ManTech Reports Results for the Third Quarter 2004.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. -- ManTech International Corporation (Nasdaq:MANT) --Third quarter revenues increased to $211.3 million, a 16 percent increase over third quarter 2003 --Net income of $7.8 million and 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 (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. of $0.24 in the third quarter --DSS contract ending, company negotiating close-out settlement terms with customer --Generated free cash flow of over $18.9 million for the third quarter as Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). improved by 6 days ManTech International Corporation (Nasdaq: MANT), a leading provider of innovative technologies and solutions focused on mission-critical national security programs for the Intelligence Community, the Department of Defense, the Department of State, the Department of Justice, the Department of Homeland Security Noun 1. Department of Homeland Security - the federal department that administers all matters relating to homeland security Homeland Security executive department - a federal department in the executive branch of the government of the United States and other federal government customers, today announced results for the third quarter of 2004. ManTech International Corporation reported revenue for the quarter ending September September: see month. 30, 2004 of $211.3 million, up from $181.6 million for the same period in 2003, an increase of 16 percent. The results reflect an organic growth rate of over 12 percent from the comparable period in 2003. This revenue growth was primarily attributable to new business supporting national security programs for the Department of Defense and Intelligence Community. While sales continued to improve, the company's profitability for the quarter was impacted by its MSM MSM - Micronetics Standard MUMPS subsidiary as the company worked through closing out its background investigation contract with its customer, the Defense Security Services Security services are state institutions for the provision of intelligence, primarily of a strategic nature, but also including protective security intelligence. Examples include the Security Service (MI5) and the Secret Intelligence Service (MI6) in the United Kingdom, and the (DSS (1) (Digital Signature Standard) A National Security Administration standard for authenticating an electronic message. See RSA and digital signature. (2) (Digital Satellite S ). 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 $13.6 million versus an operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $16.2 million for the same period last year. Results of operations from contracts related to MSM showed a loss of $4.0 million for the third quarter. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the quarter was 6.4 percent compared with 8.9 percent for the same period in 2003. Net income for this quarter was $7.8 million compared to $9.2 last year, and fully diluted EPS were $0.24 for the third quarter of 2004 versus EPS of $0.29 for the third quarter in 2003. MSM - Personnel Security Investigations Business Update At the end of the last quarter, ManTech was notified by the government that the DSS contract was to be brought to a close. As part of this close-out process, ManTech was directed to stop processing additional leads for pending security background investigations on the DSS contract and to return all cases by October October: see month. 31, 2004. ManTech intends to fully comply and is now in negotiations with DSS regarding the final settlement terms and conditions associated with the close-out of this contract and expects this process to conclude this year. "With the difficulties of this contract now behind us, a new President and COO (Cell Of Origin) See mobile positioning. directing operations, and continuing positive trends in our business, we are squarely square·ly adv. 1. Mathematics At right angles: sawed the beam squarely. 2. In a square shape. 3. focused on our goal of reaching $1 billion in revenue and bringing our depth of talent and corporate capabilities to bear on the mission-critical objectives of our customers," said George J. Pedersen, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , ManTech International Corporation. Business Highlights --Total contract awards in the third quarter 2004 of over $225 million, which includes unannounced awards for classified business and follow-on work to existing contracts, but does not include the OPM See Oracle Process Manufacturing. blanket purchase agreement. --Receipt of a $20.9 million contract from the U.S. Air Force to provide network and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. support to Air Force locations in Italy, Turkey and Greece. --Receipt of five-year, $20.5 million engineering and technical services contract to support submarine submarine, naval craft capable of operating for an extended period of time underwater. Submarines are almost always warships, although a few are used for scientific or business purposes (see also submersible). and surface ship acoustical a·cous·tic adj. also a·cous·ti·cal 1. Of or relating to sound, the sense of hearing, or the science of sound. 2. a. Designed to carry sound or to aid in hearing. b. trials for the Navy. --Selected as part of the winning team for the Army Strategic Command Space Missile Defense Missile defence is an air defence system, weapon program, or technology involved in the detection, tracking, interception and destruction of attacking missiles. Originally conceived as a defence against nuclear-armed ICBMs, its application has broadened to include shorter-ranged Initiatives Support II contract. --Award of a four-year, multiple-award, blanket purchase agreement from the Office of Personnel Management for background investigations support. --Announcement of Robert A. Coleman as ManTech President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . "This was a solid quarter and we are seeing strong demand from our Intelligence Community and DOD (1) (Dial On Demand) A feature that allows a device to automatically dial a telephone number. For example, an ISDN router with dial on demand will automatically dial up the ISP when it senses IP traffic destined for the Internet. customers for the advanced information technology solutions that we provide," said Robert A. Coleman, President and Chief Operating Officer, ManTech International Corporation. "More and more of our customers are seeking comprehensive, advanced technology solutions, and with our broad range of capabilities and extensive domain knowledge, we are well-positioned to meet those needs." The following table provides details of ManTech's consolidated operating performance as well as separate information for MSM and the other operations' business activity.
