===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
July 30, 2003
Date of Report (Date of earliest event reported)
MANTECH INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 000-49604 22-1852179
---------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
12015 Lee Jackson Highway, Fairfax, VA 22030
--------------------------------------------
(Address of principal executive offices)
(703) 218-6000
(Registrant's telephone number, including area code)
===============================================================================
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits. The following exhibit is filed with this report.
99.1 Transcript of Earnings Conference Call held on July 30, 2003,
announcing ManTech International Corporation's second quarter
financial results for fiscal year 2003 as well as its earnings
guidance for the third quarter of fiscal year 2003 and full
fiscal year 2003.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 30, 2003, as previously announced, ManTech International
Corporation participated in a public Earnings Conference Call and Audio Web Cast
for investors and analysts regarding its results of operations and financial
condition for the second quarter of 2003 as well as its earnings guidance for
the third quarter of fiscal year 2003 and full fiscal year 2003. The transcript
of the conference call is furnished as Exhibit 99.1 to this Current Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MANTECH INTERNATIONAL CORPORATION
Date: August 4, 2003 /s/ Ronald R. Spoehel
------------------------------
Name: Ronald R. Spoehel
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT 99.1
ManTech International Corporation
ManTech International 2ND Quarter 2003 Financial Results
Leader, Peter LaMontagne
07/30/03
Date of Transcription: August 4, 2003
Operator Good afternoon, everyone, and welcome to the
ManTech International second quarter fiscal
year 2003 earnings conference call. All
lines have been placed on mute to prevent
any background noise. After the speakers'
remarks, there will be a question and answer
period. If you would like to ask a question
during this time, simply press star, then
the number 1 on your telephone keypad. If
would like to withdraw your question, press
star, then the number 2. As a reminder,
today's call is being recorded. I would now
like to turn the call over to ManTech Senior
Corporate Vice President Peter LaMontagne.
Please go ahead, sir.
Peter LaMontagne Thank you, Matthew, and good afternoon,
ladies and gentlemen, and welcome to
ManTech International Corporation's 2003
second quarter earnings conference call.
My name is Peter LaMontagne; I'm a Corporate
Senior Vice President here at ManTech. We
are pleased that you are able to join us for
today's call, whether by telephone or via
the webcast. Leading today's call from
ManTech are George J. Pedersen, Chairman of
the Board, CEO, and President, and Ronald R.
Spoehel, our new Executive Vice President
and CFO. Before we begin our discussion, it
is important that we provide you with the
required statement relating to our written
and verbal disclosures and commentary
regarding ManTech and our results and
operations.
Statements made in ManTech's written and
verbal disclosures and commentary which do
not address historical facts could be
interpreted to be forward-looking
statements. These statements are made
pursuant to the safe harbor provision of the
Private Securities Litigation Reform Act of
1995, and are subject to factors that could
cause actual results to differ materially
from anticipated results. Examples of such
forward-looking statements include the
company's expected future earnings, as
suggested by backlog and GSA estimates,
updated guidance projections, and the
company's belief that there will be
increased defense and intelligence spending
in the future. The factors that could cause
actual results to differ materially from
those anticipated include but are not
limited to the following -- failure of
government customers to exercise options
under contracts, funding decisions of U.S.
government projects, government contracts,
procurements such as bid protest and
termination risks, competitive factors such
as pricing pressures, and/or competition to
hire and retain employees, the company's
ability to identify, execute or effectively
integrate future acquisitions, the company's
ability to successfully raise additional
capital, material changes in laws or
regulations applicable to the company's
business, and other risk factors discussed
in the company's filings with the Securities
& Exchange Commission. The company's
statements are made as of July 30, 2003, and
the company undertakes no obligation to
update any of the forward-looking statements
made herein, whether as a result of new
information, future events, changes in
expectations or otherwise.
Also, the entire content of today's call,
which is being recorded and simultaneously
webcast is a copyright of ManTech
International Corporation and may not be
reproduced in any form without prior written
consent. Now I would like to turn the call
over to George Pedersen for introductory
remarks.
George?
George Pedersen Good afternoon, everyone, and thank you for
joining us today. I'm very pleased to report
our second quarter results, which
demonstrate clearly that ManTech's strategy
is working on all levels. Simply put, our
record results are a reflection of the right
strategy, executed with discipline, in an
expanding marketplace. Our revenue for the
second quarter was up nearly 50% over last
year, evidence that we have chosen both the
right markets and the right service area, as
well as the right acquisitions to exploit
these market opportunities.
As we have anticipated, our DOD and
intelligence IT and technical service
support continue to be in high demand,
especially on classified programs that
require technical personnel with high level
security clearances. The acquisition of
nearly 1,000 personnel with such clearances
over the past year is paying dividends as we
gain traction as a leader in selected
segments of the intelligence and DOD
markets.
This was evidenced as ManTech also delivered
strong bottom line results. Earnings per
share rose over 55% to 28 cents over last
year's 18 cents. Similarly, operating margin
showed improvement, reaching 8.6% over last
year's 7.8%. Perhaps most important to our
future success, in the second quarter we
completed the integration of the four
corporations that we had acquired since last
August. Two of the transactions closed less
than six months ago. As announced in today's
release, simultaneously with the completion
of this integration we also have carried out
a consolidation and alignment of operations
to optimize our platform for growth. This
integration and alignment of resources
within ManTech provided the platform that
drove our success in generating record
revenue growth and profitability in the
second quarter. With this space of solid
execution in our operations today we are
also expanding our earnings and revenue
guidance to reflect this positive trend in
our confidence in the continuity of our
success.
I will come back to the significance of our
realigned platform later in the call, along
with other industry, market and budgetary
issues. But first, let me introduce Ron
Spoehel, our new Executive Vice President
and Chief Financial Officer to those of you
who have not yet connected with him. Ron
brings a wealth of experience to ManTech,
having served in a variety of senior
executive management positions. He has a
strong background in our industry as well as
extensive M&A and financial experience, both
on Wall Street and as an operating
executive. Ron has already made valuable
contributions to ManTech in his short time
with the company. He's the right person to
help ManTech grow to the next level and a
great complement to the current executive
team. I'm confident that you will feel the
same way as you speak with Ron and meet him
in the upcoming meetings and conferences.
