February 22, 2017

ManTech Announces Financial Results for Fourth Quarter and Fiscal Year 2016

  • Revenues: $394 million for the fourth quarter, $1.60 billion for the fiscal year
  • Operating Margin: 5.4% for the fourth quarter, 5.7% for the fiscal year
  • Diluted EPS: $0.35 for the fourth quarter, $1.47 for the fiscal year
  • Book-to-Bill Ratio: 1.2 for the fourth quarter, 1.4 for the fiscal year
  • Cash Flow from Operations: $13 million for the fourth quarter, $96 million for the fiscal year (1.7 times Net Income)

FAIRFAX, Va., Feb. 22, 2017 (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 fourth quarter and full fiscal year 2016, which ended December 31, 2016.

ManTech Chairman and Chief Executive Officer George J. Pedersen said, "We remain optimistic about the budgetary environment and the prospects for continued growth. In 2016, ManTech experienced strong contract awards, revenue growth and excellent cash flow. Furthermore, the company showed year-over-year improvement on numerous metrics including growth in operating income, net income and EPS, as well as improvement in the respective margins. We also made two targeted acquisitions in the growing markets of cyber and health IT; Oceans Edge Cyber and Edaptive Systems, which enhanced our capabilities and positioning within U.S. Cyber Command and the Centers for Medicare and Medicaid Services, respectively. Together with the strong management team, dedicated and talented employees, our differentiated capabilities and the investments made over the past few years, ManTech is well positioned for success in 2017."

Summary Operating Results

Revenues for the quarter were $394.2 million, compared to $402.4 million in the fourth quarter of 2015. Revenues for the year were $1.60 billion, up 3% compared to $1.55 billion in fiscal year 2015.

Operating income was $21.3 million for the quarter and $91.0 million for the full year. Operating margin was 5.4% for the quarter and 5.7% for the full year. Net income was $13.7 million for the quarter and $56.4 million for the fiscal year. Diluted earnings per share was $0.35 for the quarter and $1.47 for the full year. All annual profit figures were significantly higher than comparable figures for 2015.

Cash Management and Capital Deployment

Cash flow from operations for the quarter was $13 million. For the year, cash flow from operations totaled $96 million or 1.7 times net income. Days sales outstanding (DSO) were 73 days, an increase of 5 days compared to the fourth quarter of 2015.

During the quarter, the company paid $8.1 million, or $0.21 per share, as part of its regular cash dividend program to its common stockholders of record as of December 9, 2016. As of December 31, 2016, the company had $65 million in cash and cash equivalents and no outstanding borrowings on its $500 million revolving-credit facility, which provides the company with the financial capacity to pursue acquisitions, issue dividends, and maintain a strong balance sheet.

The Board of Directors has declared that the company will pay a cash dividend of $0.21 per share on March 24, 2017, to all common stockholders of record as of March 10, 2017, as part of its regular quarterly cash dividend program. The annual yield is approximately 2.1% based on the average of recent trading prices. Future declarations of dividends and their record and payment dates are subject to the final determination of ManTech's Board of Directors.

Contract Awards

Kevin M. Phillips, ManTech President and Chief Operating Officer said, "I am pleased with our differentiated capabilities and strong market position which has enabled us to continue winning new business. The work won in 2016 weighed towards cyber, IT solutions and intelligence and systems engineering support. These recent contract awards provide the solid foundation for growth in 2017."

Contract awards (bookings) totaled $460 million in the quarter, representing a book-to-bill ratio of 1.2. For the year, contract awards totaled $2.3 billion for a book-to-bill ratio of 1.4. Book-to-bill ratios for both the quarter and the fiscal year reflect an improving awards environment and strong market positioning for ManTech. Proposal activity remains brisk, and the company expects contract awards to continue at a strong pace in 2017. Large, single award contracts contributing to the quarterly bookings include:

  • Worldwide Field Software Support for the Army Communications-Electronics Command (CECOM) Software Engineering Center (SEC). Under a 3 year contract valued up to $152 million, ManTech is supporting the U.S. Army by ensuring operational readiness by developing, providing and integrating and maintaining C4ISR, logistics and business software.
  • Combat Weapons Systems Support for the Naval Surface Warfare Center Dahlgren Division. Under a 5 year contract valued at up to $87 million, ManTech is continuing its support of the U.S. Navy by providing test and evaluation support to its weapons and combat systems to include Aegis, Aegis BMD, SSDS, DDG-1000 and littoral combat ship platforms.

