Q2 2021 ManTech International Corp Earnings Call
Ladies and gentlemen, good afternoon, and welcome to the Mantech second quarter fiscal year 2021 earnings Conference call.
At this time all participants on the 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 and then zero on you touched on the telephone as a reminder of the conference call is being recorded I would now like to turn the conference over to Gary.
Over to Steven Bad debt, the Vice President of corporate development and Investor Relations.
Welcome everyone. Thanks for participating on the Mantech second quarter call. Joining me today is Kevin Phillips, our chairman CEO and President Judy <unk>, our CFO and Matt Tait, our steel all day.
During the call we will make statements that do not address historical facts can dust of forward looking statements made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
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 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, whereas the substitute for GAAP performance measures you can find the reconciliation of the non-GAAP measures discussed on this call on our second quarter earnings release with that let me hand the call of.
Kevin.
Thanks, Steven and good afternoon, everyone.
I'd like to start the call today by thanking the entire mantech team for their unwavering dedication to our customers and their critical missions.
The steadfast focus enabled another quarter of strong results, including record profitability.
We also saw a 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 be of higher than the 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 and 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 adjudication combined with our ability to continue to take market share.
Will be the key driver for our anticipated bookings and the acceleration of revenue growth in the second half of 'twenty 1.
And into next year.
Overall, we are seeing strong market demand across the majority of our business and.
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 FY 'twenty 2 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 the national priorities and mantech for areas of focus.
This is a reflection of the actions we have taken to continuously position of our business for success.
For example, cyber remains a top priority in the budget calls for over $20 billion of 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.
The 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 modernization of bush across the federal government also aligns with the Mantech 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 of Mantech personnel supporting BRD programs in that country, they have already shifted into other regions.
Mantech has proudly supported the department of defense for multiple decades of the tactical edge.
We look forward to continued support for our customers and their global missions.
And our 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.
Thanks, Kevin we continued our steady execution in the quarter, but the focus on.
Generating sustainable long term value for our shareholders quarterly revenue grew to $649 million up 3% compared to Q2 of 2020.
Direct labor moderated some in the quarter with the return to normalized <unk> usage and the impact of the additional federal holiday for.
For Q2 Prime contracts comprised 93% of revenue and the breakout of contract pricing structure was approximately 69% cost plus 18% fixed price and 13% of time and material.
Q2, EBITDA was $67 million up 19% from Q2 of 2020.
This resulted in an EBITDA margin of 10, 4% up 150 basis points year over year as margins continue to benefit from stronger labor mix and continued lower indirect cost spending.
Net income for the quarter was $37 million and diluted EPS was <unk> 89.
<unk> and 20% from Q2.2020, respectively.
Adjusted net income was $40 million and adjusted diluted EPS was <unk> 99.
Up 19 in the 18% from last year.
Our effective tax rate was 24, 2% in the quarter in line with expectations.
Turning now to the balance sheet on cash flow statement cash flow from operations of $75 million in the quarter represented 2 times net income day sales outstanding were 64 days, an increase of 1 day compared to Q2 of 2020.
At quarter end, the balance sheet at $65 million in cash and $30 million of debt.
Additionally, we distributed $15 million in dividends and key to maintaining steady return of cash to shareholders.
Board has authorized us to continue our current cash dividend of <unk> 38 per share to be paid in September.
We also recently amended and extended our 500 million dollar revolving credit facility and added $600 million in capacity through a delayed draw term loan.
Mantech is taking advantage of favorable debt capital markets and positioning the company with significant flexibility for capital deployment going forward.
As consistently stated our capital deployment remains focused on M&A and we are continuing to actively review opportunities and a very busy market.
We remain focused on transactions that bolster our capabilities expand our customer portfolio and that best position the company to generate long term value.
Moving on to guidance, we are reiterating our previously communicated revenue guidance and increasing our guidance for adjusted net income and adjusted diluted EPS.
We will continue to evaluate our expected go forward results, which we believe are most impacted by several factors. These include the rate at which we are able to successfully win new business and retain recompete as well as the timing of each.
Pace of hiring and ramping new and recent contract awards.
And the level and timing of material procurements as well as the cadence of the normalization of the supply chain.
Our revenue guidance remains $2, 6.5 billion to $2.75 billion, representing 5% to 9% growth year over year.
At the midpoint of guidance a little over 90% of the revenue is expected to come from existing backlog.