For the third quarter 2004: (In millions)
Consolidated ManTech's Other
ManTech MSM Operations
---------------------------- ------------- ---------- ----------------
Revenue $211.3 $3.8 $207.4
---------------------------- ------------- ---------- ----------------
Income from operations $13.6 ($4.0) $17.6
---------------------------- ------------- ---------- ----------------
Operating margin 6.4% 8.5%
---------------------------- ------------- ---------- ----------------
Net income $7.8 ($2.4) $10.2
---------------------------- ------------- ---------- ----------------
Key Performance Metrics Performance metrics are measures of an organizations activities and performance. Performance metrics should support a range of stakeholder needs from customers, shareholders to employees [1]. Reported total 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. as of September 30, 2004 was $1.5 billion and funded backlog increased to $466 million from $411 million at the end of third quarter of 2003. ManTech derived approximately 86 percent of its revenue during the third quarter of 2004 from prime contracts and approximately 45 percent of its revenue from work under 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 contracts. Revenue from the Department of Defense and the Intelligence Community accounted for 91 percent of revenue for the third quarter of 2004. ManTech's time and materials labor and materials (time and materials) n. what some builders or repair people contract to provide and be paid for, rather than a fixed price or a percentage of the costs. contracts accounted for 61 percent of revenue, while fixed-price contracts accounted for 11 percent of revenue and cost-plus contracts Cost-plus contract A contract in which the selling price is based on the total cost of production plus a fixed percentage or fixed amount. accounted for 28 percent of revenue. Revenue derived from secure systems and information technology solutions continued at 85 percent of revenue in the third quarter of 2004, the same as in the third quarter of 2003. Company Guidance ManTech's guidance for the third quarter and full year 2004 reflects the continuation of strong underlying trends in its national security business. The guidance also includes the expectation of improvements in its MSM business, but does not include any future acquisitions or divestitures.
Fourth Quarter 2004 Full Year 2004
----------------------------------- ------------------- --------------
$222 million - $835 million -
Revenue $237 million $850 million
----------------------------------- ------------------- --------------
Diluted Earnings Per Share $0.32 - $0.38 $0.75 - $0.81
----------------------------------- ------------------- --------------
Weighted Average Common Shares
Outstanding 32.7 million 32.6 million
----------------------------------- ------------------- --------------
Conference Call: ManTech executive management will hold a conference call today at 5 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. , to discuss third quarter 2004 results and answer questions. Interested parties may access the call by dialing (800) 289-0494 (domestic) or (913) 981-5520 (international). The conference call will be Webcast (listen only) simultaneously 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 of the call. A replay of the call will be available beginning at 9 p.m. today and will remain available through midnight, November 10. To access the replay, call (888) 203-1112 (domestic) or (719) 457-0820 (international). The confirmation code for the replay is 802298. 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 is a leading provider of innovative technologies and solutions for mission-critical national security programs for the Department of Defense, the Intelligence Community, the Department of State, the Department of Justice, the Department of Homeland Security and other U.S. federal government customers. The company's expertise includes software development, enterprise security architecture, information assurance, 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, support, network and critical infrastructure protection Department of Defense (DOD) program to identify and protect assets critical to the Defense Transportation System. Loss of a critical asset would result in failure to support the mission of a combatant commander. , 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 (1) From "cybernetics," it is a prefix attached to everyday words to add a computer, electronic or online connotation. The term is similar to "virtual," but the latter is used more frequently. See virtual. security to protect U.S. embassies all over the world; has developed a secure, collaborative communications system In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. for the U.S. Department of Homeland Security; and is helping the Department of Justice's U.S. Marshall Service deploy a common, office automation system. With revenues in excess of $800 million for the past twelve months and more than 5,500 highly qualified employees and several thousand consultants, the company operates 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 more than 30 countries worldwide. ManTech was selected by Business Week magazine as one of the Top 100 Hot Growth Companies for 2004. Also this year, VARBusiness magazine ranked ManTech as one of its Top 50 Fastest-Growing Solution Providers. 