Contracts, backlog help ManTech rack up 1Q gains

ManTech International Corp. saw first-quarter 2010 revenues climb to $587.6 million, a 31 percent gain from the $449.6 million in the first quarter of fiscal 2009, according to a company statement released after markets closed April 28.

Operating income for the quarter was $45.2 million (7.7 percent of revenue), up 12 percent from $40.4 million (9.0 percent of revenue) in the first quarter of fiscal 2009.

Operating margin percentage declined as expected, the company said, because of the lower profitability in business of the acquired Sensor Technologies Inc. and the amortization costs associated with that acquisition.

In addition, core profitability declined as several contract extensions were renegotiated by the customers, ManTech said.

Organic growth for the quarter was 15 percent, driven primarily by direct labor growth in support of recent awards for systems engineering and test and evaluation programs and expanded requirements on existing cybersecurity and logistics programs.

The company statement said organic growth was calculated as reported revenue for the current quarter divided by revenue for the prior-year quarter adjusted as if STI had been acquired one year earlier.

Net income for the quarter was $27.5 million, up 12 percent from $24.5 million in the first quarter of fiscal 2009.

Increases in interest expenses associated with the STI acquisition were offset by a drop in the effective tax rate from 39 percent in the first quarter of fiscal 2009 to 37.8 percent, the company said.

Diluted earnings per share for the quarter were $0.76, up 12 percent from $0.68 in the first quarter of fiscal 2009, driven by the increase in net income offset by a slightly higher share count compared to the prior-year quarter, ManTech said.

Cash flow from operations for the quarter was $42.8 million or 1.6 times net income, up from a use of cash of $31.8 million in the first quarter of fiscal 2009.

As of March 31, the company had $6 million in cash and cash equivalents and $108 million in debt.

First-quarter contract awards totaled $602 million, representing a book-to-bill ratio of 1.0.

Large, single-award contracts received during the quarter included the Homeland Security Department’s Secure Border Initiative Systems Engineering Support award. The three-year, $99 million program was awarded to ManTech in the fourth quarter of fiscal 2009, and a subsequent protest was resolved in February.

ManTech also won two Classified System Engineering Programs contracts totaling $173 million over five years to provide systems engineering and technical services for the classified programs.

In addition,the company received extensions to the Global Property Management Support Services contract and the Tank-automotive and Armaments Command contract totaling more than $100 million.

During the quarter, the government also awarded ManTech a $160 million prime contract to provide systems engineering and integration services to support current and future space launch operations for the Air Force Launch and Range Systems Wing.

A protest of that award was denied in April, and it will be included in next quarter’s bookings, ManTech said.

The company’s backlog of business at the end of the first quarter was $4.6 billion, of which $1.4 billion was funded.

Compared to the first quarter of fiscal 2009, total backlog increased 13 percent and funded backlog increased 29 percent, due in part to the robust backlog brought by the STI acquisition.

“In the first quarter of fiscal year 2010, we continued to accelerate revenue growth and strengthened our positioning in our key growth markets,” said George Pedersen, ManTech chairman and chief executive officer, in the statement.

“With a foundation of strong organic growth and cash flow, we also enhanced our flexibility to pursue strategic acquisitions that will add to shareholder value by completing a $200 million debt offering,” he added.

ManTech International, of Fairfax, Va., ranks No. 48 on Washington Technology’s 2009 Top 100 list of the largest federal government prime contractors.