Despite a drop in its third-quarter numbers, ManTech International believes a jump in federal government contracts – helped by this week’s budget agreement between Congress and the White House – will turn the company’s numbers back up over the rest of this year.
The security solutions provider – No. 24 on CRN’s Solution Provider 500 – reported a 12-percent year-over-year drop in third-quarter revenue to $393 million on Wednesday. It also saw net income fall 16 percent, to $13 million.
The revenue number came in slightly below the company’s expectations, Chief Financial Officer Kevin M. Phillips said Wednesday afternoon in an earnings call with analysts.
However, revenue grew sequentially for the second straight quarter, ManTech said in its public earnings statement.
In addition, the company more than doubled its cash during the quarter to $51.1 million and said it would continue to pursue acquisitions.
CEO George J. Pedersen said the two-year budget resolution, which will raise federal spending by $80 billion and lift the ceiling on borrowing into 2017, will allow ManTech’s customers like the military to fully fund programs through December.
"This is all a very positive development for ManTech," he said. "Our customers will have significantly more resources to expand their missions and will have certainty and civility they need to begin new programs."
Phillips said third-quarter revenue came in lower because the new contracts ManTech was awarded during the second and third quarters did not staff up as quickly as the company projected, and some purchases the company expected the government to make did not occur.
However, thanks to several multi-year multi-million dollar contracts won by ManTech this quarter, coupled with continued staffing of contracts the company landed in the last quarter, Phillips said ManTech is positioned to grow and is in the process of building a 2017 outlook that suggests mid-single digit growth.
"We could potentially do better if award activity continues at an elevated level," he said. "We expect margins to be steady as we focus on growth and program execution."
Regarding potential acquisitions, Phillips said ManTech may be interested in purchasing companies that can fit with capabilities ManTech wants to add, and as long as the company has the money to do it.
"Our strong balance sheet and cash flow (allow) us to pursue additional acquisitions," Pederson added. "We have a $500 million line of credit and a lot of cash in the bank."
PUBLISHED OCT. 28, 2015