We are increasing the outlook for adjusted net income to be in the range of $146.5 million to $151.1 million with adjusted diluted EPS of $3.57.
The $3.68.
We are also increasing our expected EBITDA margin for the year to be 9.3% to 9.4%, which represents a 20% to 30 basis point improvement over 2020.
Year to date margins have been running higher than the full year guide that we anticipate greater volume of lower fee bearing otc's higher and more normalized the indirect spending from the acceleration of expenses related to business development and M&A efforts as well as increased travel and PTO of utilization in the second half of <unk>.
2021.
The adjusted net income and adjusted diluted EPS ranges assume an effective tax rate of approximately 24% and the fully diluted share count of approximately 41 million shares.
Finally cash flow from operations is still expected to be at least $200 million with capital expenditures expected to be around 2.5% of revenue for the year.
Now I'll turn it over to Matt to cover of the business development and operational highlights for the quarter.
Thank you Judy.
We achieved the bookings of $813 million, resulting in a book to bill of approximately 1.3 times in Q2.
Some specific highlights from the quarter include.
Winning a $100 million contract to continue providing the navy with range sustainability services for training and test ranges to meet military readiness and environmental requirements.
We also won an $86 million contract to continue providing cloud engineering Dev ops and enterprise.
For the U S Sis global enterprise.
Finally, we secured a new $85 million contract to provide the state department with enterprise.
Training technology deployment and communications services to support Global Counselor Affairs operations.
These contract awards continue to demonstrate the differentiation and strength of Manitex capabilities in mission and enterprise it.
And systems engineering.
Additionally, 55% of contract awards in the quarter came from classified customers.
As a result of these bookings our total backlog was $10.2 billion at quarter end.
Representing 10% year over year growth.
With funded backlog of 1.4 billion.
We are pleased with the progress we have made during the quarter.
We look forward to continuing to drive strong results in the back half of 2021, as we help our customers leverage best of breed commercial technologies in support of their mission.
Our success and the ability to deliver for customers remains squarely driven by talented employees.
We have increased our commitment to attracting developing and retaining talent and what has become an even more competitive labor market.
We have been hard at work, ensuring we have best in class highly skilled and highly cleared talent in order to deliver our leading solutions.
We remain focused on our objective to be the employer of choice in our industry.
Which is why we are evolving and improving how our team operates advocating for flexibility to maximize employee success satisfaction and productivity and a new normal.
Over the past few years, we have made significant investments bolstering our capabilities and positioning the business and the alignment with national priorities, including cyber enterprise it.
Digital and platform modernization analytics and other key areas all of which as Kevin mentioned are showing steady demand.
Overall, I am confident that Mantech service offerings across its various businesses have positioned us to continue to win.
Our focus on driving continued innovation and differentiation is positioning mantech to maximize pipeline conversion into revenue growth.
We expect the harvest the benefit of those investments in the quarters to come.
With that let me hand, the call back over to Kevin for closing remarks.
Thanks, Matt.
In closing our results this quarter reflect the efforts by our team to drive strong program execution innovation.
And attract and develop best in class talent.
At the same time, we remain focused on leveraging our strong balance sheet to deliver long term shareholder value, while supporting our customers and their critical missions. We are now ready to take your questions.
If you have a question at this time. Please press the Star then 1 key on your Touchtone telephone.
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Our first question is from Matt Akers of Wells Fargo. Please go ahead.
Yeah, Hey, guys. Good afternoon. Thanks for the question.
I wanted to just ask on the margins.
Yes, if there is anything else behind sort of the uptick in margins I know, the OTC or still awesome kind of the normal pace a little bit was that all of the walls or was there anything sort of 1 time that you would point to you on that.
There were no real large 1 time items it continues to be the lower OTC volume and the the reduced indirect span.
Still not caught up back to kind of the pre COVID-19 level.
Got it okay, and I guess thinking about how that will trend can.
The next couple of quarters to the it's fair to assume the Q3 is kind of more back to normal in Q4 is kind of fully back or just kind of like the way to think about the pacing of the rest of the year.
Yeah, Yeah, we're clearly on projecting lower margins in the second half of the year.
Some of that is a return to normal spend and some of it is just because of our high percentage of cost plus we're actually trying to uptake of some of our R&D spending in other investments like that that won't be necessarily recurring in nature, but are within our current indirect freight budgets for the year.
Okay got it. Thanks, that's helpful and if I could do 1 more I guess the.
Can you touch on the kind of the intelligence business in general on I think some of your peers.