With that, I would like to hand the call
over to Ron to provide more detail and color
to our quarter record quarter. Ron?
Ronald Spoehel Thanks, George, and good afternoon everyone.
It's really a pleasure to be on board as a
member of the ManTech team. In the short
time I've been here, I've certainly had my
belief reinforced that this is one of the
premier technology contractors for the
classified DOD and intelligence communities.
It's been a pleasure getting to know the
team and there's an extraordinary depth in
leadership talent and technical expertise
here at the company. Moving forward, I look
forward to meeting as many of you as
possible in the coming weeks while on the
road or in meetings here in Virginia.
Turning now to our second quarter. Our
record results and expanded guidance show
that ManTech has delivered on the promise of
our platform, built through recent
acquisitions and the consolidation of
operations we announced today. Our revenues
rose 48.6%, to $177.1 million, as compared
to the comparable period last year, and rose
19.5% sequentially. This was an organic
growth rate of 13% over pro forma revenues
of $156.7 million. There are current
operations achieved during the comparable
period in 2002. As noted in this afternoon's
press release, we have seen and continue to
see strong demand across our core growth
markets supporting national security
programs for the intelligence community and
the Department of Defense.
Our operating income increased 64.1% to
$15.3 million, as compared to the comparable
period last year. In this was growth of over
20% from the first quarter of this year. The
operating income margin was 8.6% in the
second quarter, up from 7.8% in the same
period in 2002. This margin improvement
continued to be driven by improvements in
operating efficiencies. For the second
quarter, net income reflected further margin
expansion, as it increased 82.6% to $8.9
million from $4.9 million in the comparable
period in 2002. Our tax rate for the quarter
remains at 40.6%. Our fully diluted share
count for the quarter was 32 million, and
earnings per share on a fully diluted basis
were 28 cents, an increase of 33% over the
comparable quarter in 2002 for continuing
operations. EBITDA increased 66.5% to $17
million, similar to the growth of operating
income. Free cash flow for the quarter was
almost $10 million. The net debt balance at
the end of the quarter was $4.9 million,
reflecting the efforts made to improve cash
collections and reduce receivables
outstanding at the end of the quarter. The
net debt balance was comprised of $25.3
million of total debt, offset by $20.4
million of cash and equivalents available.
Second quarter cash flow from continuing
operations was $10.5 million, and DSO
dropped to 77 days, an improvement of 11
days over the first quarter of this year, as
some previously reported first quarter
timing issues resolved themselves and there
was a concerted effort which focused on
improving the cash collection cycle. We have
also focused on strengthening our personnel
retention efforts and our second quarter
voluntary turnover rate remained under 15%.
We have also further focused our recruiting
efforts as we continue to see strong
potential for growth, especially in our
classified programs. The strong activity in
these areas is reflected in our report today
of recent contract awards and contract
expansions, with an estimated value in
excess of $250 million, including previously
undisclosed classified programs in excess of
$150 million. This total included our
previously announced State Department IT
modernization awards as well as Air Force
and Navy awards.
Our proposal activity remained quite active
in the second quarter. At the end of the
quarter we had over $700 million in
proposals under evaluation and a pipeline of
qualified opportunities in excess of $4.5
billion. Our total backlog increased at the
end of the second quarter to $1.5 billion,
with funded backlog growing to $342 million,
a 23% increase in funded backlog from the
end of the first quarter. Our calculation of
ManTech's GSA schedule contract value also
continued to expand, up from the first
quarter in the amount of $1 billion to $1.1
billion at the end of the second quarter, as
we continue to focus efforts on work under
these flexible acquisition schedules, with
their attractive margin opportunities.
Similar to last quarter, revenue from GSA
contract vehicles accounted for 39% of our
second quarter revenues, also similar to the
levels seen in our operations in the
comparable quarter of last year. Revenue
from DOD and intelligence community
contracts expanded to 88.7% of the total in
the second quarter, with all our federal
government contracts accounting for about
97% of revenues in the second quarter. We
continue to serve as prime contractor in
over 90% of our work, as we continue to seek
the greatest degree of direct control over
program management as a means to enhance our
growth potential. Our cost-plus contracts
accounted for only 35.5% of our revenue in
the second quarter, continuing the downward
trend as the company expands its
opportunities for margin improvement under
time and material and fixed price contracts.
We also believe that critical classified DOD
and intel community programs will enjoy
priority status in the federal budget
process, and we have not only focused our
efforts in these markets, but also, as
announced today, we have consolidated and
aligned our operations to most effectively
address these ongoing opportunities.
We have now completed the integration of our
four recent acquisitions, and have
operationally consolidated to focus on key
national security solutions and defense
systems for our intel and DOD customers,
while continuing to provide enterprise
support systems for federal agencies. Our
national security solutions group has
consolidated 6 business operations into 3
core operations, focusing on mission
critical systems development, security, and
intelligence operations, while our new
defense systems group realigns the activity
of our DOD related operations to target DOD
armed services customers. With the strong
performance of the company in the first half
of this year, the realignment and
consolidation of our operations as we
completed acquisition integration and the
opportunities evidenced by positive trends
in our core DOD and intelligence community
markets, we have expanded guidance as
announced in this afternoon's press release.
For the full year 2003, we are projecting
revenue of $695-705 million, an increase
from the previous $680-690 million level.
Based on 32.1 million fully diluted shares,
we expect fully diluted EPS for the year to
be between $1.07 and $1.09 per share, an
increase from the previous $1.03 to $1.07.
For the third quarter, our guidance is for
revenue in the range of $180-184 million,
with 32.2 million shares. EPS then is
between 28 and 29 cents. This guidance is
reflective of the strong growth we saw in
the second quarter. Looking toward 2004, we
remain confident that we have the right
focus and the positive market momentum for
our industry and for ManTech in particular,
this will continue. Let me wrap up by saying
I'm extraordinarily pleased to be on the
ManTech team. I look forward to your
questions today and also to meeting many of
you in person in the coming weeks. At this
point let me turn it back over to you,
George.
George Pedersen Thank you, Ron. Looking forward to the
balance of the year, and into 2004, I would
like to cover a couple of key issues that
will be impacting our industry. First and
foremost is the appropriations process.
