- Revenue: $638 million
- EBITDA Margin: 11.4%
- Diluted EPS: $0.93, up 27% from the third quarter of 2020
- modificated Diluted EPS: $1.01, up 22% from the third quarter of 2020
- Cash Flow from Operations: $139 million (3.6 times Net Income)
- Bookings of $716 million resulting in a book-to-bill ratio of 1.1
- Gryphon Technologies acquisition expands digital and systems engineering capabilities across the Department of Defense
HERNDON, Va., Nov. 02, 2021 (GLOBE NEWSWIRE) — ManTech International Corporation (Nasdaq: MANT), a leading provider of inventive technologies and solutions for mission-basic national security programs, today announced financial results for the third quarter of fiscal year 2021, which ended September 30, 2021.
“In the third quarter, we delivered strong profitability and strong cash flow. However, we experienced revenue growth below expectations during the quarter as we continue to navigate a complicate industry operating ecosystem over the near term. The basic drivers for our long-term growth keep popular and we are focused on leveraging our differentiated portfolio and capabilities to transform on our pipeline. We are pleased to deploy capital to create shareholder value. The acquisition of Gryphon Technologies further strengthens our long-term competitive position, adding differentiated digital and systems engineering capabilities across the Department of Defense,” said ManTech Chairman, Chief Executive Officer and President Kevin M. Phillips.
Summary Operating Results
|Three months ended
|(In Millions Except Per proportion Amounts)||2021||2020|
|Non-GAAP Financial Measures*|
|modificated Net Income||$41.3||$33.6|
|modificated Diluted EPS||$1.01||$0.83|
*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.”
Revenue was $638 million, flat compared to the third quarter of 2020.
Operating income was $53.3 million for the quarter, up 35% from the third quarter of 2020. Net income was $38.0 million and diluted earnings per proportion (“EPS”) was $0.93, up 28% and 27% from the third quarter of 2020, respectively.
EBITDA was $72.8 million for the quarter, up 27% from the third quarter of 2020, representing an EBITDA margin of 11.4% for the quarter. modificated net income was $41.3 million and modificated diluted EPS was $1.01, up 23% and 22% from the third quarter of 2020, respectively.
Cash Management and Capital Deployment
For the quarter, cash from operations totaled $139 million. Days sales noticeable (DSO) were 55 days, an increase of 1 day compared to the third quarter of 2020.
During the quarter, the Company paid $15.5 million, or $0.38 per proportion, as part of its regular cash dividend program to its shared stockholders of record as of September 10, 2021. As of September 30, 2021, the Company had $145.4 million in cash and cash equivalents and no noticeable borrowings under its revolving-credit facility and delayed draw term loan facility. The Company has abundant financial capacity to continue funding organic investments, pursue growth-oriented acquisitions and issue dividends while maintaining a strong balance sheet.
The Board of Directors has declared a quarterly dividend of $0.38 to be paid December 17, 2021, to all shared stockholders of record as of December 3, 2021, as part of the Company’s regular quarterly cash dividend program. Future declarations of dividends and their record and payment dates are unprotected to the final determination of ManTech’s Board of Directors.
Contract awards (bookings) totaled $716 million in the quarter, representing a book-to-bill ratio of 1.1. ManTech’s notable single-award contracts in the quarter include:
- Systems Engineering and Integration for the U.S. Space Force. ManTech was awarded a 10-year contract totaling $476 million to continue its sustain for a wide range of mission basic space set afloat programs with set afloat service integration, fleet surveillance and certification for space and missile systems.
- Naval Submarine and Surface identifying characteristics Silencing Programs for the Navy. ManTech was awarded a 5-year contract totaling $51 million to continue providing engineering sets, data collection, reduction, examination and reporting for submarine and surface ship acoustical trials.
The Company also received a number of additional contract awards in the quarter including several extensions to existing contracts and new contracts from various customers.
The Company’s backlog of business at quarter end was $10.1 billion including $1.3 billion of funded backlog.
The Company is adjusting the range of its 2021 guidance for revenue, modificated net income and modificated diluted earnings per proportion as stated in the table below.
|Measure||Fiscal 2021 Guidance|
|Revenue (million)||$2,550 – $2,575|
|modificated Net Income* (million)||$150.2 – $152.2|
|modificated Diluted EPS*||$3.66 – $3.71|
*Information about ManTech’s use of non-GAAP financial measures is provided under “Non-GAAP Financial Measures”
modificated net income and modificated diluted EPS exclude amortization of acquired intangibles and the related tax impact. The Company does not provide a reconciliation of forward-looking modificated net income and modificated 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 meaningful effect on future GAAP results.
