COMPANY OUTLOOK

ManTech continues streak with more organic growth

ManTech International is touting a fourth consecutive year of acceleration in organic revenue growth as the company also seeks to position itself in technology areas that agencies are looking to move faster in.

During ManTech’s fourth quarter earnings call Wednesday, CEO Kevin Phillips told investors that agencies have fair certainty for at least the current federal fiscal year around what they want to procure and are doing so in a “regular, if not rapid pace.”

Part of that depends on the type of work agencies are looking to industry for, Phillips said, but either way they are “looking more for speed.”

“They're looking for innovation, and those are areas that we've been focused on because we generally view the global threat environment is driving different behaviors in the customer,” Phillips told analysts. “The capabilities that we have around cyber, IT, some of the analytics capabilities and intelligence operations support provide us a good placement in the market at a point where there's a greater demand.”

There also is demand under the broad umbrella of automation that includes artificial intelligence, machine learning and other tools to assist in decision making. Phillips said those areas touch on the need to ensure greater security around data and systems.

That overall backdrop and of course a string of one large win after another is boding well for ManTech, which posted $2.2 billion in revenue last year to register a 9-percent organic sales increase when excluding its acquisitions of the former Kforce Government Solutions business and H2M Group.

Herndon, Virginia-based ManTech also reported $2.9 billion in awards for a book-to-bill ratio of 1.3 times to show the backlog of business is growing faster than sales are being recorded against it. ManTech is forecasting around 8-percent revenue growth for this year.

But there could be one slight caveat to ManTech’s positive outlook on the overall macro environment -- how fiscal 2021 budget negotiations play out in an election season. As Phillips pointed out, the broader authorization process is much different and quicker than that of how individual agency appropriations get done.

Appropriations “may get hung up into a (continuing resolution) after the election simply because of the timing of decisions from funding,” Phillips said, adding that it “could move earlier.”

An even bigger award is almost official for ManTech at five years and up to $920 million to be exact, as was described during the call Wednesday. That contract was awarded by the General Services Administration’s FEDSIM acquisition center and could still be protested, so ManTech executives could not say much more than the fact that they were selected for it and the work is mostly new.

ManTech’s bottom line also ticked up last year to an 8.7 percent EBITDA margin (earnings before interest, taxes, depreciation and amortization) from 8.4 percent. The company sees this year’s margin holding roughly level at that 8.7 percent.

About the Author

Ross Wilkers is a senior staff writer for Washington Technology. He can be reached at rwilkers@washingtontechnology.com. Follow him on Twitter: @rosswilkers. Also find and connect with him on LinkedIn.

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