ManTech Reports Record Second Quarter Results and Final Integration of Acquisitions.Business Editors/High-Tech Writers FAIRFAX Fairfax, city (1990 pop. 19,622), historic seat of Fairfax co., NE Va., a residential suburb of Washington, D.C.; inc. 1892, as a city 1961 (at which time it became independent and no longer included in a county). There is some light manufacturing. , Va.--(BUSINESS WIRE)--July 30, 2003 ManTech International Corporation (Nasdaq:MANT), a leading provider of information technology and technical services solutions to the Department of Defense and the intelligence community, today announced record operating results for the second quarter and increased earnings and revenue guidance for the full year 2003. ManTech's revenue for the second quarter 2003 was $177.1 million, an increase of 48.6% over the same period in 2002, and fully diluted Earnings Per Share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) rose 55.6% to $0.28. The company also announced the completion of the integration of its recently acquired companies and the consolidation of operations across the enterprise. "ManTech's strong second quarter results demonstrate the value of our unified business platform--we have completed the integration of all four acquisitions and carried out additional consolidation among these acquisitions and the other ManTech operations," stated George George, river, c.345 mi (560 km) long, rising in a lake on the Quebec-Labrador boundary, E Canada. It flows N through Indian Lake (125 sq mi/324 sq km) to Ungava Bay (an arm of Hudson Strait). J. Pedersen Pedersen is a surname, and may refer to
adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. spending and budget trends to continue to sustain our growth well into 2005." ManTech International Corporation reported revenue for the quarter ending June June: see month. 30, 2003 of $177.1 million, up from $119.2 million for the same period in 2002, an increase of 48.6%. The results reflect an organic growth rate of 13.0% over the $156.7 million in pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma revenue for the comparable period in 2002 which includes the revenue for each period of the companies acquired by ManTech since that time. This revenue growth was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to new business supporting national security programs for the intelligence community and Department of Defense. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the quarter was $15.3 million, an increase of 64.1% over 2002. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the quarter expanded to 8.6% compared with 7.8% for the same period in 2002. The margin expansion in the quarter is attributable both to higher margin contributions from acquired companies and to operating efficiencies. Net income for the quarter rose 82.6% to $8.9 million from $4.9 million in 2002. Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS were $0.28, up from $0.18 in 2002. ManTech also announced the completion of the integration of the four companies it had acquired in the past year, as well as the consolidation of various operations across the enterprise. The National Security Solutions Group (NSSG NSSG National Statistical Service of Greece NSSG NATO Standardization Staff Group ), the primary group supporting intelligence community customers, consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: six business units into three core operations focusing on mission critical systems development, security, and intelligence operations The variety of intelligence and counterintelligence tasks that are carried out by various intelligence organizations and activities within the intelligence process. Intelligence operations include planning and direction, collection, processing and exploitation, analysis and production, . ManTech also announced the formation of the Defense Systems Group (DSG DSG Direct Shift Gearbox (Audi) DSG Dosage DSG Deputy Secretary General DSG Dressing DSG Designate DSG Desmoglein DSG Duke Student Government (Duke University) ), a consolidation of DoD-related operations from NSSG and the Systems Engineering Group, to focus on Department of Defense Armed Services The Constitution authorizes Congress to raise, support, and regulate armed services for the national defense. The President of the United States is commander in chief of all the branches of the services and has ultimate control over most military matters. customers. The company's Information Technology Group will continue to focus on enterprise support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services for federal agencies. ManTech reported recent contract awards and contract expansions with an estimated value in excess of $250 million, including previously unannounced classified contract awards and existing contract expansions totaling approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $150 million. Demonstrating the capabilities of the Company in both expansion of existing customer relationships and in leveraging its enhanced market