ManTech Chief Financial Officer Judith L. Bjornaas said, “Our continued execution has led to strong profitability that is reflected in our revised guidance for the remainder of the year. Despite our changes to revenue guidance, we keep optimistic about ManTech’s opportunity to excursion long-term growth. We are also pleased with our ability to deploy capital and keep focused on employing our balance sheet to further strengthen our portfolio strategically.”
ManTech executive management will keep up a conference call on November 2, 2021, 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 4774879. The conference call will be webcast simultaneously to the public by a link on the Investor Relations section of the ManTech website (http://investor.mantech.com). A replay of the conference call will be obtainable 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 sets for U.S. defense, intelligence community and federal civilian agencies. In business more than 50 years, we excel in complete-spectrum cyber, data collection & analytics, enterprise IT, systems and software engineering solutions that sustain national and homeland security. Additional information about ManTech can be found at www.mantech.com.
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 include risks and uncertainties, many of which are outside of our control. Words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” or “calculate,” or the negative of these terms or words of similar import, are intended to clarify forward-looking statements.
These forward-looking statements are inherently unprotected 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 continue 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; negative changes in U.S. government spending for programs we sustain, whether due to changing mission priorities, failure to pass fiscal year budget or enact stopgap spending measures by Continuing Resolutions, failure to increase or suspend U.S. debt ceiling, socio-economic policies or federal budget constraints generally; disruptions to our business or damage to our reputation resulting from cyberattacks and other security threats; disruptions to our business resulting from the COVID-19 pandemic or other similar global health epidemics, pandemics and/or other disease outbreaks, including the requirement for vaccination of our workforce; inability to recruit and retain a sufficient number of employees with specialized skill sets or necessary security clearances who are in great need and limited supply; failure to compete effectively for awards procured by the competitive bidding course of action, and the negative impact of delays resulting from our competitors’ protest of new contracts that are awarded to us; failure to acquire option awards, task orders or funding under contracts; the government renegotiating, modifying or terminating our contracts; failure to comply with, or negative change in, complicate U.S. government laws and procurement regulations; negative 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; negative changes in business conditions that may cause our investments in recorded goodwill to become impaired; and failure to mitigate risk associated with conducting business internationally. These and other risk factors are more fully discussed in the section entitled “Risk Factors” in ManTech’s Annual Report on Form 10-K before filed with the Securities and Exchange Commission on Feb. 19, 2021, Item 1A of Part II of our Quarterly Reports on Form 10-Q, and, now and then, 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 consequence of new information, later events or circumstances, changes in expectations or otherwise.
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except proportion and Per proportion Amounts)
|Cash and cash equivalents||$||145,414||$||41,193|
|Other current assets||8,339||6,354|
|Total Current Assets||591,746||496,379|
|Other intangible assets—net||182,234||202,231|
|character and equipment—net||127,042||121,296|
|Operating lease right of use assets||79,266||94,825|
|Employee supplemental savings plan assets||40,996||37,848|
|limitations AND STOCKHOLDERS’ EQUITY|
|Accrued salaries and related expenses||121,767||123,953|
|Operating lease obligations—current||31,291||30,105|
|Accrued expenses and other current limitations||8,924||15,177|
|Total Current limitations||360,811||348,813|
|Deferred income taxes||152,586||141,638|
|Operating lease obligations—long term||67,306||80,242|
|Other long-term limitations||12,215||12,249|
|COMMITMENTS AND CONTINGENCIES|
|shared stock, Class A—$0.01 par value; 150,000,000 shares empowered; 27,803,379 and 27,538,474 shares issued at September 30, 2021 and December 31, 2020; 27,559,266 and 27,294,361 shares noticeable at September 30, 2021 and December 31, 2020||278||275|