Additional contract awards in the quarter include several extensions to existing contracts and new contracts from classified customers.

Forward Guidance

The company expects to achieve revenue, net income, and diluted earnings per share in 2017 as specified in the table below.

Measure   Fiscal 2017 Guidance  
Revenue (billion)$1.625B - $1.700B
Net Income (million)$55.5M - $59.0M
   Diluted Earnings per Share  $1.42 - $1.51

The guidance is supported by a backlog of business at the end of the quarter of $4.9 billion, including $1.0 billion of funded backlog, as well as a strong pipeline of new opportunities and improving government funding levels.

ManTech Chief Financial Officer Judith L. Bjornaas said, "We are pleased to end the fiscal year with strong operating performance, having generated improved margins and strong cash flow. Our capital deployment program will continue to be focused on a disciplined acquisition program that will support long-term business growth and we expect to maintain our current regular cash dividend program. In 2017, we will continue to position and align the business to capture additional market share."

Conference Call

ManTech executive management will hold a conference call on February 22, 2017, 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 44415141. 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 innovative technologies and solutions for mission-critical national security programs for the intelligence community; the departments of Defense, State, Homeland Security, Health and Human Services, Veteran Affairs and Justice, including the Federal Bureau of Investigation (FBI); the health and space community; and other U.S. government customers. We support important national missions by providing services to approximately 50 federal government agencies under approximately 1,000 current contracts. ManTech's expertise includes cybersecurity; software and systems development; enterprise information technology; multi-discipline intelligence; program protection and mission assurance; systems engineering; test and evaluation (T&E); command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR); training; supply chain management and logistics; and management consulting. 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, 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 failure to compete effectively for new contract awards or to retain existing U.S. government contracts; issues relating to competing effectively for awards procured through the competitive bidding process, including the adverse impact of delay caused by competitors' protests of contracts awards received by us; inability to recruit and retain sufficient number of employees with specialized skill sets 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 that reduce the contracts that we may bid on, cost reduction and efficiency initiatives by our customers, or other federal budget constraints generally; failure to obtain option awards, task orders or funding under contracts; increased exposure to risks associated with conducting business internationally; failure to realize the full amount of our backlog or adverse changes in the timing of receipt of revenues under contracts included in backlog; renegotiation, modification or termination of our contracts, or failure to perform in conformity with contract terms or our expectations; disruption of our business or damage to our reputation resulting from security breaches in customer systems, internal systems or services failures (including as a result of cyber or other security threats), or employee or subcontractor misconduct; failure to successfully integrate acquired companies or businesses into our operations or to realize any accretive or synergistic effects from such acquisitions; adverse changes in business conditions that may cause our investments in recorded goodwill to become impaired; 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, 2017, 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.