Sounds like maybe have seen a little bit of a slowdown there recently that something that you guys are seeing as well.
So I think.
At least for us and maybe some of this question is also I'll say tied to some of the disruptions overall, but I'd say portions of our portfolio overall.
We're seeing a little bit of delays in the Intel side of the business versus say the others in terms of defense and federal civilian just kind of of I'd give you the overarching commentary there.
Got it okay. That's helpful. Thank you.
Thank you. Our next question comes from Matt Sharpe of Morgan Stanley. Please go ahead.
Kevin Judy Mac and afternoon, and thanks for taking my question.
Judy I just wanted to touch on the organic growth rate cadence here for a moment I believe Q1 was about 1% on looks like this quarter more or less was all along those lines and you reiterated the guidance range, which correct me if I'm wrong had 5% embedded.
At the mid point. So looking ahead into Q3 Q4, the inflection in Q3 or is this more Q4 weighted and sort of what's driving the the backend weighting profiles of the.
See surge or what can you tell me about it getting uncomfortable with that inflection in the coming quarters.
Yeah.
The combination of things I would say you know the biggest is related to some of those OTC catch up kind of ramping in Q3, and then even more so in Q4 as well as just the volume of proposals outstanding where we're hopeful that the government will stay on pace and we will see a good Q3 of the.
<unk> that will potentially drive some growth in Q4 going into Q2 or into.
Into 2020, as Kevin let me expand a little bit on that if you look of the $10 billion of proposals outstanding at the end of last year that number was $6 billion for the company and for the first half of this year. There are 2 trends that we've seen 1 is an increasing demand.
As well as resulting submissions of proposals by the customers, meaning that the or asked for us to provide and compete on bids is not going down it's going up at the same time the amount of adjudication in raw dollars over the first 6 months of this year has not state of the levels of bid for the last 2 years. So that's that adjudication.
Part of is reflective of some delays, but we think as from Covid. The choppiness, but you put those 2 together there's just a lot of proposals out there that we think are nearing the end of the adjudication cycle.
We will expect to see outcomes from those.
For mantech of across the industry as a result of the pick up.
Got it that's very helpful. And then just on on the cash balance and M&A.
And it looks like if you if you if you did nothing else other than share is the dividend as well as the the remainder of the revolver outstanding you'd end the year with.
For a loss of 150 male on cash on the Bulks and I think with the the revision to your credit facility of <unk> got another 1 point of water. So in terms of dry powder. So how are you guys thinking about.
M&A flow here in the coming quarters and in particular any commentary around deal size.
Yeah, I'll start and then Judy can add generally we've seen an uptick in assets that are available to the market. This year.
At all sizes.
Just fuels very busy.
In 2021.
And so we are active but also.
The debt availability is there and this of very good time, and very good terms to be able to be in position to have that capacity should we find the right fit and we still stay discipline the.
The multiples for sort of fairly elevated but it's a good time in the market to have that capacity available which is why.
We worked at and Judy to the great job on that.
Yeah the ball.
As Kevin said the NFL.
It was it was time to kind of day of the amend and extend M&A market Crazy lots of things that we just felt like it was.
Good time to have extra capacity should we find the right larger opportunities that makes sense, we will be ready to go.
Got it and then just 1 more if I may Kevin I think you had mentioned that some of your forward deployed staff that were previously in Afghanistan might've been redeployed within the region.
Can you just maybe.
Tell us if youre seeing any opportunities associated with sort of an over the horizon capability or what you've been able to redeploy those.
Those of those bodies too.
So Matt this is Matt.
Feel that maybe initially here.
From a from a Dod perspective.
Our presence.
Within Afghanistan now is complete.
And I can't really give you the specifics about where our folks have been redeployed, but they have been in support of the national security missions that we do support overseas.
And I'll add to that at very high level, we're emission and tactical edge company.
Some of the investments, we're making around R&D and technology related to our ability to support deployed forces.
<unk> systems, and and that's an area that's got a heavy amount of focus within the Dod writ large based on the change I'll call. It a generational change in the strategy.
From priority counterterrorism to priority countering near peer threats and how.
How that plays out in terms of funding and activity.
The play out over time.
But there's a very real and compelling need and we can swim set of the customer. So we'll see how it plays out in terms of all of our support but we've supported these locations for decades, we're proud to do that.
We will continue to do that.
Got it thanks, so much ill get back in the queue.
Yes.