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, could be interpreted to be "forward-looking" statements that ManTech believes to be within the definition in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. 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 indicated by such forward-looking statement 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. include, but are not limited to: adverse changes in U.S. government spending Government spending or government expenditure consists of government purchases, which can be financed by seigniorage, taxes, or government borrowing. It is considered to be one of the major components of gross domestic product. priorities; failure to retain existing U.S. government contracts or win new contracts; risks of adverse consequences resulting from contract negotiations on existing U.S. government contracts; adverse results of U.S. government audits of our government contracts; risks of contract performance or termination; incorrect estimations of the value of our indefinite-delivery, indefinite-quantity contracts, blanket purchase agreements or other indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those value contracts; the failure of the U.S. government to award task orders to ManTech, allot al·lot tr.v. al·lot·ted, al·lot·ting, al·lots 1. To parcel out; distribute or apportion: allotting land to homesteaders; allot blame. 2. funds to complete performance of task orders awarded to ManTech, or exercise schedule options; additional costs or adverse results associated with complying with new laws New Laws: see Las Casas, Bartolomé de. and regulations relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc corporate government issues or new rules promulgated prom·ul·gate tr.v. prom·ul·gat·ed, prom·ul·gat·ing, prom·ul·gates 1. To make known (a decree, for example) by public declaration; announce officially. See Synonyms at announce. 2. by the SEC; government contract procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. (such as bid protest) laws and regulations; competitive factors such as pricing pressures and/or competition to hire and retain employees; failure to successfully integrate recent acquired companies or business into our operations or to realize any accretive or synergistic effects Synergistic effect A violation of value-additivity in that the value of a combination is greater than the sum of the individual values. ; and failure to identify, execute of effectively integrate future acquisitions. For a discussion of these and other risks and uncertainties, please refer to the section titled "Risks Related to The Company's Business" in ManTech's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission on March 15, 2004, and, from time to time, in ManTech's other filings with the Securities and Exchange Commission, including, among others, its reports on Form 10-Q Form 10-Q See 10-Q. and Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. . 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or , changes in expectations or otherwise.
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited) (unaudited)
Three months ended Nine months ended
September 30, September 30,
--------------------------- --------------------------
2004 2003 2004 2003
------------- ------------- ------------- ------------
REVENUES $ 211,260 $ 181,590 $ 612,611 $ 506,789
COST OF
SERVICES 176,381 147,461 524,775 411,593
------------- ------------- ------------- ------------
GROSS PROFIT 34,879 34,129 87,836 95,196
------------- ------------- ------------- ------------
COSTS AND
EXPENSES:
General and
administrative 20,452 16,723 59,557 47,657
Depreciation
and
amortization 845 1,181 3,570 3,358
------------- ------------- ------------- ------------
Total costs
and expenses 21,297 17,904 63,127 51,015
------------- ------------- ------------- ------------
INCOME FROM
OPERATIONS 13,582 16,225 24,709 44,181
Interest income
(expense), net (523) (618) (1,661) (1,639)
Other income
(expense) 162 (58) 605 (328)
------------- ------------- ------------- ------------
INCOME BEFORE
INCOME TAXES
AND MINORITY
INTEREST 13,221 15,549 23,653 42,214
Income taxes (5,405) (6,321) (9,685) (17,144)
Minority
interest (2) (1) (5) (4)
------------- ------------- ------------- ------------
NET INCOME $ 7,814 $ 9,227 $ 13,963 $ 25,066
============= ============= ============= ============
BASIC EARNINGS
PER SHARE
Net income $ 0.24 $ 0.29 $ 0.43 $ 0.78
