ManTech Predicts Growth From Boost In Federal Spending

Following a series of difficult years, solution provider ManTech International is finding traction again with the federal government’s commitment to spend more, especially to combat an increased cybersecurity threat, its CEO said Wednesday.

’We are experiencing the strongest budgetary environment in years,’ George Pedersen said during a call with analysts following the release of the company’s first-quarter 2016 numbers.

Revenue for ManTech, based in Fairfax, Va., had plunged close to 50 percent between 2011 and 2015 as the United States began to draw down its military presence in Afghanistan, lowering demand for ManTech’s global logistics, cybersecurity and systems engineering services, as well as other military offerings.

[Related: ManTech Looks Beyond 3Q Numbers Toward More Federal Contracts, Budget Accord]

However, after ManTech -- No. 24 on CRN's Solution Provider 500 list -- announced its third-quarter 2015 results, Pedersen said the company was ready to take on a more stable market following a two-year budget resolution between Congress and The White House that raised federal spending $80 billion and lifted a ceiling on borrowing.

That agreement allows ManTech’s federal customers to fully fund programs and initiatives around services and technology in cybersecurity, communications, intelligence and surveillance.

’With greater certainty around funding, our business opportunities continue to grow,’ Pedersen said Wednesday. ’The level of overall threats to our nation is not going away anytime soon, and so we see a stable-increase budget environment beyond 2017.’

With that rosier outlook, ManTech is looking to grow, and has found success in new IT services, as well as its cybersecurity capabilities.

Wall Street responded positively on Thursday, as ManTech stock rose more than 10 percent Thursday on the Nasdaq exchange to close at $36.27 a share.

William Varner, president of ManTech’s Cyber and Intelligence Solutions Group, said the company is also focusing on capturing potential new business, coming from a push by the Obama administration to bolster federal defenses against cybersecurity.

President Obama’s $19 billion cybersecurity action plan is a ’key part’ of his fiscal year 2017 budget request, and a significant indicator of cyber's importance for companies such as ManTech, Varner said.

’All of this positions us for continued organic growth across the intelligence community and our customer set,’ he said.

Meanwhile, business for ManTech’s Mission and Services group, according to ManTech’s president and COO, Daniel Keefe, is continuing to grow through the leveraging of ManTech’s ’increasing technical solution capabilities’ around big data analytics, predictive modeling, cloud deployment and enterprise IT.

By focusing on emerging requirements in these areas, Keefe said, ManTech was able to win contracts that give the company greater potential for organic growth over the rest of this fiscal year.

With IT support and services in high demand across ManTech’s client base, Pedersen believes a separate budget resolution will be passed in October that will lead to continued growth potential for the company.

For the first quarter, ManTech recorded growth in both revenue and net income over the same period last year.

ManTech said it took in $391 million for the quarter, representing an increase of 5.5 percent, and net income of $13.2 million, up nearly 12.5 percent from last year.

Pedersen said the growth also resulted in a cash backlog that ManTech is looking to use on acquisitions. There are several potential targets he said the company sees as promising.

However, Pedersen said he wants to lean toward adding a company that will open the door to a ’higher demand market,’ giving ManTech increased capabilities.

’We will not buy sales,’ he said.