|shared stock, Class B—$0.01 par value; 50,000,000 shares empowered; 13,176,695 and 13,176,695 shares issued and noticeable at September 30, 2021 and December 31, 2020||132||132|
|Additional paid-in capital||562,159||545,717|
|Treasury stock, 244,113 and 244,113 shares at cost at September 30, 2021 and December 31, 2020||(9,158||)||(9,158||)|
|Accumulated other comprehensive loss||(252||)||(230||)|
|TOTAL STOCKHOLDERS’ EQUITY||1,656,402||1,579,412|
|TOTAL limitations AND STOCKHOLDERS’ EQUITY||$||2,284,161||$||2,213,664|
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per proportion Amounts)
Three months ended
Nine months ended
|Cost of sets||536,205||538,000||1,631,790||1,597,764|
|General and administrative expenses||48,343||58,855||143,477||164,011|
|Other (expense), net||(92||)||(29||)||(225||)||(51||)|
|INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS||52,611||39,042||142,920||116,404|
|Provision for income taxes||(14,655||)||(9,303||)||(36,026||)||(28,037||)|
|Equity in losses of unconsolidated subsidiaries||—||—||(1||)||(1||)|
|BASIC EARNINGS PER proportion:|
|Class A shared stock||$||0.93||$||0.74||$||2.63||$||2.19|
|Class B shared stock||$||0.93||$||0.74||$||2.63||$||2.19|
|DILUTED EARNINGS PER proportion:|
|Class A shared stock||$||0.93||$||0.73||$||2.61||$||2.18|
|Class B shared stock||$||0.93||$||0.73||$||2.61||$||2.18|
MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended
|CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:|
|Adjustments to reconcile net income to net cash flow from (used in) operating activities:|
|Depreciation and amortization||57,438||51,281|
|Noncash lease expense||27,002||20,738|
|Stock-based compensation expense||11,516||8,533|
|Deferred income taxes||10,948||11,127|
|Change in allowance for bad debts||(3,499||)||5,244|
|Contract loss save||—||(372||)|
|Change in assets and limitations—net of effects from acquired businesses:|
|Other current assets||1,180||(1,333||)|
|Employee supplemental savings plan asset||(3,375||)||(2,042||)|
|Other long-term assets||(3,775||)||(1,939||)|
|Operating lease obligations||(26,465||)||(22,102||)|
|Accrued expenses and other current limitations||(6,753||)||(925||)|
|Accrued salaries and related expenses||(2,123||)||29,812|
|Other long-term limitations||—||100|
|Net cash flow from operating activities||205,050||217,133|
|CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:|
|Purchases of character and equipment||(41,199||)||(53,685||)|
|Proceeds from corporate owned life insurance||227||4,137|
|Investment in capitalized software||—||(5,193||)|
|Proceeds from sale of character and equipment||—||869|
|Net cash (used in) investing activities||(40,972||)||(53,872||)|
|CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:|
|Borrowing under credit agreement||207,500||285,500|
|Repayments under credit agreement||(222,500||)||(322,000||)|
|Proceeds from exercise of stock options||8,020||5,918|
|Debt issuance costs||(3,315||)||—|
|Payment consideration to tax authority on employees’ behalf||(3,092||)||(1,014||)|
|Principal paid on financing leases||(138||)||(118||)|
|Net cash (used in) financing activities||(59,857||)||(70,403||)|
|NET CHANGE IN CASH AND CASH EQUIVALENTS||104,221||92,858|
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD||41,193||8,854|
|CASH AND CASH EQUIVALENTS, END OF PERIOD||$||145,414||$||101,712|
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, modificated net income and modificated 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 replace 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 chiefly recognized in business combinations in addition as the effect of discrete tax items which we do not believe are indicative of our chief 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, consequently limiting their use for comparability.
The following tables present chosen 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
|Equity in losses (earnings) of unconsolidated subsidiaries||—||—|
|Provision for income taxes||14,655||9,303|
|INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS||$||52,611||$||39,042|
|Other expense (income), net||92||29|
|Depreciation and amortization||19,551||18,127|
modificated net income is calculated by excluding the following items and the related tax impacts from net income: (i) amortization of acquired intangible assets and (ii) discrete tax items.
modificated diluted EPS is calculated by dividing modificated net income by the diluted weighted average number of shares noticeable.
|Three months ended
|(In Thousands Except Per proportion Amounts)||2021||2020|
|Amortization of acquired intangibles||4,667||5,130|
|Adjustments for tax effect||(1,302||)||(1,221||)|
|modificated NET INCOME||$||41,321||$||33,648|
|modificated DILUTED EPS|
|Class A shared stock||$||1.01||$||0.83|
|Class B shared stock||$||1.01||$||0.83|
observe: Figures may not add due to rounding.
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