- The Washington Times - Monday, May 21, 2007

Stock analysts are bullish on ManTech International Corp., but divided over how war funding issues will affect the Fairfax defense contractor.

ManTech is an information technologies company that caters to the defense and intelligence communities.

The company provides communications capabilities and technology support to war fighters on the ground. In addition, ManTech works with the intelligence community to share its information securely across different agencies.

“The need for these services isn’t going away,” said Mike Lewis, senior vice president at BB&T; Capital Markets, the equity research arm of the BB&T; Corp., based in Winston-Salem, N.C.

Shares of ManTech ticked up moderately to $32.46 yesterday, up 32 cents from Friday.

This month the company expanded its reach in the intelligence community with its purchase of SRS Technologies, an information technology firm that specializes in geospatial and imagery intelligence.

ManTech’s profits jumped 9 percent in the first quarter to $13.3 million (39 cents per diluted share) from $12.1 million (36 cents) the previous year.

Revenue for the first quarter rose 7 percent to $294.3 million from $275.3 million a year ago.

“It’s the war exposure that has me excited for investors,” said Erik Olbeter, an analyst at the Stanford Group Co., a financial advisory firm in Houston. “In this sector, the more war exposure you have the better.”

ManTech has won a slew of notable contracts from all arms of the military and a number of “three letter” intelligence agencies. Due to the sensitive manner of its security contracts, ManTech would not discuss their details.

But political disagreement between Congress and the president over the Iraq war has created a tight funding environment for defense contractors.

Mark Jordan, an analyst from A.G. Edwards & Sons Inc., a financial planning firm in St. Louis, said that the budget crunch is a concern to investors and could affect the firm’s bottom line.

“ManTech’s valuation has been impacted by a negative general industry perception caused by the underperformace of other companies in the industry,” said Mr. Jordan.

“Clearly if there had been more predictable funding, ManTech’s growth would probably be better,” he said.

Other stock analysts disagreed.

“The need for persistent intelligence reconnaissance on the battlefield is a high priority,” said Mr. Lewis.

“That means the requirement for these services will accelerate, not decelerate, whether or not we pull out of Iraq anytime soon.”

“Contracts are more competitive than they used to be,” said Mr. Olbeter. “But we don’t expect the delay in the war supplements to affect ManTech.”

The company acknowledged the funding crunch but said it had little to no effect on ManTech’s business plan.

“The sectors we support, namely the intelligence and counterterrorism communities, are funded on time and have been in a growing capacity since September 11,” said Joseph Corrmier, vice president of corporate development at ManTech.

According to Mr. Corrmier, the company has seen 12 percent organic growth even with the budget delays.

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