position provided through its acquisitions, ManTech highlighted its second quarter contract announcements which included the $88.6 million contract award in support of State Department IT modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, efforts and the $6.8 million Air Force award that resulted from a joint business development effort by an established ManTech operation and a newly acquired company. ManTech reported backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of $1.5 billion as of June 30, 2003, compared with $1.1 billion on the same date in 2002. Funded backlog as of June 30, 2003 was $342.2 million, an increase of 69.3% over the same date in 2002. GSA (1) (Global mobile Suppliers Association, Sawbridgeworth, U.K., www.gsacom.com) A membership organization of suppliers of GSM products and services. Its goal is to promote GSM as the worldwide mobile communications standard. See GSM Association and GSM. schedule contract value at June 30, 2003 was estimated at $1.1 billion, up from $939.2 million on the same date in 2002. At the end of the second quarter, ManTech had approximately $700 million in proposals under evaluation and a pipeline of qualified opportunities exceeding $4.5 billion. ManTech derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. 90.1% of its revenue during the quarter ended June 30, 2003 from prime contracts, and approximately 39% of its revenue for the period came from work under GSA schedule contracts. Revenue from the Department of Defense and the intelligence community accounted for 88.7% of revenue for the second quarter ending June 30, 2003. Revenue from work in secure systems and information technology solutions increased to 81.7% of revenue in the second quarter 2003 from 74.7% in 2002. ManTech increased 2003 fiscal year guidance to reflect strong performance in the first half of the year and positive spending trends in its core intelligence community and DoD markets:
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3rd Quarter 2003 Full Year 2003
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Revenue $180 million - $695 million -
$184 million $705 million
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Diluted Earnings Per Share $0.28 - $0.29 $1.07 - $1.09
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Weighted Average Common
Shares Outstanding 32,235,633 32,133,084
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Conference Call ManTech has scheduled a conference call for 5:00 p.m., EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT July July: see month. 30, 2003, during which executive management will discuss second quarter results and respond to questions. Interested parties may access the call by dialing 800-759-3578 or 706-679-7301. The conference call will be Webcast (listen only) simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.mantech.com. Interested parties should dial in or log on approximately ten minutes prior to the start time of the call. A replay of the call will also be available beginning at 9:00 p.m. on July 30, 2003, and will remain available through midnight on August 6, 2003. To access the replay, call 800-642-1687 or 706-645-9291. The confirmation code for the replay is 1578232. 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 Fairfax is an independent city forming an enclave within the confines of Fairfax County, in the Commonwealth of Virginia. Although politically independent of the surrounding county, the City of Fairfax is nevertheless its county seatGR6. , ManTech International Corporation delivers a broad array of information technology and technical services solutions to U.S. federal government customers, focusing primarily on critical national defense programs for the intelligence community and Department of Defense. ManTech designs, develops, procures, implements, operates, tests and maintains mission-critical, enterprise information technology and communication systems and infrastructures for federal government customers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and 34 countries worldwide. Additional information can be found at www.mantech.com or by calling 703-218-8200. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve substantial risks and uncertainties. You can identify these statements by forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "continue" and other similar words. You should read statements that contain these words carefully because they discuss the Company's future expectations, make projections of the company's future results of operations or financial condition or state other forward-looking information. Examples of such forward-looking statements include the company's expected future earnings as suggested by backlog and GSA schedule value estimates; updated guidance projections; and the company's belief that there will be increased defense and intelligence spending in the future. