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Hiring Binge to Continue for ManTech

Zacks Equity Research

ManTech International Corporation (MANT) recently disclosed its intention to continue its hiring spree in 2013, despite a 10.1% year-over-year decrease in revenue in 2012. The company intends to increase its employee strength mostly in the cybersecurity and technical services divisions as it anticipates a turnaround in fortunes in the current year with solid revenue growth based on current programs.

In Jun 2012, the company had won a $2.85 billion contract as Contractor Logistics Sustainment and Support from the U.S. Army. This has reportedly led to an addition of 500 employees in 2012 and is likely to further add 200 more in 2013. ManTech also won a contract for the Army’s Strategic Services Sourcing procurement program, for which it would require additional workforce.  

In fourth quarter 2012, ManTech received a three-year, $72 million contract for Naval Air Systems Command Warfare Modeling, Simulation, and Analysis Support, whereby it would continue to support the Warfare Analysis and Integration Department of the Naval Air Systems Command.

Contract awards (bookings) aggregated $222 million in fourth quarter 2012, representing a book-to-bill ratio of 0.4. For full year 2012, contract awards totaled a record $4.8 billion for a book-to-bill ratio of 1.9. With a significant number of awards, the company had a healthy backlog of business worth $6.5 billion by the end of the year. At year-end 2012, the company had $135 million in cash and cash equivalents, up from $114 million in the year-ago period.

With strong liquidity position and robust business backlogs, ManTech is poised to register solid revenue growth in 2013. The company envisages continuous recruitment initiatives to fulfill its order backlogs. We also remain encouraged by the positive developments in the industry.

However, the company needs to be wary of significant competition from other players in the industry such as Lionbridge Technologies Inc. (LIOX) that carries a Zacks Rank #1 (Strong Buy), and Computer Sciences Corporation (CSC) and Syntel, Inc. (SYNT) – each carrying a Zacks Rank #2 (Buy). ManTech presently carries a Zacks Rank #5 (Strong Sell).

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