (4,253)
Accounts payable and accrued expenses2,196  11,522 
Accrued salaries and related expenses17,613  1,353 
Operating lease obligations(14,286) (13,487)
Contract liabilities20,146  15,317 
Accrued retirement(4,027) 1,977 
Other long-term liabilities17,687  280 
Other(1,651) 412 
Net cash flow from operating activities104,677  123,443 
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:   
Purchases of property and equipment(45,600) (21,946)
Investment in capitalized software(5,016) (1,952)
Proceeds from corporate owned life insurance4,137   
Proceeds from sale of property and equipment869   
Acquisition of a business-net of cash acquired  (114,552)
Deferred contract costs  (2,658)
Proceeds from equity method investment  283 
Net cash used in investing activities(45,610) (140,825)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:   
Borrowing under revolving credit facility261,500  333,000 
Repayments under revolving credit facility(278,000) (297,000)
Dividends paid(25,782) (21,548)
Proceeds from exercise of stock options4,882  4,979 
Payment consideration to tax authority on employees' behalf(777) (1,357)
Principal paid on financing leases(76) (62)
Net cash from (used in) financing activities(38,253) 18,012 
NET CHANGE IN CASH AND CASH EQUIVALENTS20,814  630 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD8,854  5,294 
CASH AND CASH EQUIVALENTS, END OF PERIOD$29,668  $5,924 


Non-GAAP Financial Measures (Unaudited)

To supplement the review of ManTech's consolidated financial statements presented on a GAAP basis, the Company has provided non-GAAP calculations of certain financial measures. ManTech uses and refers to EBITDA, EBITDA margin, adjusted net income and adjusted EPS, all of which are non-GAAP financial measures. These non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for the comparable GAAP measures.

ManTech’s management believes that these non-GAAP financial measures provide additional useful information regarding the Company’s operational and financial results. These non-GAAP financial measures eliminate the effect of non-cash items such as depreciation of tangible assets and amortization of intangible assets primarily recognized in business combinations as well as the effect of discrete tax items which we do not believe are indicative of our core operating performance. These non-GAAP financial measures are considered important and frequently utilized by investors and financial analysts covering ManTech’s industry. The Company’s computation of its non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies, thus limiting their use for comparability.

The following tables present selected financial data, including the reconciliation of the non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP.

EBITDA is calculated by excluding depreciation and amortization expense, interest expense, interest income, other expense, income taxes and equity in losses of unconsolidated subsidiaries from net income.

EBITDA margin is calculated by dividing EBITDA by revenue.

 Three months ended
June 30,
(In Thousands)2020 2019
NET INCOME$29,948  $24,214 
Provision for income taxes9,143  8,290 
INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS$39,091  $32,504 
Other expense (income), net  (31)
Interest income(137) (121)
Interest expense632  945 
Depreciation and amortization17,016  12,986 
EBITDA$56,602  $46,283 
EBITDA Margin8.9% 8.6%

Adjusted net income is calculated by excluding the following items and the related tax impacts from net income: (i) amortization of acquired intangible assets and (ii) discrete tax items.

Adjusted diluted EPS is calculated by dividing adjusted net income by the diluted weighted average number of shares outstanding.

 Three months ended
June 30,
(In Thousands Except Per Share Amounts)2020 2019
NET INCOME$29,948  $24,214 
Amortization of acquired intangibles5,176  5,053 
Adjustments for tax effect(1,211) (1,289)
ADJUSTED NET INCOME$33,913  $27,979 
    
ADJUSTED DILUTED EPS   
Class A common stock$0.84  $0.70 
Class B common stock$0.84  $0.70 

Note: Figures may not add due to rounding.

Investor RelationsMedia
Stephen VatherSheila Blackwell
VP, M&A and Investor RelationsVP, Enterprise Marketing & Communications
(703) 218-6093(301) 717-7345
Stephen.Vather@ManTech.comSheila.Blackwell@ManTech.com

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Source: ManTech International Corporation