Thank you. Our next question comes from Ghansham corner of Cowen Your line is open.
Yes. Thank you I was wondering.
I know, it's early but would you mind, giving us some color on what you think.
For the medium term or longer term organic growth rate.
May trend to be for Mantech.
Coming off of a big year.
We got the pass through dynamic, but I'm just curious like.
Based on what's in your pipeline, what you see the national security needs.
Of being and.
Putting it altogether of isn't of low to mid single digit organic.
Business medium term or how do you think of model.
Well I think you know in general the pipeline shows that we've got lots of opportunities out there.
That we're pursuing and as you said, it's early to start talking about longer term.
Our goal is always to grow a little bit faster than the budget.
And so we're feeling good about it but it's there.
There's $10 billion proposals out there and it just it's going to depend on how many fall our way.
Judy could you refresh us on sort of the Recompete.
All right net.
Maybe over the next 18 months as we think about the $10 billion.
Yeah, there's not a lot of impact the remaining in 2021from re competes.
Got about 90%.
Plus in the backlog.
With the balance kind of evenly split between the Recompete and new.
The next year I think in general is a reg relative.
The relatively average 20% to 25% recompete, but it's the little more front end loaded in the year than than we've seen in the last few years.
Okay.
Thank you.
Thank you. Our next question is from Robert Spingarn of Credit Suisse. Your line is open.
Hi, Thank you.
Kevin you talked about Mantech Zero Trust capabilities and this is obviously a big focus for this administration.
Can you describe what mantech brings to the table and do you of any partnerships from the leading vendors there may be of crowd strike or of cloud flare I think that both of them of talked about ramping their federal business meaningfully.
Yes.
Great question and thanks, all the talk about both.
We are supporting the federal government and operating and of contested cyber environment right. That's got the full breadth of cyber operations to cyber defense, we've done that for a long time.
In terms of both sides of that and policies have and will continue to change and focus on that the cyber defense piece is moving towards <unk>.
Zero Trust architectures moving to the cloud, there's a lot behind that through the executive order that came out.
We have within the cyber R&D and the investments that we've made focused on zero trust as a core component and within the business as a business. We've also we're also I'd say almost complete with the implementation of the zero Trust architecture within our own.
Environment, not planning execution, and we're almost done with debt.
So you put those 2 together we think the.
The combined offer at least the <unk>.
For customers to know it can be done on how it can be done.
And also of we have strong capabilities that Matt can expand upon around how we would do that and with the clients with customers as well as partners that we have.
Yes, I would say just to add onto kevins commentary that.
We actually have the we don't typically talk about the specifics of the partnerships that we have but we have a wide breadth of partnerships across the zero Trust line.
Asking and we're involved in I will just say no.
Multiple areas of discussions with customers.
Zero Trust and this aligns it's of Great question, because it really aligns great with our the technical focus areas, we have within our 2023 strategy and where we're investing.
Because to Kevin's point of it aligns with the I'll say the innovations that people are looking for but also.
I'll say reasonable innovation, where.
Everyone gets sold the next best thing on Zero Trust, So it's on us helping them as the independent.
The independent technology agnostic partner to help sort that out to get the real solutions.
Do you see of particular timeframe when this really ramps.
Oh gosh I've never been good at for.
Prognosticating the pace of the federal government.
But the 1 thing Robert but I would say is that.
The government is in earnest in these conversations where in the past.
It was more of it was I would say not as urgent of dialogue. So I think that there is of pace to which they want to act upon.
And so I think the urgency there and then.
See in terms of it but in terms of this isn't the case of whether they want to do it or not it's just the case of them getting through their own acquisition processes to make it happen and as Kevin I think if you read the executive order of the government has been very clear on what they suggest agencies prioritize.
And that guidance as it relates to.
The response to the executive order, how it kind of flow is very important but it will also guide. These these different agencies as to how theyre going to do it once funding is afforded in the available and you can see it.
The attempt to the SAB.
Establish more funding to make that available and make the changes necessary.
Okay, well. Thank you for that just a quick 1 for Judy.
It really on the EBITDA margin I wanted to just look out a little bit to the right and see if you think the expansion can continue next year or does it.
Does the renormalization of some of the costs like PTO and travel.
Kind of limit that opportunity.
Relative to this year.
Yeah, I think we outperformed last year, we're on track to outperform this year clearly, it's something that we're focused on.
Trying to continue to do you know we've said in the past 10 to 15 basis points of year hard to say today.