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. The factors that could cause actual results to differ materially from those anticipated include, but are not limited to the following: failure of government customers to exercise options under contracts; funding decisions of U.S. Government projects; government contract procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. (such as bid protest) and termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. risks; competitive factors such as pricing pressures and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. competition to hire and retain employees; the company's ability to identify, execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution or effectively integrate future acquisitions; the company's ability to successfully raise additional capital; changes to the tax laws relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the treatment and deductibility of goodwill or any change in tax rates; additional costs related to compliance with the Sarbanes-Oxley Act See SOX. of 2002, any revised NASDAQ listing standards, SEC rule changes or other corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. issues; failure to experience continued positive defense and intelligence budget and spending trends; material changes in laws or regulations applicable to the company's businesses and other risk factors discussed in the company's filings with the Securities and Exchange Commission. The statements in this press release are made as of July 30, 2003, and the company undertakes no obligation to update any of the forward looking statements made herein, whether as a result of new information, future events, changes in expectations or otherwise. Financials Follow
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)
Three months ended Six months ended
June 30, June 30,
----------------------- -----------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
REVENUES $177,076 $119,168 $325,199 $227,302
COST OF SERVICES 144,350 97,280 264,132 185,890
----------- ----------- ----------- -----------
GROSS PROFIT 32,726 21,888 61,067 41,412
----------- ----------- ----------- -----------
RETURN ON SALES % 18.5% 18.4% 18.8% 18.2%
COSTS AND EXPENSES:
General and
administrative 16,195 12,057 30,934 23,490
Depreciation and
amortization 1,242 516 2,177 1,004
----------- ----------- ----------- -----------
Total costs
and expenses 17,437 12,573 33,111 24,494
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 15,289 9,315 27,956 16,918
RETURN ON SALES % 8.6% 7.8% 8.6% 7.4%
Interest expense
(income) 687 (14) 1,021 203
Other (income) expense (352) (225) 270 (522)
----------- ----------- ----------- -----------
INCOME BEFORE
PROVISION FOR INCOME
TAXES AND MINORITY
INTEREST 14,954 9,554 26,665 17,237
Provision for income
taxes(a) (6,075) (3,896) (10,823) (7,004)
Minority interest (2) (1) (3) (3)
----------- ----------- ----------- -----------
INCOME FROM CONTINUING
OPERATIONS 8,877 5,657 15,839 10,230
Loss on disposal of
discontinued
operations--net -- (795) -- (795)
----------- ----------- ----------- -----------
NET INCOME $8,877 $4,862 $15,839 $9,435
=========== =========== =========== ===========
BASIC EARNINGS (LOSS)
PER SHARE:
Income from
continuing
operations $0.28 $0.21 $0.50 $0.42
Loss from
discontinued
operations -- (0.03) -- (0.03)
----------- ----------- ----------- -----------
$0.28 $0.18 $0.50 $0.39
=========== =========== =========== ===========
Weighted average
common shares
outstanding 31,941,783 26,373,719 31,928,870 24,553,641
=========== =========== =========== ===========
DILUTED EARNINGS
(LOSS) PER SHARE:
Income from
continuing
operations $0.28 $0.21 $0.50 $0.41
Loss from
discontinued
operations -- (0.03) -- (0.03)
----------- ----------- ----------- -----------
$0.28 $0.18 $0.50 $0.38
=========== =========== =========== ===========
Weighted average
common shares
outstanding 31,994,687 26,697,911 31,964,829 24,838,112
=========== =========== =========== ===========
(a) NOTE: ManTech reported cash tax savings related to the four
recent acquisitions of $1.1 million during the second quarter of 2003
due to the deductibility of $153.4 million of goodwill and related
intangibles. The goodwill and related intangibles are deductible
because ManTech and the shareholders of the acquired companies made a
joint section 338(h) (10) election under the federal Tax Code.
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Six months ended
June 30,
-----------------------
2003 2002
----------- -----------
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $15,839 $9,435
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Equity in losses (earnings) of affiliates 781 (483)
Loss from discontinued operations -- 795
Deferred income taxes (1,928) (2,995)
Minority interest in income of
consolidated subsidiaries 3 3
Loss on disposals of property and
equipment 11 8
Depreciation and amortization 3,107 1,749
Change in assets and liabilities--net of
effects from acquired and discontinued
businesses:
Increase in receivables (5,752) (11,786)
(Increase) decrease in prepaid
expenses and other (1,643) 2,374
Decrease in accounts payable and
accrued expenses (708) (2,439)
(Decrease) increase in accrued
