ManTech International Corporation

ladies and gentlemen good afternoon and welcome to the man tech second quarter fiscal year 2021 earnings conference call at this time all participants on a listen only mode later we'll 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 telephone as a reminder the conference call is being recorded i would now like to turn the conference over to your Over to Stephen Vather, Vice President, Corporate Development and Investor Relations.

Welcome, everyone. Thanks for participating on Mantec's second 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 second quarter earnings release. With that, let me hand the call over to Kevin.

Thanks, Stephen, and good afternoon, everyone. I'd like to start the call today by thanking the entire Mantec team for their unwavering dedication to our customers and their critical missions. This steadfast focus enabled another quarter of strong results including record profitability. We also saw strong Q2 bookings, which were driven by successful outcomes on the recompete front, as well as new awards and contract extensions and expansions. We exited the quarter with nearly $10 billion in proposals outstanding, another company record. This includes both a significant level of new business opportunities, but also a higher-than-average level of recompete. This activity demonstrates the healthy demand we are seeing from customers for our differentiated services and solutions across the business. The market environment remained uneven throughout most of the quarter. However, we are seeing signs of incremental improvement as customers are increasingly returning to normalized operations. Collectively, these trends reflect the impact from pandemic-related disruptions, which have created a choppy and somewhat slower pace of awards in year-to-date 2021. Exiting the quarter and through the balance of the year, we see and expect a robust level of proposal submissions, and the current velocity suggests that we may exceed last year's volume. The volume of adjudications combined with our ability to continue to take market share will be the key driver for our anticipated bookings and acceleration of revenue growth in the second half of 21 and into next year. Overall, we are seeing strong market demand across the majority of our business, and we expect that to continue throughout the second half of this year. Turning to the defense budget environment, Congress appears to be making good progress on the FY22 appropriations. However, given the fulsome legislative agenda, we expect to begin the year under a continuing resolution. Since our Q1 call, we have received the administration's detailed budget which continues to demonstrate clear alignment between national priorities and Mantec's areas of focus. This is a reflection of the actions we have taken to continuously position our business for success. For example, cyber remains a top priority in the budget calls for over $20 billion in unclassified spending across defense and federal civilian customers, which represents nearly 9% growth year over year. Cyber demand remains evident across a broad range of capabilities, We see a strong focus on zero-trust architectures and cyber operations, both areas where we have differentiated solutions and capabilities. The budget also calls for over $97 billion of unclassified IT modernization, representing 4% growth year-over-year. The continued IT modernization push across the federal government also aligns with Mantec's investments and capabilities in analytics, automation, data at the edge, and other key technologies enabling both mission and enterprise operations. Finally, intelligence community spending remains steady at nearly $86 billion, and we still have ample market opportunity in this area. Lastly, I want to note that the drawdown of U.S. military presence in Afghanistan remains on track. All Mantec personnel supporting DoD programs in that country have already shifted into other regions. Mantec has proudly supported the Department of Defense for multiple decades at the tactical edge. We look forward to continued support for our customers in their global missions and are monitoring how their needs are evolving and the implications that has for our programs and employees. Now, Judy will walk through details on our Q2 financial performance and outlook. Judy?