Given the 2021 outperform that we'll be able to do that in 'twenty, 2 but it's clearly up okay.
Okay, well, thank you for that.
The color.
Thank you. Our next question comes from Brian Chin Selinger of Alliance Global Partners. Please go ahead.
Great. Thanks for taking my question.
Mentioned, you got 90% of the midpoint of revenue guidance coming from backlog for the remainder of the year I think.
Does that compare to the past at this point in the year on highways potential hiring difficulties ramp delays and I guess the award delays factored into that.
Yeah, Hi, Brian.
<unk>.
I think the.
Okay.
Oh, yes.
On.
The just to clarify the 90% is for the full year not the second half of the year. So obviously the the first half of the year now with all of the backlog. So if youre looking at just the second half of the year, it's a little bit higher.
On a percentage coming from new and Recompete and as far as.
How it compares to prior years, it might be a little bit better off but.
Usually by this point in time.
You kind of have 1 on what youre going to win that's going to have any kind of major impact on the revenue in the year.
That was why I asked then the only other follow up of small numbers questions I missed if you said what.
New business was of that 800 and change of the awards.
So this is Matt the.
The recompete.
Add ons and the contract extensions, where the majority of the bookings for the quarter.
Got it okay. Thank you.
Okay.
Thank you. Our next question comes from Tobey Sommer of true of Securities. Your line is open.
Hey, good evening, everyone. This is Jasper bibb on for Tobey 1 of your competitors said last week based on the majority of the.
Our employees was adopt some form of hybrid work over time.
Curious what you think the service delivery can look like long term and what that would mean for your improving margins et cetera.
Sure. So this is Matt I'll just start off.
So we've been doing obviously.
On the war on talent has not ended.
So we're very sensitive to that.
Our mobility program, which has hit record numbers. This year in terms of where enablement of our folks and I could spend 20 minutes talking to you about all of the career enablement things, we're doing but the key for US is that when I mentioned in my comments just around flexibility.
We have a wide variety of customers that some what I'll say, 100% remote and others that 1 on 100% on site and so we're working through that as well as for our each of our employees in terms of what experience and career enablement. They want to have and I think the phrase that we really used to some of that up.
We really want our folks to be the best version of themselves and so we're going to be working with them to make sure that they can do that within the context of of the.
The pandemic and the and the.
Things as our customers are I'll say changing their requirements are updating their requirements for remote work.
Thanks, and then I just wanted to get your thoughts on what wage inflation might mean for the business based on your contract mix.
Mike that impact margins and is that potentially a tailwind for the cost plus portfolio of for your customers are willing to pay up for the best IP of cyber talent.
Yeah, I mean, that's definitely an area, where having the high percentage of cost plus work is to our benefit.
So they are willing to pay those higher costs at that side, you know, it's still very competitive market both on the bidding standpoint, as well as the hiring standpoint.
Okay last question for me just 1 of them.
Seems to be of pretty dynamic environment of responding to the Delta have you seen on the customers putting capacity limits back in place of skip work or is there kind of any expectation that that might happen in the coming months.
Yes, we are not seeing that I think the general guidance is.
We want you to show up at work.
Want to make sure Youre vaccinated, we want a strongly encourage especially cannula vaccinated and if youre not we're asking that you take a lot of precautions and we're going to help you take those precautions.
In terms of not only doing masks for the testing. So we will see how it all plays out for the guidance generally is.
A fair amount of the citizens.
1 shot.
But we still have both the surge going on in.
Let's work through this and try not to.
The shutdown things if we can all of it.
Got it thanks for taking the questions.
Thank you. Our next question comes from Mariana Perez Mora of Bank of America. Your line is open.
Good afternoon, everyone.
So my question on this on cyber security, we see a lot of commentary about household balance acuity importance of international security, we have seen cyber security on the nuclear at most of the deals that we have seen recently.
And how should they think about the timing from build on.
<unk> ideas for funding to the Cam like debt to become contract on talked on the become something that is reflected on your.
Of course.
Yes, it's a great question and thanks look theres a lot of.
Like any major change it starts with the policy level changes as well as incremental funding and re prioritization of funding and basically in that order and you can tell it theres a lot of policy level discussion with the new national Cyber director and all the activities going on that will inform.
Where the funding goes that said there is already an increasing on classified budget for cyber. So you can see the beginning for prioritization the same thing for it infrastructure renewal.
And we think that debt will be consistent but it's it's hard to say where line up against other priorities, but directionally I think the.