Congress is just now leaving for summer
recess, but the lawmakers have made progress
on key spending bills. All indications
suggest that the DOD appropriation process
for 2004 is on track. We do not see any
substantial delay coming beyond 1 October
2003. This is good news. This is critically
important to our industry and ManTech in
in particular as we derive most of our
revenue from this appropriations bill. The
passage in the Senate and the House of
preliminary Department of Homeland Security
spending bill is also a positive sign. Both
the DOD and Homeland Security bills still
need to go to conference and eventually
to the White House, but all seems to be on
track. I'm less optimistic about some of the
other spending bills, but I see no
indications at this time that we will have
continuing resolutions for the civilian
agency spending bill extending into the next
year as we did last year. While these
bills may not be completed on 1 October, the
situation should be much improved over last
year.
Much will depend upon the political
environment upon Congress's return to
Washington. I am also confident that the
budget trends we saw this year will continue
into 2005. Although our industry saw some
challenges recently, the temporary cut in
the IT budget in the House defense bill and
some new A-76 language, the overall trends
are very positive. The bottom line in our
view is that Department of Defense and the
intelligence community will continue to need
more and more contractor support for IT and
key technical services in the coming
quarters. ManTech's strategy is to deliver
the highest quality of support to make sure
we expand where we currently operate as well
as penetrate new areas through marketing and
eventually more acquisitions.
As Ron and I have mentioned earlier, we are
pleased to announce the completion of the
integration of the four acquisitions. What
matters most is that we have integrated
business development and operation with a
matrix structure that allows alignment
according to customer needs and functional
expertise. We will also see operating
efficiencies in this integrated platform,
but the main focus will be on winning new
business and expanding existing programs in
new directions. An example of this success
came at a recent contract award in support
of Air Force's 21st Spacelink, a new area of
work for us that would not have been
possible without the joint skills and
experience of an established ManTech
business unit and an acquired entity.
Indeed, the concept of joint operations has
proven so successful on a battlefield in
Afghanistan and Iraq, it is a directive we
are following within ManTech.
Also notable in the quarter was the $88.6
million State Department prime contract link
in support of the worldwide systems fielding
program. This will expand the scope and
scale of our previous work. Our new
integrated joint platform is already
delivering solid internal growth as Ron
pointed out earlier, 13% over 2002 on pro
forma basis.
Finally I want to address the strategy going
forward. Expect more of the same. Focus on
internal expansion and continued targeting
of high growth market [measures], especially
DOD and intelligence community classified
programs. There are many areas that remain
of great interest to us -- Air Force space
operations, missile defense, just to name
two priority areas. We will consider new
acquisitions as we approach 2004, but as I
mentioned in the last call, we don't expect
any to close in this calendar year. However,
we are beginning to look at acquisitions
again. We are back in the hunt. Our strong
balance sheet gives us maximum flexibility
and financing options. We will take our time
and apply discipline to make sure we have
the right fit for ManTech. Our current
platform is very strong so we will be
extremely selective.
In summary, through the integration
alignment of resources within ManTech, we
had record revenue growth and profitability
for the second quarter. Operation margins
were solid and the balance of the year looks
bright. So we are increasing earnings and
revenue guidance to reflect this positive
trend and our own confidence. Our employees
performed superbly as always in this
quarter. They deserve credit for strong
results. Our strategy is on track, these are
good times for our industry and ManTech.
Let's begin the questions now.
Peter LaMontagne Okay, Matthew, we can go to questions and
answers, then, please.
Operator Certainly. At this time I would like to
remind everyone if you would like to ask a
question, please press star, then the number
1 on your telephone keypad. We'll pause for
just a moment to compile the Q&A roster.
Your first question is from George Price
with Legg Mason.
George Price Thank you, very much, good afternoon,
congratulations on a very nice quarter.
A couple of questions. First, on the
guidance, revenue guidance, at least
relative to our expectations, look
particularly strong. You know, EPS, the top
end of the range, only going up, I believe,
a couple cents from the prior
range, even though, you know, outperforming
in the quarter. Could you maybe
help me understand that a little bit more,
maybe in terms of the margin expectations
in the second half?
Ronald Spoehel Yes, what I would say is if you look
at the progression going forward, the
guidance continues in the range of roughly
12-14% on full year organic growth, and
margins continuing the 8.5-8.6%. So, it's
consistent with the growth of the company to
date, and where we've tracked.
George Price Okay. And you did disclose the growth
this quarter. I'm not sure that you did -- I
don't think that you did last quarter. Have
you gone back -- are you willing to disclose
what the organic growth was in the first
quarter?
Ronald Spoehel It was slightly above where it was in the
second quarter.
George Price Okay. And just interested if what you're
seeing in demand and spending trends
in DOD, obviously you've talked about the
strength of defense and intel-related. Are
you seeing anything in terms of trends given
the status of the conflict in Iraq? Is
spending moving around anywhere anticipated
to move around anywhere differently as a
result of things at least seemingly to wind
down there?
George Pedersen Our impression at this point in time is that
the DOD at this point has all of the funding
they need. Whether that continues that way,
I don't know. I think you know there are
numbers thrown around that they're spending
in the band of $4 billion dollars per month.
That may be a little bit low. The current
number for the president's request for next
year is $372 billion. By the time they
add the energy and the construction money,
it will be the $400 billion that everyone
has talked about. And I don't believe there
will be any shortage of money. They
obviously move it around, but I don't see
any shortage of money.
Peter LaMontagne And then with regard to sort of where the
operational focus is right now and
how that's impacting industry and ManTech in
particular. Secretary Wolfowitz, I think
yesterday in testimony or Tuesday in
testimony before Congress, highlighted the
fact that right now, the global war on
terrorism is focused on the operation in
Iraq and we don't see that slowing down.
And as was stated before, we do have
substantial presence in the region, so the
degree that that activity continues, we will
continue to support that. That said,
remember that there continues to be
activities in Afghanistan, and we are active
throughout the region in central Asia as
well as in the Gulf area. I would also state
that remember that behind in supporting the
active operations by the intelligence
community and the military overseas in those
locations, is the processing, dissemination
and analysis that goes back -- that goes on
back at locations in the United States in
support of that. ManTech also has a
substantial amount of work in support of
those efforts. So the increased
operational activity that we see on the
ground in places like Iraq and
Afghanistan is also reflected in activity
that we see here in the United States
in the headquarters elements of those
components.
George Price Great, thanks very much.