(In Thousands Except Share and Per Share Amounts)
 December 31,
 2016 2015
Cash and cash equivalents$64,936  $41,314 
Receivables—net320,677  304,253 
Prepaid expenses and other34,423  23,605 
Contractual inventory1,277   
Total Current Assets421,313  369,172 
Goodwill955,874  919,591 
Other intangible assets—net154,931  154,176 
Employee supplemental savings plan assets29,383  27,557 
Property and equipment—net23,121  22,439 
Investments11,691  10,853 
Other assets2,151  2,636 
TOTAL ASSETS$1,598,464  $1,506,424 
Accounts payable and accrued expenses$108,888  $106,271 
Accrued salaries and related expenses70,768  60,940 
Billings in excess of revenue earned11,998  12,685 
Total Current Liabilities191,654  179,896 
Deferred income taxes—non-current122,081  102,035 
Accrued retirement30,581  29,877 
Other long-term liabilities12,481  10,879 
TOTAL LIABILITIES356,797  322,687 
Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 25,795,973 and 24,731,584 shares issued at December 31, 2016 and 2015; 25,551,860 and 24,487,471 shares outstanding at December 31, 2016 and 2015  258  247 
Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 13,190,745 and 13,191,845 shares issued and outstanding at December 31, 2016 and 2015132  132 
Additional paid-in capital471,906  438,168 
Treasury stock, 244,113 and 244,113 shares at cost at December 31, 2016 and 2015(9,158) (9,158)
Retained earnings778,710  754,457 
Accumulated other comprehensive loss(181 ) (109)
TOTAL STOCKHOLDERS' EQUITY1,241,667  1,183,737 

(In Thousands Except Per Share Amounts)
 (unaudited) (unaudited)
 Three months ended
December 31,
 Year Ended
December 31,
 2016 2015 2016 2015
REVENUES$  394,178  $  402,401  $ 1,601,596  $ 1,550,117 
Cost of services338,456  345,314  1,369,775  1,320,697 
General and administrative expenses34,418  34,279  140,858  144,534 
OPERATING INCOME21,304  22,808  90,963  84,886 
Interest expense(239) (160) (1,097) (1,193)
Interest income22   25  121  160 
Other income (expense), net(62) (48) 83  1,501 
Provision for income taxes(7,346)  (8,884) (33,786) (34,366)
Equity in gains of unconsolidated subsidiaries50  150   107  139 
NET INCOME$13,729  $13,891  $56,391  $51,127 
Class A common stock$0.36  $0.37  $ 1.48  $1.36 
Class B common stock$0.36  $0.37  $1.48  $1.36 
Class A common stock$0.35  $0.37  $1.47  $1.36 
Class B common stock$0.35  $0.37  $1.47  $1.36 

(In Thousands)
 Year Ended
December 31,
 2016 2015
Net income$  56,391  $  51,127 
Adjustments to reconcile net income to net cash provided by operating activities:     
Deferred income taxes18,254  30,553 
Depreciation and amortization30,191  30,276 
Stock-based compensation3,323  4,379 
Excess tax benefits from the exercise of stock options(1,656) (73)
Equity in gains of unconsolidated subsidiaries(107) (139)
Gain on sale and retirement of property and equipment(12) (656)
Gain on disposition of business  (1,692)
Change in assets and liabilities—net of effects from acquired businesses:   
Receivables-net(5,611) 82,727 
Prepaid expenses and other(10,641) (4,990)
Contractual inventory(1,277)  
Employee supplemental savings plan asset(1,826) 4,184 
Accounts payable and accrued expenses(162) (44,103)
Accrued salaries and related expenses6,926  2,703 
Billings in excess of revenue earned(687) 913 
Accrued retirement704  (2,927)
Other1,954  1,601 
Net cash flow from operating activities95,764  153,883 
Acquisition of businesses-net of cash acquired(60,556) (101,556)
Purchases of property and equipment(7,662) (5,202)
Investment in capitalized software for internal use(2,748) (1,025)
Payments to acquire investments(1,183) (4,500)
Proceeds from sale of property and equipment17  696 
Transaction costs for disposition of business  (1,174)
Proceeds from sale of investment  13 
Net cash flow from investing activities(72,132) (112,748)
Dividends paid(32,139) (31,543)
Proceeds from exercise of stock options30,562  7,868 
Excess tax benefits from the exercise of stock options1,656  73 
Debt issuance costs(89)  
Borrowings under revolving credit facility  163,200 
Repayments under revolving credit facility  (163,200)
Net cash flow from financing activities(10) (23,602)


ManTech International Corporation

Investor Relations

Judy Bjornaas

Executive Vice President and Chief Financial Officer

(703) 218-8269



Sue Cushing

VP Corporate Communications

(703) 814-8369


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