Considered unsustainable, overseas work still providing big returns for ManTech


ManTech won a contract worth up to $2.85 billion over five years to repair mine-resistant, ambush-protected vehicles — better known as MRAPs. (Lucas Jackson-Pool/Getty Images)
June 11, 2012

With close to one-third of its revenue tied to work “in theater,” or on the battlefields in Iraq or Afghanistan, Fairfax-based ManTech International continues to seek new opportunities overseas even as it pursues new markets.

ManTech’s stock — which has been priced in the mid-$30 range for much of the year — tumbled in early May when the company lowered its financial forecast for fiscal 2012. Shares of the stock have more recently been stuck in the low- to mid-$20 range.

“We find that we don’t usually get credit for work that’s done in theater, because there’s always end-of-days considerations,” said Louis M. Addeo, who heads ManTech’s technical services group. “The investors, the analysts ... don’t view it as a sustainable component of our business.”

And yet companies with major presences overseas are still finding lucrative contracts abroad. McLean-based Science Applications International Corp., for instance, has seen a boost from in-theater work; the company last month attributed some of its revenue growth to a joint logistics program working on vehicles there.

ManTech, too, is finding work. It announced last week it has won a contract worth up to $2.85 billion over five years to assess and repair a family of mine-resistant, ambush-protected vehicles (better known as MRAPs).

Under the deal, the company will also add new technology, upgrade the systems and handle warehouse operations at repair locations, among other responsibilities. The work will occur in Afghanistan, Kuwait and other U.S. and international sites.

“Very simplistically — things are coming to an end,” said George A. Price Jr., senior equity research analyst for information technology services at BB&T Capital Markets. “But realistically [they’re] not coming to an end for a year and a half, two years, so there’s still money that’s going to be spent.”

BB&T and its affiliates have relationships with a number of government contractors, including ManTech.

Addeo argued that the continued flow of work overseas is providing the company cash to move into new lines of business. The company in April completed its purchase of Sacramento-based HBGary, meant to expand its cybersecurity work in the commercial market.

“We in the core business that I run have stepped back to a certain extent, because we’re not going to start acquiring into [a] space that may be shrinking,” he said. “We are the business that supports future-state growth in cyber, in health care and in other areas of our business we call emerging markets.”

ManTech has a particularly large amount of in-theater work; company officials said last month it makes up about 30 percent of its revenue. Addeo said ManTech continues to scout opportunities in the field. For instance, he said, the company is hoping to win work with the Army Sustainment Command.

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