Operator Your next question is from Joseph Vafi with
Jefferies.
Joseph Vafi Hey, guys, good afternoon, great results and
great cash flow quarter.
George Pedersen Thanks, Jeff.
Joseph Vafi Yeah. I was wondering, to the extent that
you can, you know, really nice surge
in bookings, especially in the classified
awards. I know you can't talk a lot
about what's going on there, but any color
on the types of contract vehicles
we're seeing at least in terms of how they
affect margins, P&L, and also if
the types of contract vehicles you're seeing
are potentially longer term than
they've been in the past, kind of reflecting
a mood and outlook by the DOD
that we're sticking -- we're in this for the
long-term?
Peter LaMontagne Sure. I think the first point is that it is
a combination of the unannounced
classified work, is a combination of
expansions on contracts and some new
work. And as was said before, we do see
in the intelligence community in
particular in the classified world, a mix
of contracts. The mix is generally
reflective of what we see across our
company, but with one exception, and that
is our cost plus contracts in the intelli-
gence community tend to be close-plus
award fee, where we earn margins that are
more in line with the margins that
we see on our time and materials and fixed
price contracts outside the
classified arena. So we're seeing a nice
mix, and I'd say it's generally
reflective and supportive of the type of
margin expansion that we saw year on
year in this quarter. Compared with last
year's quarter, that is. In addition
to that, with regard to the long-term versus
short-term, we also had some of
the expansions on these were part of
long-term programs, some of them were
brand-new starts. We see a variety of
vehicles, we still do not see a strong
prevalence of GSA activity within a lot of
our classified programs, but we
believe the vehicles that are being used are
similarly flexible and allow us
to earn solid margins as we demonstrate our
performance for our customers.
George Pedersen On contracts and margin shows, all good
news.
Joseph Vafi Right, absolutely. Then one quick
question here. I know you were talking about
some efficiency gains and we kind of clearly
saw some of that occurring as G&A dropped
substantial revenue in the quarter.
Ronald Spoehel Correct.
Joseph Vafi Kind of any feel, moving forward, how
much more efficiency gains you think we've
got here, moving forward, you know, over the
next, you know, couple quarters?
Ronald Spoehel I think on that, Joe, what I
probably can say at this point is we will
continue to look for those. I'd rather defer
how much I think we can get until I've been
here slightly longer and get a feel for what
efficiencies can be brought into the system.
Joseph Vafi Okay, fair enough. And then finally,
you know, nice cash flow quarter here on the
operational side. Any thoughts here -- I
know, George, you're saying you're not
really in the market to be buying -- doing
any more acquisitions maybe in this calendar
year. Is that cash balance going to be put
to use maybe bringing the debt down or
anything else you might be doing with it?
Ronald Spoehel During this year, Joe, I wouldn't
expect that we would bring down the debt,
because, as you may recall, the $25 million
of debt is left there because we have a swap
that's in place against that. So it's really
there because we don't want to break the
swap.
Joseph Vafi Great, fair enough.
Ronald Spoehel In terms of the using the cash, we
obviously are in this position deliberately
so that we can do additional acquisitions.
We are back in the hunt. We are
beginning to talk and look at opportunities.
We will be very selective in
terms of margins and potential growth and
in all of these things it will take
us some months to complete due diligence
and evaluation. So, the activity is
going forward aggressively, but I don't
expect us to close one before let's
say the first of the year.
Joseph Vafi Thanks a lot, and again, great results.
George Pedersen Thank you.
Ronald Spoehel Thank you.
Operator Your next question is from Brett Manderfeld
with Piper Jaffray.
Brett Manderfeld Good afternoon, guys, and my
congratulations as well.
Peter LaMontagne Thanks, Brett.
Brett Manderfeld Organic growth, Ron, I think you
mentioned 13%. Does that include the
acquisitions in that number?
Ronald Spoehel Yes, it does. That's the overall
portfolio of operations we have as a company
now, compared to last year. So if you took
the $177.1 million, against last year's
$156.7 million, that's what the revenues for
all our operations were during that period
last year -- would have been during last
year on a pro forma basis. We're trying to
give you apples to apples.
Brett Manderfeld Good. If you break those apart, I don't
know if you want to break out, you
know, the actual percentage in the core
versus the acquired companies, but can
you give us a sense for the growth whether
one was growing faster than the
other? Thanks.
Ronald Spoehel I don't have the breakout
specifically between those, but I think as
we've talked about before, the acquisitions
have grown at a slightly higher rate than
that. As the company had indicated
previously, it was targeting for its
acquisitions, so this is something, the plan
the company put in place and it is being
executed, too.
Brett Manderfeld Okay.
Peter LaMontagne It's Peter, let me add to what Ron said
there. What we can say specifically is
that we are seeing strong growth in those
areas that we've highlighted, you
know, the security-related work that Aegis
Research did in the past, as well
as the background investigation work, and
the areas and the secured systems
and IT solutions, particularly as it
relates to security is we're seeing
strong growth there.
Brett Manderfeld Okay, excellent. And in terms of
the $250 million dollars in recent contract
awards and the expansions, is that in the
last quarter or is that over some other time
period?
Ronald Spoehel It's roughly in the last quarter.
Some of the issue, as you know, is when the
awards occur versus when we can announce.
They don't always match exactly on dates,
but that's roughly the last quarter.
Brett Manderfeld Okay. And one final question for
George, you mentioned A-76. I was hoping
that you could expand on your thoughts on
that area in general and how it might affect
your business going forward. Thanks.
George Pedersen We have never been a large A-76
contractor. Obviously, there are changes
ongoing there in some of the agencies, as
you know. I know the industry is working
very hard to deal with those issues, but I
don't want to comment because it really
doesn't impact ManTech very much one way or
the other.
Peter LaMontagne And Brett, I think -- this is Peter. The
other good news is that although the
president has -- you know, they've backed
off on the quotas for how much
they're going to outsource, the trends
toward outsourcing are very strong, and
then with regard to the amount of
competitions and the A-76 studies, as George
highlighted, we don't see those impacting
our business and we think it's going
to continue to be in those mission critical
areas that the government needs to
outsource, they're going to continue to do
so.
