Document
false0000892537 0000892537 2020-02-19 2020-02-19


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
__________________

FORM 8-K
___________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 19, 2020
__________________________________________

ManTech International Corporation
(Exact name of registrant as specified in its charter) 
__________________________________________
Delaware
000-49604
22-1852179
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
2251 Corporate Park Drive
Herndon
VA
20171
(Address of principal executive offices)
 
 
(Zip Code)
Registrant's telephone number, including area code: (703) 218-6000

(Former name or former address, if changed since last report.)
__________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock
MANT
Nasdaq

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§203.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.





Item 2.02    Results of Operations and Financial Condition;
Item 7.01    Regulation FD Disclosure;
Item 8.01    Other Events
On February 19, 2020, ManTech International Corporation announced its financial results for the fourth quarter and fiscal year ended December 31, 2019, and provided initial financial guidance for fiscal year 2020 (the "Earnings Release"). ManTech also announced the declaration of a quarterly cash dividend payment to its stockholders. A dividend of $0.32 per share will be paid on March 20, 2020 to stockholders of record as of the close of business on March 6, 2020. Any future declarations of dividend payments are subject to the determination and approval of the Board of Directors.
A copy of the Earnings Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01    Financial Statements and Exhibits
(d) Exhibits
Exhibit
No.
Description of Exhibit
104
Cover Page Interactive Data File (embedded in the Inline XBRL document).





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
MANTECH INTERNATIONAL CORPORATION
 
 
 
 
 
 
By:
/s/    Michael R. Putnam
Date:
February 19, 2020
Name:
Michael R. Putnam
 
 
Title:
Senior VP - Corporate & Regulatory Affairs












Exhibit



Exhibit 99.1
ManTech Announces Financial Results for
Fourth Quarter and Fiscal Year 2019

Revenue: $604 million for the fourth quarter and $2.22 billion for the year (9% organic growth)
EBITDA Margin: 9.0% for the fourth quarter and 8.7% for the year
Diluted EPS: $1.00 for the fourth quarter and $2.83 for the year
Adjusted Diluted EPS: $0.81 for the fourth quarter and $2.91 for the year
Book-to-Bill Ratio: 0.7 for the fourth quarter and 1.3 for the year
Cash Flow from Operations: $221 million for the year (1.9 times Net Income)
2019 performance above the high end of guidance on all metrics
Raises quarterly cash dividend from $0.27 by 19% to $0.32 per share

HERNDON, Va., February 19, 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 fourth quarter and full fiscal year 2019, which ended December 31, 2019.

"ManTech's steadfast mission-first, customer-focused strategy, combined with our innovation and strong program execution continues to produce outstanding financial performance. For the fourth consecutive year, ManTech delivered accelerating organic revenue growth, increased profitability, robust cash flow and demonstrated continued business development momentum. Customer appetite for ManTech's differentiated solutions remains strong, giving us confidence in our future growth prospects," said ManTech President and Chief Executive Officer Kevin M. Phillips.

Summary Operating Results
 
Three Months Ended December 31,
 
Year Ended December 31,
(In Millions Except Per Share Amounts)
2019
 
2018
 
2019
 
2018
Revenue
$604.4
 
$497.1
 
$2,222.6
 
$1,958.6
Operating Income
$38.1
 
$28.6
 
$138.3
 
$112.7
Net Income
$40.6
 
$20.2
 
$113.9
 
$82.1
Diluted EPS
$1.00
 
$0.50
 
$2.83
 
$2.06
 
 
 
 
 
 
 
 
Non-GAAP Financial Measures*
 
 
 
 
 
 
 
EBITDA
$54.5
 
$41.1
 
$194.2
 
$165.3
EBITDA Margin
9.0%
 
8.3%
 
8.7%
 
8.4%
Adjusted Net Income
$32.9
 
$23.6
 
$117.0
 
$98.6
Adjusted Diluted EPS
$0.81
 
$0.59
 
$2.91
 
$2.47
*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 increased demand for our services and solutions, revenue was $604 million for the quarter and $2.22 billion for the year, up 22% and 13% over the comparable 2018 periods, respectively. In both the quarter and for the full year, revenue growth was driven by a combination of organic expansion from recent contract awards and acquisitions.