salaries and related expenses (3,159) 467
Increase in billings in excess of
revenue earned 1,988 306
Increase (decrease) in other long-
term liabilities 86 (51)
Increase in accrued retirement 403 540
----------- -----------
Net cash provided by (used in) operating
activities of continuing operations 9,028 (2,077)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of property and
equipment 1 2
Investment in Integrated Data Systems, net
of cash acquired of $2,820 (63,139) --
Investment in MSM Security Services, Inc.,
net of cash acquired of $20 (5,093) --
Investment in property and equipment (1,884) (1,510)
Investment in capitalized software
products (1,015) (322)
Investment in CTX Corporation (37) --
Investment in Aegis Research Corporation (10) --
Dividends from MASI U.K. -- 286
Proceeds from notes receivable -- 250
Dividends from GSE Preferred Stock -- 75
----------- -----------
Net cash used in investing activities of
continuing operations (71,177) (1,219)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of not-to-compete financings (1,000) --
Proceeds from exercise of stock options 160 268
Proceeds from common stock issuance--net
of offering expenses -- 110,157
Net decrease in borrowings under lines of
credit -- (32,300)
Repayment of subordinated debt -- (8,000)
Repayment of term loan -- (5,908)
----------- -----------
Net cash (used in) provided by financing
activities of continuing operations (840) 64,217
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS (11) (135)
NET CASH PROVIDED BY (USED IN) DISCONTINUED
OPERATIONS 2,317 (2,772)
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (60,683) 58,014
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 81,096 26,902
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $20,413 $84,916
=========== ===========
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
June 30, December 31,
2003 2002
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $20,413 $81,096
Cash in escrow 1,485 --
Receivables--net 151,740 133,122
Prepaid expenses and other 10,992 8,955
Assets held for sale 819 6,738
----------- ------------
Total current assets 185,449 229,911
Property and equipment--net 11,258 9,131
Goodwill 146,233 94,003
Other intangibles 17,942 10,231
Investments 10,306 7,631
Employee supplemental savings plan assets 8,461 8,068
Other assets 5,906 5,413
----------- ------------
TOTAL ASSETS $385,555 $364,388
----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of debt $76 $1,000
Accounts payable and accrued expenses 36,082 32,905
Accrued salaries and related expenses 24,822 23,619
Deferred income taxes 10,146 11,888
Billings in excess of revenue earned 5,138 2,700
Liabilities held for sale 643 5,099
----------- ------------
Total current liabilities 76,907 77,211
Debt--net of current portion 25,223 25,000
Accrued retirement 9,958 9,555
Other long-term liabilities 5,444 1,838
Deferred income taxes 5,390 4,744
Minority interest 45 42
----------- ------------
TOTAL LIABILITIES 122,967 118,390
----------- ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, Class A 164 163
Common stock, Class B 156 156
Additional paid in capital 207,956 206,861
Retained earnings 56,682 40,843
Accumulated other comprehensive loss (1,827) (2,025)
Unearned ESOP shares (543) --
Deferred compensation 640 640
Shares held in grantor trust (640) (640)
----------- ------------
TOTAL STOCKHOLDERS' EQUITY 262,588 245,998
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $385,555 $364,388
----------- ------------
MANTECH INTERNATIONAL CORPORATION
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,
AND AMORTIZATION (EBITDA)
(Dollars in Thousands)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net Income 8,877 4,862 15,839 9,435
Loss from
Discontinued
Plus: Operations - 795 - 795
----------- ----------- ----------- -----------
Income from Continuing
Operations 8,877 5,657 15,839 10,230
Interest Expense
Plus: (Income) 687 (14) 1,021 203
Income Taxes 6,075 3,896 10,823 7,004
Depreciation and
Amortization 1,695 885 3,107 1,749
Other (Income)
Expense (352) (225) 270 (522)
Minority Interest 2 1 3 3
----------- ----------- ----------- -----------
EBITDA 16,984 10,200 31,063 18,667
----------- ----------- ----------- -----------
EBITDA ROS% 9.6% 8.6% 9.6% 8.2%
NOTE: EBITDA is defined as net income plus the loss from
discontinued operations, interest expense, income taxes, depreciation
and amortization, other expense, minority interest, and minus interest
income and other income.
EBITDA as calculated by us may be calculated differently than
EBITDA for other companies. We have provided EBITDA because we believe
it is a commonly used measure of financial performance in comparable
companies and is provided to help investors evaluate companies on a
consistent basis, as well as to enhance an understanding of our
operating results. EBITDA should not be construed as either an
alternative to net income as an indicator of our operating performance
or as an alternative to cash flows as a measure of liquidity.
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