George Pedersen There was a recent article written by the
Secretary of Defense, I'm sure you
read it in the Post, and he talked about
the problem of trying to get U.S.
government civil servants on the
battlefield, and the rules and regulations
that have to be addressed in trying to
make that happen, as opposed to calling
upon contractor support. And in many
respects, I think that's become the
driving issue. So there will, in my
judgment, continue to be significant
outsourcing as we go down the road.
Peter LaMontagne Matthew, we're ready for the next question.
Operator Your next question is from Tom Meagher with
BB&T Capital Markets.
Tom Meagher Yeah, once again, congratulations on a
really solid quarter there. George, I
was wondering if you had any comment,
reference the announcement yesterday
that Affiliated Computer Services is
looking to divest its federal government
operation in favor of acquiring a
commercial IT services unit reportedly from
Lockheed. I was just wondering if you have
seen any competitive implications
there as it regards the commercial IT
systems integrators and consultants and
their effort to increase their federal
sector presence? In other words, would
you view this as essentially a one-off
transaction or perhaps the start of
some sort of a trend? Thank you.
George Pedersen I don't know if it's start of a trend.
I know that there were rumors around
going back some number of months that they
were considering doing this.
Indeed, we made some probes with that
organization. I don't know -- I tend to
see it the other way. I tend to see more
people looking for defense-oriented
business, because of such tremendous
opportunity. I can't judge why they made
that decision and I can't -- I don't have
the sense that others are trying to
accomplish the same thing.
Tom Meagher Okay, thanks very much. Congratulations on
the quarter.
Ronald Spoehel Thank you.
Operator Your next question is from Sandra
Notardonato with Adams, Harkness & Hill.
Sandra Notardonato Maybe some day they'll get my name right.
[LAUGHTER]
George Pedersen Sandra is a good name.
Sandra Notardonato Thanks, George. I guess I have a
follow-up to the acquisition question. I
know that you're not talking about doing
anything before the beginning of next year,
but it sounds like you're in the marketplace
again, looking at some companies.
George Pedersen Yes, we are.
Sandra Notardonato Can you give me a sense if
valuation has changed at all since the last
round of acquisitions you made?
George Pedersen I don't think so. I think the numbers that
we paid and the formulas we used
for us are still valid, and you've heard us
say before that the recent
acquisition of Veridian by General Dynamics
more than confirmed the prices
that we paid. So I think we're in the same
band, and we're talking to --
beginning to talk to some people. I haven't
yet had someone put a price on the
table so I can't tell you from our
experience any recent changes.
Sandra Notardonato Okay. And one of the things that
I've been thinking about as your company
approaches the law of large numbers, so to
speak, is what are you doing to position
yourself to better compete for the much
larger-sized contracts in the marketplace as
a prime contractor? What types of changes do
you need to make as an organization to be
able to better compete for those?
George Pedersen That's what we did in this consolidation.
In the NSSG group we took six
organizations and essentially consolidated
down to three, much more focused,
much more ability to pull the skills for
one group, learning about one another
and doing all of those natural things. In
terms of the size, we obviously
drive toward $1 billion dollars in 2004 as
an objective, and I think we will
be large enough to be a serious competitor
going down the road, as we have
been. So I see refinement rather than major
change.
Sandra Notardonato Does that require refinement to the sales
organization as well?
George Pedersen What we are doing is looking at the
ability of the marketing teams and those
acquired companies to sell across the
corporation, as opposed to their own
organization. And you've heard us say in --
on a number of occasions, we've gotten
programs that we wouldn't have gotten in the
core ManTech units.
Sandra Notardonato Right.
George Pedersen So the marketing organizations, not
only the marketing organizations, Sandra,
the executives now know the skills in these
other organizations and that, going forward,
I think is crucial and we're seeing that
happen.
Sandra Notardonato Okay. Can you notice any change
on the margin on your win rate based on the
changes you've made to the sales
organization, or the more efficient, as they
become more efficient have you noticed a
change on the win rate?
George Pedersen I'm not calculating it that way and I'm not
looking at some percentage in that
manner. I'm just looking at what we're
going after, the things we're pursuing
at this point in time. Remember, we only
completed the last acquisition, what
is that, four months ago? Say it's four
months ago, so I see it in the
opportunity list that comes in front of me.
And the larger size opportunities
we're now looking at, and the mixed skill
opportunities we're looking at. It's
all good news again, it really is.
Sandra Notardonato Great. I missed the contract mix number
Can somebody share that with me?
George Pedersen I think it's -- rather than giving it off
the top of my head, let me have Ron answer.
It was 35.5% cost-plus.
Ronald Spoehel Is that -- which -- you would like
the cost-plus was 35.5%, time and materials
46.3%, and fixed price 18.2%.
Sandra Notardonato Okay, and did you give a headcount number?
George Pedersen It's about 4800 people.
Sandra Notardonato And more than a thousand with security
clearance, that right?
George Pedersen Oh, yes.
Peter LaMontagne Recently, with the government has
become more sensitive about our putting out
there our specific numbers of cleared
personnel. But I will tell you that our
numbers have increased, the cleared
personnel have increased substantially with
our acquisitions.
Ronald Spoehel It's well over half.
Peter LaMontagne Well over half, absolutely.
Ronald Spoehel I believe you knew the numbers before.
Sandra Notardonato Then my last question is on the
intelligence spending. I know it's a
classified number, but can you share what
your thoughts are in terms of what the
intelligence spending market will look like
in 2004, in comparison with what the talk
was in 2003, and what IT will represent as a
percentage of the total?
Peter LaMontagne Sure. I think -- Sandra, this is Peter.
I think there's some strong trends and
generally speaking, because the
intelligence community budget is of course
classified, it's very difficult to get
data. But I think that when you're
talking about the President's sort of
intelligence budget which refers to the
sort of the traditional intelligence
agency, three letter agencies, most
analysts, both sort of industry that focus
on this here in the beltway area,
do estimate that things grew from $35
billion to about $38 billion, and I
think that's been quoted by a number of
folks. Now, I also happen to agree
that a sort of double-digit, certainly 10%
increase on that, would certainly
be within reason. Maybe even more.