Operating income was $38.1 million for the quarter and $138.3 million for the year, up 33% and 23% over the comparable 2018 periods, respectively.

EBITDA was $54.5 million for the quarter and $194.2 million for the year, up 33% and 17% over the comparable 2018 periods, respectively. EBITDA margin was 9.0% for the quarter and 8.7% for the year, both showing improvement compared to respective 2018 periods.

Net income was $40.6 million for the quarter and $113.9 million for the year, up 101% and 39% over the comparable 2018 periods, respectively. Diluted earnings per share ("EPS") was $1.00 for the quarter and $2.83 for the year, up 100% and 37% over the comparable 2018 periods, respectively. Net income and EPS in the quarter and for the year benefited from a $12 million reduction to our income tax expense resulting from the reassessment of current and prior years research and development tax credits.

Adjusted net income was $32.9 million for the quarter and $117.0 million, up 39% and 19% over the comparable 2018 periods, respectively. Adjusted diluted EPS was $0.81 for the quarter and $2.91 for the year, up 37% and 18% over the comparable 2018 periods, respectively.

Cash Management and Capital Deployment

For the year, cash flow from operations totaled $221 million. Days sales outstanding (DSO) were 59 days, an improvement of 14 days compared to the fourth quarter of 2018.

During the quarter, the Company paid $10.8 million, or $0.27 per share, as part of its regular cash dividend program to its common stockholders of record as of December 6, 2019. As of December 31, 2019, the Company had $8.9 million in cash and cash equivalents and $36.5 million of outstanding borrowings on its $500 million revolving-credit facility, which provides the Company with ample financial capacity to pursue acquisitions and issue dividends while maintaining a strong balance sheet.

The Company has increased the amount of its quarterly cash dividend from $0.27 to $0.32 per share.

The Board of Directors has declared a quarterly dividend of $0.32 to be paid on March 20, 2020 to all common stockholders of record as of March 6, 2020, as part of its regular quarterly cash dividend program. Based on the average of recent trading prices the new annual yield is approximately 1.6%. 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 $413 million in the quarter, representing a book-to-bill ratio of 0.7. For the year, contract awards totaled $2.9 billion for a book-to-bill ratio of 1.3. In 2019, approximately 50% of the awards were for new business. Book-to-bill ratios for both the quarter and the year reflect a healthy awards environment and ManTech's strong market positioning. Proposal activity remains robust and the Company expects contract awards to continue at a healthy pace in 2020.

The Company's backlog of business at the end of the year was $9.1 billion, including $1.3 billion of funded backlog.






Forward Guidance

The Company expects to achieve revenue, adjusted net income and adjusted diluted earnings per share in 2020 as specified in the table below.
Measure
Fiscal 2020 Guidance
Revenue (million)
$2,375 - $2,475
Adjusted Net Income* (million)
$126.2 - $132.4
Adjusted Diluted EPS*
$3.08 - $3.23
*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 discrete tax items. The Company does not provide a reconciliation of forward-looking adjusted net income and adjusted diluted EPS, due to the 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 a significant effect on future GAAP results.

ManTech Chief Financial Officer Judith L. Bjornaas said, “I am delighted with the superb financial performance in 2019 across all of our key metrics. We are confident in the momentum of the business to forecast continued growth in 2020. Our unrelenting focus is on delivering value to our customers, employees and shareholders."

Conference Call

ManTech executive management will hold a conference call on February 19, 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 2791557. 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 failure to compete effectively for new contract awards or to retain existing U.S. government contracts; inability to recruit and retain sufficient number of employees with specialized skill sets or necessary security clearances 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, or federal budget constraints generally; failure to compete effectively for awards procured through the competitive bidding process, and the adverse impact of delays resulting from our competitors’ protests of new contracts that are awarded to us; disruption of our business or damage to our reputation resulting from cyber attacks or other security threats ; failure to obtain option awards, task orders or funding under contracts; the government renegotiating, modifying or terminating contracts; failure to comply with, or adverse changes in, complex U.S. government laws and procurement regulations; adverse results of 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 risks associated with conducting business internationally; and adverse changes in business conditions that may cause our investments in recorded goodwill to be 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
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share and Per Share Amounts)
 
(unaudited)
 
