Founder and CEO George Pedersen focuses on intell, cyber and health care as company works through the revenue hit of the Afghan drawdown. ManTech holds steady as a top 20 contractor on the 2013 Washington Technology Top 100 company.
ManTech International Corp. chief executive officer George J. Pedersen is a self-styled optimist. Where some industry observers see appropriations chaos and rough going in the government market, he discerns a certain kind of stability—and business opportunities for the company he runs.
“I’m probably the only guy in town who’s optimistic,” he said. “[The government has] enough funding for the current year. On the first of October, Congress will do a continuing resolution, which just means last year’s programs will be funded at last year’s levels and for us that’s a good thing. And I honestly believe they’ll come up with some conclusion on sequestration and find some way to declare victory, if you will.”
The company’s leaders are also buoyed by “robust” growth in their intelligence, cybersecurity and health care business—key priority areas for the government--over the last year, despite a slight decline in revenues over the last year. ManTech’s revenues for the first quarter of 2013 were $646 million compared to $676.5 million for the same quarter last year, largely due to the U.S. drawdown in Afghanistan, officials said.
The company is ranked No. 15 on the 2013 Top 100 with $1.9 billion in prime contracts during fiscal 2012.
“You saw a downside because we have a very significant presence in Afghanistan and that is in the process of being reduced and changed, so that caused our numbers to come down a little bit,” Pedersen said. “We are planning along with the government a change in our staffing in Afghanistan…but we’re prepared for that.”
ManTech is also prepared for escalating demand from government agencies for intelligence and cyber security support. In cyber, the company boasts capabilities in cybersecurity operations centers, network operations, forensics and exploitation, counter-intrusion support, computer security training, and penetration testing and network simulation.
“We continue to see growth in the intelligence community and a significant amount of growth in cyber--all the budgets in the government are moving in that direction,” said Kevin Phillips, ManTech’s chief financial officer.
In a time of tight budgets, “the government tries to figure out how they can work differently and smartly and that actually plays to our advantage, along with their prioritization in cyber and a demand for increased intelligence,” he added.
The company’s expertise in health IT, including technologies that encompass health information sharing and clinical analytic solutions, also create an opportunity as the government’s demands in that arena rise--especially as the Patient Protection and Affordable Care Act comes into full effect next year. The new law will require significant investment in IT systems and processes, ManTech officials said.
“In the health care market, we know the government need to automate records, improve analysis and workflow and track patients is going to be huge,” Phillips said. “Where we play in that is in systems integration and data analytics. We think that ManTech’s history of doing data analysis and protecting information in a secure environment has a large play in health care.”
ManTech bolstered its proficiency in the health IT sector with the acquisition earlier this year of ALTA Systems Inc. of Fairfax, Va., an IT and professional services company with critical applications in healthcare systems and capital planning. ALTA has a prime position on the Centers for Medicare and Medicaid Services enterprise systems development contract, an ID/IQ contract vehicle with a $4 billion ceiling and period of performance through May 2018.
Overall, ManTech leaders plan to continue to make acquisitions to buttress the company’s position in its other market sectors.
“We have very strong cash flow in our company and when we want to penetrate a new market, what we have traditionally done is make an initial acquisition, test the market and then if it’s successful, continue to do that,” Pedersen said. “We have $170 million in cash in the bank; we have a $500 million line of credit with Bank of America that were not currently using. So we have the ability to grow organically and grow aggressively from acquisitions.”
Like other large industry players, ManTech officials also are eyeing opportunities in the commercial space to offset declining budgets on the government side. Cybersecurity is one of those areas. “The [computer security] risks are finally hitting the boardrooms in commercial industry so we think we’re well positioned to expand there,” Phillips said.
Still, ManTech continues to collect strong contract awards from the government. Most recently, the company was awarded a contract by the Navy’s Space and Naval Warfare Systems Center Atlantic to provide full lifecycle support for command, control and decision support systems. The IDIQ multiple-award contract was awarded to 15 companies and is valued at $899.8 million with a one-year base period and four one-year options. In addition, in the last year, ManTech has received more than $300 million in C4ISR awards from the Army, Phillips said.
Leadership: George J. Pedersen, chief executive officer; Kevin Phillips, chief financial officer; Lou Addeo, executive vice president, corporate development and strategic acquisitions; Bill Varner, president and chief operating officer, Mission, Cyber & Intelligence Solutions; Dan Keefe, president and COO, Technical Services Group