------------- ------------- ------------- ------------
Weighted
average common
shares
outstanding 32,388,777 32,007,957 32,269,784 31,955,522
============= ============= ============= ============
DILUTED
EARNINGS PER
SHARE
Net income $ 0.24 $ 0.29 $ 0.43 $ 0.78
------------- ------------- ------------- ------------
Weighted
average common
shares
outstanding 32,388,777 32,335,226 32,436,648 32,094,136
============= ============= ============= ============
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(unaudited)
September December
30, 31,
2004 2003
-----------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 17,030 $ 9,166
Cash in escrow - 829
Receivables--net 212,327 204,539
Prepaid expenses and other 10,944 17,527
Assets held for sale 1,289 1,332
------------ ----------
Total current assets 241,590 233,393
Property and equipment--net 12,421 10,920
Goodwill 155,160 149,548
Other intangibles--net 21,157 15,741
Investments 5,646 5,560
Employee supplemental savings plan assets 11,818 10,594
Other assets 11,184 10,378
------------ ----------
TOTAL ASSETS $ 458,976 $436,134
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of debt $ 79 $ 77
Accounts payable and accrued expenses 55,531 45,157
Accrued salaries and related expenses 29,364 30,548
Deferred income taxes--current 10,438 20,092
Billings in excess of revenue earned 8,682 4,514
Liabilities of operations held for sale 902 1,164
------------ ----------
Total current liabilities 104,996 101,552
Debt--net of current portion 25,000 25,184
Accrued retirement 13,246 11,914
Other long-term liabilities 5,291 5,178
Deferred income taxes--noncurrent 4,708 4,553
Minority interest 54 49
------------ ----------
TOTAL LIABILITIES 153,295 148,430
------------ ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, Class A -- $0.01 par value:
150,000,000 shares authorized;
17,318,949 and 17,047,820 shares issued
and outstanding at September 30, 2004
and December 31, 2003, respectively 173 170
Common stock, Class B -- $0.01 par value:
50,000,000 shares authorized; 15,075,293
and 15,075,293 shares issued and
outstanding at September 30, 2004 and
December 31, 2003, respectively 151 151
Additional paid in capital 217,263 212,564
Retained earnings 89,966 76,003
Accumulated other comprehensive loss (469) (1,184)
Unearned ESOP shares (1,403) --
Deferred compensation 640 640
Shares held in grantor trust (640) (640)
------------ ----------
TOTAL STOCKHOLDERS' EQUITY 305,681 287,704
------------ ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 458,976 $436,134
============ ==========
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(unaudited)
Nine months ended September 30,
--------------------------------
2004 2003
--------------- ----------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 13,963 $ 25,066
Adjustments to reconcile net
income to net cash used in
operating activities:
Equity in (earnings) losses of
affiliates (419) 844
(Decrease) increase in current
and deferred income taxes (9,499) 4,872
Depreciation and amortization 4,979 4,962
Changes in assets and liabilities-net
of effects from acquired and
discontinued businesses:
Contract receivables (7,789) (28,132)
Prepaid expenses and other 6,583 (5,963)
Accounts payable and accrued
expenses 10,374 4,682
Accrued salaries and related
expenses (1,184) (1,656)
Billings in excess of revenue
earned 4,168 2,549
Accrued Retirement 1,332 1,348
Other (2,794) 86
--------------- ----------------
Net cash flows from operating
activities 19,714 8,658
--------------- ----------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property and equipment (4,067) (2,826)
Proceeds from sales of property and
equipment 1 1
Investment in capitalized software
products (120) (1,488)
Acquisition of businesses, net of
cash acquired of $2,840 in 2003 (10,969) (68,539)
Dividends from MASI U.K. 357 315
--------------- ----------------
Net cash flows from investing
activities (14,798) (72,537)
--------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of not-to-compete
financings - (1,000)
Proceeds from exercise of stock
options 3,245 916
Net (decrease) in borrowings
under lines of credit (182) -
--------------- ----------------
Net cash flows from financing
activities 3,063 (84)
--------------- ----------------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (20) (5)
--------------- ----------------
NET CASH FLOWS FROM DISCONTINUED
OPERATIONS (95) 2,682
--------------- ----------------
NET (DECREASE) IN CASH AND CASH
EQUIVALENTS 7,864 (61,286)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 9,166 81,096
--------------- ----------------
CASH AND CASH EQUIVALENTS, END
OF PERIOD $ 17,030 $ 19,810
=============== ================
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes $ 14,168 $ 12,032
=============== ================
Cash paid for interest $ 1,924 $ 1,852
=============== ================
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