December 31,
 
2019
 
2018
ASSETS
 
 
 
Cash and cash equivalents
$
8,854

 
$
5,294

Receivables—net
398,976

 
405,378

Taxes receivable—current
21,996

 

Prepaid expenses
20,030

 
23,398

Other current assets
4,878

 
5,915

Total Current Assets
454,734

 
439,985

Goodwill
1,191,259

 
1,085,806

Other intangible assets—net
196,778

 
171,962

Operating lease right of use assets
117,728

 

Property and equipment—net
85,631

 
51,427

Employee supplemental savings plan assets
36,777

 
30,501

Investments
11,550

 
11,830

Other assets
13,457

 
12,360

TOTAL ASSETS
$
2,107,914

 
$
1,803,871

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
LIABILITIES
 
 
 
Accounts payable and accrued expenses
$
146,016

 
$
126,066

Accrued salaries and related expenses
97,298

 
89,058

Operating lease obligations—current
29,047

 

Contract liabilities
27,620

 
28,209

Total Current Liabilities
299,981

 
243,333

Deferred income taxes
131,782

 
108,956

Operating lease obligations—long term
103,148

 

Long term debt
36,500

 
7,500

Accrued retirement
35,552

 
30,999

Other long-term liabilities
10,309

 
11,889

TOTAL LIABILITIES
617,272

 
402,677

COMMITMENTS AND CONTINGENCIES
 
 
 
STOCKHOLDERS' EQUITY
 
 
 
Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 27,235,860 and 26,817,513 shares issued at December 31, 2019 and 2018; 26,991,747 and 26,573,400 shares outstanding at December 31, 2019 and 2018
272

 
268

Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 13,187,195 and 13,188,045 shares issued and outstanding at December 31, 2019 and 2018
132

 
132

Additional paid-in capital
525,851

 
506,970

Treasury stock, 244,113 and 244,113 shares at cost at December 31, 2019 and 2018
(9,158
)
 
(9,158
)
Retained earnings
973,767

 
903,084

Accumulated other comprehensive loss
(222
)
 
(102
)
TOTAL STOCKHOLDERS' EQUITY
1,490,642

 
1,401,194

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
2,107,914

 
$
1,803,871







MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
 
(unaudited)
 
(unaudited)
 
Three months ended
December 31,
 
Year Ended
December 31,
 
2019
 
2018
 
2019
 
2018
REVENUE
$
604,413

 
$
497,072


$
2,222,559


$
1,958,557

Cost of services
515,198

 
427,595

 
1,893,461

 
1,678,100

General and administrative expenses
51,121

 
40,884

 
190,773

 
167,715

OPERATING INCOME
38,094

 
28,593


138,325


112,742

Interest expense
(506
)
 
(371
)
 
(2,594
)
 
(2,378
)
Interest income
49

 
76

 
450

 
161

Other income (expense), net
(33
)
 
17

 
(83
)
 
80

INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS
37,604

 
28,315

 
136,098

 
110,605

(Provision) benefit for income taxes
3,017

 
(8,118
)
 
(22,212
)
 
(28,530
)
Equity in earnings (losses) of unconsolidated subsidiaries

 
(5
)
 
4

 
22

NET INCOME
$
40,621

 
$
20,192


$
113,890


$
82,097

 
 
 
 
 
 
 
 
BASIC EARNINGS PER SHARE:
 
 
 
 
 
 
 
Class A common stock
$
1.01

 
$
0.51

 
$
2.85

 
$
2.08

Class B common stock
$
1.01

 
$
0.51

 
$
2.85

 
$
2.08

DILUTED EARNINGS PER SHARE:
 
 
 
 
 
 
 
Class A common stock
$
1.00

 
$
0.50

 
$
2.83

 
$
2.06

Class B common stock
$
1.00

 
$
0.50


$
2.83


$
2.06







MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
 
(unaudited)
 
Year ended
December 31,
 
2019
 
2018
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
 
 
 
Net income
$
113,890

 
$
82,097

Adjustments to reconcile net income to net cash flows from operating activities:
 
 
 
Depreciation and amortization
55,879

 
52,569

Noncash lease expense
27,619

 

