ManTech International Corporation

Good afternoon and welcome to the Mantec first quarter fiscal year 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone phone And as a reminder, this conference call is being recorded. I would now like to turn the call over to Stephen Bathur, Vice President, Corporate Development and Investor Relations. Sir, please go ahead.

Thank you. Welcome, everyone. Thanks for participating on Mantec's first quarter call. Joining me today is Kevin Phillips, our Chairman, CEO, and President. Judy Bajornis, our CFO, and Matt Tate, our COO. During this call, we will make statements that do not address historical facts and thus are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to factors that could cause actual results to differ materially from anticipated results. For a full discussion of these factors and other risks and uncertainties, please refer to the section entitled Risk Factors in our latest Form 10-K and our other SEC filings. We undertake no obligation to update any of the forward-looking statements made on this call. On today's call, we will discuss some non-GAAP financial measures, which we believe provide useful information for investors. These non-GAAP measures should not be evaluated in isolation or as a substitute for GAAP performance measures. You can find a reconciliation of the non-GAAP measures discussed on this call in our first quarter earnings release. With that, let me hand the call over to Kevin.

Good afternoon, everyone, and thanks for joining the call. Mantec continues to perform well overall. Our first quarter results demonstrated steady execution and strong profitability, which was evident by our EBITDA, adjusted net income, and adjusted diluted earnings per share, as well as our margins. While our industry and company have fared better than others on a relative basis over the past year, the pandemic and its duration has created a somewhat choppy operating environment. As a result, Quarterly revenue growth was tempered by lighter ODCs and customer procurements shifting to the right. While procurement delays persist in pockets, we made good progress in submitting proposals in Q1 and the volume of our proposals outstanding grew. The uneven market environment is likely to linger for a few more quarters. However, the long-term fundamentals and positioning of the business remain sound. Our view is reinforced by a few secular trends. namely the fact that national security threats are not abating and that there is a persistent need for technology modernization for both IT and physical platforms with an increasing convergence of the two. That said, the associated market opportunities are still bound by budget realities. The administration recently provided their FY22 budget request, which calls for $753 billion for defense and $769 billion for non-defense, which represents proposed increases of approximately 2% and 16% over enacted levels respectively. We look forward to seeing the details of the request later in May to confirm our understanding of the administration's priorities. It is our hope that the budget details are released in the near term to provide our customers with sufficient clarity into their funding levels against their critical mission requirements. Our country's national security strategy continues to place an increasing priority on deterring near-peer threats, which is a substantial shift away from the two-decade strategy centered on the global war on terror. This strategy is materializing on a number of fronts, including a decision to depart from Afghanistan by September 11th of this year. As a reminder, Mantec's exposure in-country today is relatively small, representing low single digits of annual revenues. much different from where the business was 10 years ago. We view the drawdown of our military presence in Afghanistan as a potential opportunity for the DoD to repurpose funds towards technology that will advance modernization and bring new capabilities to meet near-pure national security threats. Many of you have been on this journey through us and with us to evolve the business towards delivering differentiated solutions as well as pursuing customers that prioritize innovation. This focus on positioning and execution remains a top priority as we begin to operate in a potentially more rigid budget environment. I'll round out my market commentary by noting that cyber remains an enduring national priority. The administration is recruiting well-experienced thought leaders to key cyber positions and recently named its National Cyber Director and a leader for the Cybersecurity and Infrastructure Security Agency, adding breadth and depth to our broader national security team. man types of solid reputation and distinguished full-spectrum cyber capabilities position us well for continued growth in this domain. Shifting gears to talent, competitive pressures in the labor market have not relented and attracting highly clear professionals is an enduring challenge. We are pleased with the steady support from Congress in recognizing the scarcity and criticality of preserving talent supporting critical national security missions and applaud its most recent extension of the CARES Act Section 3610 coverage through September 30th. Our reliance on this provision has been steadily declining as customers move towards normalized operations, but it remains a critical tool relied upon by many in industry in retaining highly skilled and highly clear talent. As national vaccination progress rolls out, we are planning for a welcome return for more normalized operations. Consistent with our operating philosophy since the start of the pandemic, the health and safety of our employees, customers, and partners is our utmost priority. We recognize that we will all be operating in a new normal and are tailoring our approach in a manner that supports Mantec's goal of being the employer of choice in our industry. Sticking with talent, I am pleased to announce that we reinforced our leadership ranks with the promotion of Julianna Barker to the role of Mantec's Chief Human Resources Officer and the appointment of Joe Cuba as our KEIF growth officer. Juliana has served as interim CHRO since last December, seamlessly advancing MedTech's initiatives and attracting, developing, and retaining talent. Joe joined us in March, assuming the charter of our sales and growth activities, and is working in tandem with our operations team and technologists to drive MedTech's differentiated solutions across the federal market. I look forward to working closely with them both as they bring their passion, experience, and hands-on leadership to empower our employees and customers alike. Now, Judy will walk through the details of our Q1 financial performance. Judy?