For the ship is moving in 1 direction, it's a matter of when and how.
Of those priorities laid out overtime.
But when you do your Internet on planning, we said this on the short term.
Moving on more of like it could be years for based on Pony become top line comp.
I think certain program is going to be of short term boost but the bulk of it is going to be longer term mission requirements and changes that have to be funded and procured so it's a mixture.
Of both but but more more and more of this will be more persistent in terms of the obligation of the allocations towards it.
And just on.
And then have you seen given these trends like new entrants into the reason of how heartbeat.
To get like.
On pad.
We don't see a lot of new entrants and this is the areas that were that you were talking about.
Or I mean.
The high bar entry.
To be able to do this the type of work that we that we do.
Okay and last 1 of the related to Beth.
The more like.
Next opportunity would you mind given us on.
What is the new new work that you mentioned in the quantified 5 line of Opex opportunities.
The related why does it come from or timing.
Timing that we should look at.
Yes, I appreciate the questions. So we have been positioning as we mentioned with our investments to be able to kind of predict where the market is and go after some of these procurements of all sizes, but more of larger procurements as well.
As prime contractor and we have been able to.
Put together teams and compete for putting strong bids I think the.
We're on the playing field competing for some of these larger deals.
Across our different components for the business until defense and federal civilian.
And.
So I can't point to any 1 specific area.
The thing about Ciber to think about enterprise.
Analytics and automation of as well as.
Remote compute and data at the edge support and systems engineering all of those are the areas that we are.
Handing into.
The competing more routinely.
Alright, Thank you very much.
Thanks.
Thank you again to ask a question. Please press star 1 on your Touchtone telephone. Our next question comes from Louie Dipalma of William Blair. Please go ahead.
Kevin and Judy and Steven Good afternoon.
How're you doing.
Great.
Mappings.
And Matt.
My feelings on it at all because you've got at the Merit.
[laughter].
Okay for for you Matt.
Sure.
Particularly your bookings were particularly strong from classified customers I believe.
U N.
Kevin May have said that 55% of bookings came from classified would you.
You say that.
The.
Intelligence community community demand for your services and General Award activity is is back to the 2019 levels or are almost back to 2019 levels. After all of the disruption associated with the pandemic.
And the.
Administration transition.
So I would say that there is still.
Some delays in the Intel sector.
And not necessarily from the administration changes the more from the pandemic.
But.
There is funding there, but it's just a matter of like Kevin talked about earlier.
Of the pace of what you have coming back.
Mass and getting getting things through.
It's a bit of a throughput issue that they're working through.
Sounds good.
And also related to the classified I'm spending the.
Intelligence community seems to be accelerating investments and its cloud computing architecture with.
On the Amazon <unk> the successor CEO.
<unk> that was awarded last year, and the recently awarded Wild and stormy.
From a high level perspective, our migrations to the cloud a significant growth area for Mantech in terms of classified and non classified customers and if Amazon, Microsoft or others win.
A large federal contractors of Prime are you often involved as a subcontractor for like these large <unk>.
Cloud implementations.
Yes, so so writ large while we didn't mention cloud specifically within the 5 technical focus areas.
It's like electricity for us, which is a part of all of the things that you do it's kind of hard not to do the types of work and the innovations that we want without being cloud enabled and so we do work with.
All of the.
All of the CSP.
And do support a lot of the activities. There I know we've had recent press releases on certain relationships.
So I think just on class a and class.
That part of our go to market is not going to be true is not changing in a good way, meaning that we are investing in that we do see opportunities across the patch, but we don't want to lead with cloud we want to lead with solutions for our customers really want us to solve their problems and so this is these are enabling technologies that we are investing in to make sure.
That we can be technology agnostic given the right answer.
This is Kevin I'll just follow on debt briefly there's tactical cloud support Theres mission and on say service range of C level of cloud and Theres enterprise level and all of those are focus areas for.
For our customers and we're going to be areas that we will see concentrated.
Movement over time.
In terms of just creating that foundational element of.
Up and down the overall decision, making stack if you want to call on.
Thanks, Kevin.
Thank you at this time I'd like to turn the call back over to Stephen <unk> for closing remarks, Sir.
Thank you all for your participation on today's call and for your interest in Mantech as usual members of our senior team will be available for any follow up questions have a good evening and please state your day.
Ladies and gentlemen, this does conclude today's conference. Thank you for your participation and have a wonderful evening you may now all disconnect.
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