Deferred income taxes
15,739

 
11,762

Stock-based compensation expense
7,493

 
5,073

Bad debt expense
3,000

 

Contract loss reserve
(1,481
)
 

Loss on sale and retirement of property and equipment
171

 
75

Equity in (earnings) of unconsolidated subsidiaries
(4
)
 
(22
)
Change in assets and liabilities—net of effects from acquired businesses:
 
 
 
Receivables-net
24,660

 
(87,098
)
Taxes receivable—current
(21,996
)
 
18,732

Prepaid expenses
419

 
(613
)
Other current assets
4,060

 
(1,321
)
Employee supplemental savings plan asset
(6,297
)
 
1,754

Accounts payable and accrued expenses
10,850

 
5,327

Accrued salaries and related expenses
2,796

 
2,095

Operating lease obligations
(28,520
)
 

Contract liabilities
(589
)
 
6,110

Accrued retirement
4,553

 
(3,518
)
Other long-term liabilities
9,380

 
1,384

Other
(216
)
 
(967
)
Net cash flow from operating activities
221,406

 
93,439

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 
 
 
Acquisition of businesses-net of cash acquired
(152,851
)
 
(5,279
)
Purchases of property and equipment
(54,795
)
 
(30,114
)
Deferred contract costs
(3,878
)
 
(5,233
)
Investment in capitalized software for internal use
(3,677
)
 
(5,018
)
Proceeds from equity method investment
283

 

Proceeds from corporate owned life insurance
21

 
1,300

Net cash used in investing activities
(214,897
)
 
(44,344
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 
 
 
Borrowings under revolving credit facility
624,000

 
575,500

Repayments under revolving credit facility
(595,000
)
 
(599,000
)
Dividends paid
(43,205
)
 
(39,624
)
Proceeds from exercise of stock options
12,895

 
12,595

Payment consideration to tax authority on employee's behalf
(1,503
)
 
(2,723
)
Principal paid on financing leases
(136
)
 

Net cash used in financing activities
(2,949
)
 
(53,252
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
3,560

 
(4,157
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
5,294

 
9,451

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
8,854

 
$
5,294







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
December 31,
 
Year Ended
December 31,
(In Thousands)
2019
 
2018
 
2019
 
2018
NET INCOME
$
40,621

 
$
20,192

 
$
113,890

 
$
82,097

Equity in losses (earnings) of unconsolidated subsidiaries

 
5

 
(4
)
 
(22
)
Provision (benefit) for income taxes
(3,017
)
 
8,118

 
22,212

 
28,530

INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS
$
37,604

 
$
28,315

 
$
136,098

 
$
110,605

Other expense (income), net
33

 
(17
)
 
83

 
(80
)
Interest income
(49
)
 
(76
)
 
(450
)
 
(161
)
Interest expense
506

 
371

 
2,594

 
2,378

Depreciation and amortization
16,409

 
12,541

 
55,879

 
52,569

EBITDA
$
54,503

 
$
41,134

 
$
194,204

 
$
165,311

EBITDA Margin
9.0
%
 
8.3
%
 
8.7
%
 
8.4
%


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
December 31,
 
Year Ended
December 31,
(In Thousands Except Per Share Amounts)
2019
 
2018
 
2019
 
2018
NET INCOME
$
40,621

 
$
20,192

 
$
113,890

 
$
82,097

Amortization of acquired intangibles
5,495

 
4,849

 
20,139

 
22,249

Research and development tax credit
(11,941
)
 

 
(11,941
)
 

Adjustments for tax effect
(1,302
)
 
(1,392
)
 
(5,055
)
 
(5,740
)
ADJUSTED NET INCOME
$
32,873

 
$
23,649

 
$
117,033

 
$
98,606

 
 
 
 
 
 
 
 
ADJUSTED DILUTED EPS
 
 
 
 
 
 
 
Class A common stock
$
0.81

 
$
0.59

 
$
2.91

 
$
2.47

Class B common stock
$
0.81

 
$
0.59

 
$
2.91

 
$
2.47







Investor Relations
Media
Stephen Vather
Jim Crawford
Vice President, M&A and Investor Relations
Executive Director, External Communications
(703) 218-6093
(571) 446-7550
Stephen.Vather@ManTech.com
James.Crawford2@ManTech.com