And remember that the notion of joint
operations now between the traditionally
sort of civilian intelligence agencies like
CIA, and others, with the military
operations that we're seeing in central
Asia, Iraq, as well as in other areas around
the world, is remarkable. So the joint
operations budgets that are coming through
the traditional DOD budget are also
increasing. So overall -- and what all of
those new operations require is spending on
C4ISR programs as well as IT, because at its
fundamental core, those type of joint
operations are information technology and
communications problems or challenges --
making sure that you have secure commo on
the ground, making sure that you're getting
data to the war fighters as quickly as
possible. So shifting from that double-digit
growth in the intelligence budget over to
the IT spending, we also believe that the IT
spending is going to be significant, and
it's going to continue. We talked a little
about the proposed cut in the task on that.
But really we think that's going to play out
and the numbers that we saw of about $30
billion on DOD IT, spending is we think at
the end of the day going to come through.
Sandra Notardonato Okay.
George Pedersen One other thing. As you know, the
State Department is one of our customers in
our sense, and an agency like that, there's
a recognition of the money they have to
spend and a good bit more is coming their
way in appropriation.
Peter LaMontagne I think according to input you had about
$60 billion in IT-related contracts,
in '02.
George Pedersen One other thing. There may be some
internal changes. I think you're aware of
some of the reviews ongoing in the way NSA
spends its money, and changing the approval
authority back into the Pentagon. I don't
think in the long run that's going to make a
lot of difference, but the process may be a
bit different.
Sandra Notardonato Process may be longer or just different?
George Pedersen Just different.
Sandra Notardonato Okay. Thank you, and great quarter.
George Pedersen Thanks.
Operator Your next question is from Chris Penny with
Friedman Billings and Ramsey.
Chris Penny Hi, thank you very much. Quick
question. I may have missed this in your
prepared comments, but gross margin was down
sequentially, can you give us the reason for
that?
Ronald Spoehel Primarily ODCs. As you know, we tend
to look at things on an operating margin
basis and things float around between the
two levels, but primarily ODCs.
Chris Penny I wanted to make sure that's what that
was due to. And if -- when you mentioned the
$250 million of contract awards, apples to
apples comparison, what was it in the first
quarter?
Peter LaMontagne Yeah, rough numbers, we had I
believe approximately $200 million in the
first quarter. It was on par, a little bit
increased. Chris, this was -- you know, we
released this for the first time, we got
approval on some of the classified stuff. So
it's tough to do pure apples to apples for
the quarter to quarter, but roughly $200
million-plus.
Chris Penny So bottom line is that you've seen a little
bit of acceleration of those signings?
Peter LaMontagne That's correct.
Chris Penny Okay. And I'm going to pressure you a
little bit on kind of looking forward a
little bit more. I think the current
consensus right now for revenue for next
year is $781 million. The middle end of
your range for revenue, that applies
about 11.5% growth over next year.
Organically, you grew 13% and I think you
said in the past as you integrate some of
these recent acquisitions, we should
start to see a little bit of an uptick
in the organic growth rate. Can you
talk a little bit about that?
Ronald Spoehel I think on that we stated for what we were
coming out with guidance for the
balance of this year, on the range, the
range of guidance for the rest of this
year and what you mentioned, where things
were for next year, would indicate
that it will move up for next year.
Obviously we're going through our budget
process, as others do at the ends of
August, and things come out later in the
year. So we're not yet -- or I'm not yet
in a position to give you more
specifics on next year, but there's no
reason to believe the trends that we
see now would be substantially different.
Chris Penny Right, I mean in your press release
you talked about you continue to see
favorable spending which will sustain your
growth well into 2005.
George Pedersen We've said that before. We can see
out through 2005, then you'll have a change
in the Congress and a national election, as
you know.
Chris Penny Okay. And then from the sense of just
steady state margin improvement, kind of
looking beyond. Where are some of the
efficiencies long-term going to come from?
Is it coming from just better performance in
some of your acquisitions, or from the
contract mix, a combination of both? Can you
talk about that a little bit longer term?
George Pedersen It is a combination of both. As you know,
we continue to focus on those GSA
contracts and the better margins. GSA
continues to be about 39% of our
funding source. There is just getting to
be better margins in the areas that
we are in because the marketplace
particularly in the acquisition marketplace
we've gone into, allows for better margin.
Some of our traditional customers,
and I don't want to name one or the other,
have tended to want to have
contractors at lower margins, so there's
a combination of factors in there
that are all pointing up.
Ronald Spoehel I think in addition to that is that
we continue to grow, we also get some
benefit from better cost absorption.
Chris Penny Okay, thank you very much.
Operator Your next question is from Cynthia Houlton
with RBC Capital Markets.
Cynthia Houlton Hi, good evening. I just want to
clarify, I know we talked a little bit about
the organic growth, but I guess it was my
understanding that last quarter was actually
10%. I know you don't want to disclose
specifically but the range was given
consistent with prior levels. Did I have
that wrong? Last quarter was actually
slightly higher than this quarter. I want to
make sure I understand.
Was it 10% or 13+%?
Ronald Spoehel It was actually 13+% last quarter, when the
company -- this is before my time,
as you know, Cynthia, but last quarter,
when the company talked about that as
a general concept, it hadn't put together
the information on a pro forma basis
for the prior year. So we're giving you
here is a set of -- our set of
portfolio operations and what they actually
grew for those periods in disclosing that
now.
Cynthia Houlton Okay. I guess that's an important
clarification. And then on just looking out
on outlook, as you look at some of the
deals that you're bidding for. Can you
give us a sense of, you know, are there
a lot of megadeals in there, or are
those kind of a mix of different size
opportunities? Just, you know, ManTech
with the combination of all these other
entities, you know, in general how do
you see kind of opportunities you're
going after? You know, can you give us
kind of a range of what the size of the
opportunities are, are you moving to
larger ones or still a mix?
George Pedersen We go to whatever the market offers up.
Certainly, in the $100-500 million
range, we've been there for a long time.
We're looking more and more at the
billion-dollar opportunities, but as you
know, when you get to the
billion-dollar opportunities, very often
they're kind of an indefinite
quantity number, they hang out there. But
we're certainly moving up the price
range of what we can bid for. And as you
know, we've always effectively used
the non-populated joint venture when a
program got to a level. Let's say
someone came in tomorrow with an
opportunity at $5 billion. If we felt we
couldn't handle that we simply would put
together a non-populated joint venture
and go pursue it.
Cynthia Houlton Finally, are there any contracts coming to
an end that we should -- that are material
over kind of the next --.
George Pedersen Nothing that has a material impact.
