ManTech sees growth on horizon despite the continuing resolution

For much of this decade, contractors have become used to the idea of federal agencies starting the government’s fiscal year with continuing resolutions because Congress cannot get full-year appropriations done before Sept. 30.

Companies in the federal market have also become used to the idea of delays in contract awards, although stopgap funding measures are not the only reason decisions get pushed back.

But during ManTech International’s third quarter earnings call Wednesday, CEO Kevin Phillips told investors the CR is merely one part of the budget landscape to keep an eye on.

“Once these CRs are cleared through, they still have that annual obligation to clear through, and they have to work that in years,” Phillips said. “That may impact the timing of awards more than it does the likelihood of it occurring.”

What does that mean for Herndon, Virginia-based ManTech specifically as it awaits the outcome of its almost $5 billion in outstanding bids?

“I do think that the majority of the work that we're going after, we're bidding on, will likely continue to be awarded,” Phillips told analysts. “Of course, there are new starts, but nothing that I would suggest would impact significantly the long-term outlook of the company.”

In the earnings release, ManTech lifted the bottom end of its revenue guidance to $2.19 billion from $2.13 billion with the top end unchanged at $2.21 billion. That would indicate total growth of 12-to-13 percent from last year and 8 percent on an organic basis excluding acquired sales from H2M Group and the former Kforce Government Solutions business.

ManTech executives did not give too much of a glimpse into next year other than to say that its contract awards put it on a path for sustained growth. The company’s funded backlog as of Sept. 30 climbed 17 percent to $1.5 billion with total backlog up 14 percent to a record $9.5 billion, while its book-to-bill ratio on a trailing 12-month basis was 1.5 to signal growth is on the horizon.

Of the $1.3 billion in awards for the quarter, Phillips said half were from defense agencies and 80 percent were “for missions in enterprise IT, security, mission operations support and cyber” -- areas ManTech often touts as in its core.

ManTech also sounds hungry for more.

“The flow for proposals small and large is heavy, and we are able to compete for larger bids more consistently now, and we're very excited about that,” Phillips said. “We do have large ones we're going after, and we'll see how successful we are in the timeline again against adjudications.”