ManTech International Corp.’s recent quarterly results reveal it is in a “sweet spot” of government contracting, a top executive said.
Robert A. Coleman, Fairfax-based ManTech’s president and chief operating officer, said the company’s $2.71 billion in work pending — up 41 percent over last year — proves that ManTech’s strategy of focusing on mission-support services for the intelligence community is paying off.
“Look at us as an intelligence company,” said Mr. Coleman. “That is a mission and a need that the U.S. government will have [for] many years to come.”
Mr. Coleman said the company’s emphasis on day-to-day intelligence support services, such as developing new software or providing analytical services, sets it apart from other contractors. Only about 200 of the company’s 5,800 employees are directly supporting military operations in Iraq and Afghanistan, he said.
Earlier this month, ManTech reported third-quarter revenue of $283.7 million, below company guidance of $290 million to $300 million and Wall Street’s prediction of $295.9 million. Analysts said the shortfall — credited to contract reductions and low equipment sales — isn’t cause for major concern.
“It wasn’t a big miss,” said Erik Olbeter, an analyst with Stanford Washington Research Group in the District, which doesn’t own shares or do banking with the company. “It’s not to say it was inconsequential, but the market was OK with slight problems like that.”
One of the company’s more impressive statistics for the quarter was record contract bookings of $985 million.
“That was a huge number,” Mr. Olbeter said. However, only about one-fifth of that amount came from new work opportunities as opposed to recompetitions of previously won contracts. “When you pare it down a little bit more, we saw a little bit of weakness.”
The company reported organic revenue growth — excluding mergers and acquisitions — of 8.1 percent.
While ManTech should continue focusing on organic growth, with no debt and $47 million in cash, the company has enough buying power to pounce on attractive acquisition targets, Mr. Olbeter said.
“That’s one way certainly to get things moving,” he said.
Mr. Coleman said the company is primarily concerned with organic growth, “But part of our strategy is to enhance that growth through strategic acquisition.”
On Oct. 5, after the Sept. 30 end to the third quarter, the company completed a takeover of GRS Solutions Inc., a Falls Church intelligence contractor with $10 million in annual sales.
“The acquisition enhances ManTech’s access to high-growth areas in the intelligence market,” William R. Loomis, an analyst with Stifel Nicolaus & Co., wrote in a recent research note.
More than 90 percent of GRS employees hold high-level government clearances, which is an obvious asset considering the time and difficulty involved in obtaining the necessary approvals for work on classified projects.
The company’s fourth-quarter and full-year financial results will include the GRS acquisition.Shares of ManTech closed down 43 cents on the Nasdaq Stock Market yesterday at $35.48.
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