Cynthia Houlton Okay, thank you. Congratulations on the
quarter.
George Pedersen Thank you.
Operator Your next question is from Joy Mukherjee
with AG Edwards.
Joy Mukherjee Good afternoon, I'm stepping in here for
Mark Jordan. Most of our questions
have been answered. Just some small
questions as part of the modeling. In
terms of interest expense, why -- what was
the reason for the sequential increase?
Hello?
Ronald Spoehel During -- sorry, this is Ron. I
needed to get a little clarification on
that. Actually, during the quarter, there
was some borrowing under the revolver during
a few periods.
Joy Mukherjee Okay, so do you, modeling forward, would
you expect that to be kind of in the first
quarter levels again?
Ronald Spoehel In the first quarter levels, yes.
Joy Mukherjee Okay. And how about the other income line?
Ronald Spoehel Consistent with where it's been.
Joy Mukherjee Okay. That's all I have. Thank you.
Ronald Spoehel Thanks, Joy.
Operator Your next question is from Tim Quillen
with Stephens, Inc.
Tim Quillen Hi, a couple of questions here. One, back
to margins, how should we look at
this over the next couple quarters. Should
we look at second quarter's
operating margin and model a certain amount
of sequential improvement? Over
the past couple of years, third quarter has
been especially strong, should we
model versus third quarter of last year?
What should we look for over next couple
quarters?
Ronald Spoehel Consistent with our guidance, that
we mentioned, of the $180-184 million, the
operating margins with that would be in the
8-8.5% or just over that range. So I think
consistent with where we've been is probably
a good place to be.
Tim Quillen Okay, so consistent with the second quarter
in both the third and fourth quarter?
quarter?
Ronald Spoehel I think that's fair at this point.
Tim Quillen Okay, fair enough. Second, on the
funded backlog which is not something we
necessarily key on a lot from ManTech, but
when funded backlog has gone up a lot,
especially since the end of the year, I just
wonder if there's anything specifically
that's driving that, or what is going on
there.
Ronald Spoehel I would say it has gone up even in
the quarter, but it's been -- it's
consistent on a pro forma basis with the
percent of revenues. So we're staying in the
upper 40s in terms of the revenue level,
funded backlog. So I look -- I would call it
fairly consistent with the performance of
the company.
Tim Quillen Okay, and then on the $150 million
dollars of undisclosed classified work, can
you give some kind of ballpark range as far
as what that means in terms of annual
revenue?
Peter LaMontagne We really can't map that out for
you, Tim, as far as how to break it down for
annual because it is a combination and when
it comes to classified contract wins,
they're trying to prevent you know, the
individual items coming together to reveal
precisely those type of details. But I would
say that it's consistent with the other
blend of our business.
Ronald Spoehel Right, nothing inconsistent that we
see there that would cause us to change
something just because of those.
Tim Quillen Okay, fair enough. And then lastly,
the IDS integration happened a little ahead
of what I expected, I'm just wondering if my
expectations were correct and if it's ahead
of schedule, why was it moved ahead of
schedule?
Ronald Spoehel I think, as you know, and with the
experience on acquisitions, the extent you
can move forward on integration and
achieve those benefits early, you do. And
I would just say here, upon coming on
board, I commend the team for really
focusing the effort and getting it done
ahead of schedule and being able to
implement the realignment of operations
ahead of when we might have been otherwise
able to.
Tim Quillen Okay, thanks, guys, nice quarter.
Peter LaMontagne Thanks.
Operator Your next question is from David Garrity
with American Technologies.
David Garrity Hi, also I add my congratulations to you
all for a great quarter.
Peter LaMontagne Thank you.
David Garrity Just a couple of things. The organic
growth rate, certainly appreciate the
clarification on that relative to not
only what you had in the current quarter
but also what you had in the March quarter.
If we look at what you're doing in
terms of your backlog growth, can we see
sort of further acceleration organic
growth up towards say the upper end of this
13-15% range that some of your
peers talk about? And second question that
kind of goes along with that, if we
look at the new orders that you brought
into the quarter, is there an average
life associated with those, and is that
average term of those awards longer or
shorter than what you've had historically?
Peter LaMontagne Okay, let me try to go back through those.
In terms of the growth of the backlog over
time --.
David Garrity No, I was actually talking about organic
growth. First off, two questions,
really. First off, organic growth, peers
have a range of 13-15%. You're at the
bottom end of the range. To what extent
do you think you can accelerate to the
upper end of the range? Part of the
question goes in and asks with respect to
looking at the backlog addition you have
in the current quarter of roughly
$250 million, what's the average life on
that? Is it four and a half years, is
it four years, is it five years? Is it
above or below what your average life is on
your backlog?
Ronald Spoehel Right. The burn on overall backlog, I have
to admit, I don't have a personal
feel for the details on that, but I think
in the three to five year range is
probably fair. In terms of the organic
growth rate, moving up, clearly that's
what we're going to look to do. But in
terms of where we have guidance at this
at this point, it is 12-14%, so we're in
the same range, but not being quite
as aggressive.
David Garrity Okay. And then last question would
have to be, as you are looking at
acquisitions in the first quarter of
calendar '04, are your thoughts that you're
basically going to try to maintain pricing
in the same range that the company has paid
historically?
George Pedersen Yes.
David Garrity Do you see any reasons to change?
George Pedersen There's no reason to change but
obviously each one depends upon the
circumstances that are there. They must
bring new technical skills and new people
skills, new geographic locations, and new
customers, and preferably all of those. They
have to have margins above ours, and
potential growth above what we have been
running.
David Garrity Given the appreciation of the stocks
in the sector, do you see any change in the
conversations that you have of people's
preference for cash stock mix in terms of
acquisition?
George Pedersen Up to this point in time, we have
done all of ours for cash, and obviously we
have a currency other than cash to use now
that we didn't have before. When we went
through the first four, there was a bit of a
fear factor, if you might, among the
entrepreneurs, about stock. That may well
change and we would love to use our currency
other than cash if that's what's there.
David Garrity Thanks.
Ronald Spoehel I think another way to put that in
perspective is as we go forward and look at
the capital structure for the company
and what would be appropriate, as we
expand, that will determine somewhat what
in a sense what currency we use. I
don't, from my experience; I don't get too
caught up in what the currency for
the acquisition is in particular. It's
more after the acquisition in looking
at the capital structure of the company on
a going forward basis, what's the
optimal mix.
George Pedersen Right now, our financial structure is
very strong, our equity and we have no
debt, basically.
David Garrity Very good, thank you.
Operator Your next question is from George Price with
Legg Mason.
George Price Thanks, just had a couple quick
follow-up questions. First, I wondered if
there was any update you could provide us on
some of the proceedings that are under way.
Peter LaMontagne Yeah, thanks. We, at this time,
we can reassert what was said earlier about
our proceedings. We have no substantive
update. We expected these to take a long
time to sort through, but I can assert again
that the company's position is that we
believe that none of these issues will have
a material adverse affect on our operations
or our finances.
George Price Okay, terrific. And I guess, would like to,
George, maybe ask you a little bit more
along the lines of Department of Homeland
Security. You know, continue to
see things get pushed out a little bit,
and I noted that you talked about that
there are signs things are finally gearing
up. But when, I guess, do you think
that we're really going to see some of
the bigger procurements finally make it
out that people have been talking about?
George Pedersen It's a bit hard to say. I think you know
the House approved $29.4 billion and
the Senate is about $28.5 billion, so the
numbers are there for what the
current plan is. Some of the major
procurements that they were contemplating,
IT and others, have been pushed out a bit.
We have focused not so much on the
Homeland Security Department itself, but
we have focused on functions in
states. New York City, as you know, is a
major target of ours, and that money
would have to flow to those organizations
through FEMA. I don't have the sense
that FEMA is getting the kind of funding
that it received shortly after 9/11.
As you know, the president, I think at
first sent $5 billion out there and
then an additional, maybe additional $5
billion dollars. We are looking at
Homeland Security, we're prepared, we're
competing or planning to go compete
for some of these organizations. I don't
have anything in the backlog yet,
sir. And it's not that I'm not optimistic,
but I want to see it flow first.
George Price Okay, fair enough. And I guess last
question, not to kind of beat a dead horse,
but I'm wondering if maybe you could, Ron,
break out for us what the revenue component
for the acquisitions were in the quarter?
Ronald Spoehel I'm not in a position to do that for you,
at this time.
George Price Okay. Okay, thanks again very much for your
time.
Ronald Spoehel Certainly.
Operator Your next question is from Chris Penny with
Friedman Billings and Ramsey.
Chris Penny Thank you. One follow-up question, a
little bit of a different twist. As you
integrate your acquisitions and you build
your services out within the intelligence
agencies, talk about the trend of work with
onsite work versus offsite work over kind of
the coming years. How much do you see that
transitioning maybe where you're doing more
work offsite?
Peter LaMontagne Very good question, Chris, because there
is a challenge within the
intelligence community. Because so much
of the work is highly classified, it's
difficult to do work in the contractor
station, necessarily and get the
necessary approvals to do IT software
development, for example. We're
fortunate in that a few of our components
within the national security
solutions group do have the right type of
facilities and connectivity that can
enable that. So the degree that it makes
sense for the customers, which is
always how we're driven by what we do
onsite or offsite, we will follow the
lead by the customer. So much of what
we've been involved with in the past
year has had an operational and sort of
a real time live spin to it, that
we've most of the time been on-site side
by side with the customers. That
said, we will be open to opportunities
where we can take work and do it in
secure facilities that are in our own
companies, but again we will take the
lead from the customers on that. And we
don't see any major trends one way or
the other right now.
George Pedersen We have sufficient SCIFs within the
company and that's not a deterrent to our
having work in-house. It's all, as Peter
said, driven by the desire of the customer.
Chris Penny Okay, thank you very much.
Operator Your next question is from James Cappello
with Kern Capital.
James Cappello Good afternoon, gentlemen.
George Pedersen How are you, sir?
James Cappello Doing well, doing well. One
question regarding your focus within the
intelligence community and how you're kind
of not really in the meaty part of homeland
defense. However, are you guys involved at
all in the Coast Guard initiative called
Spirit? And what's your role there?
George Pedersen Yes, we are, sir.
Peter LaMontagne Yeah, the Spirit contract, as you know is
originally a Coast Guard initiative
which has transitioned to a DHS-wide
procurement. Our understanding is that
that has moved slightly to the right,
toward the end of this year, early next
year. But this is a multiple award, IDIQ,
in several functional categories as
well as several contractor categories and
we certainly anticipate
participating on multiple levels of the
contractor side as well as multiple
function areas.
George Pedersen We were quite prepared to go after
that and then they delayed it and we don't
yet know how that is tied into the
integration of the whole Homeland Security.
The only thing we will tell you that the
Coast Guard, among those agencies, will be
well funded and well managed as we go down
the road.
James Cappello Okay, and it's one follow-up with the INS
entry exit, do you have any place there?
Peter LaMontagne We have had a past relationship
with INS. And we have some current proposal
activity and [inaudible] extension. Of
course we can't comment on current
competitive procurements. But we do have a
tradition of working on programs with INS
and hope to leverage those and grow
additional work in the coming quarters.
James Cappello Okay, thank you.
Operator At this time there are no further questions.
George Pedersen Before we sign off, as I always do, I'd
like to take a moment to remember
there are still a lot of Americans in
harm's way and you all read the
newspapers of the young soldiers that are
dying. Both contractors and men and
women of the military, the intel
community, the Foreign Service, are all out
there. It's important that we remember
that, and comment on it every time that
we talk to you. The global war on terrorism
goes on and we see daily there are
a lot of challenges ahead, and our people
are in many of these countries as
you know, well and the threats are real.
From our point of view, the United
States is on the right track and we're
trying to support them to the best of
our ability as is our industry. We thank
you for your time and your interest,
and if you have any additional questions,
please forward them to us, we'll
respond as best we can. Thanks, folks.
Operator And that concludes today's teleconference.
Thank you for participating in
today's ManTech International report second
quarter year end financial results
conference call. This call will be
available for replay beginning 7 p.m.
Eastern Time today, through 11:59 p.m.
Eastern Time on Wednesday August 6,
2003. The conference ID number for the
replay is 157-8232. Again conference ID
number for the replay is 157-8232. The
number to dial in for the replay is
1-800-642-1687, or 706-645-9291.
Thank you. You may now disconnect.
[END OF CALL]