Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - MANTECH INTERNATIONAL CORP | d8ka.htm |
| EX-99.2 - EXHIBIT 99.2 - MANTECH INTERNATIONAL CORP | dex992.htm |
| EX-99.3 - EXHIBIT 99.3 - MANTECH INTERNATIONAL CORP | dex993.htm |
| EX-23.1 - EXHIBIT 23.1 - MANTECH INTERNATIONAL CORP | dex231.htm |
EXHIBIT 99.4
MANTECH INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On January 15, 2010, ManTech International Corporation (ManTech) completed the acquisition of all outstanding equity securities of Sensor Technologies Inc. (STI) for approximately $242.0 million in cash. The STI acquisition has been accounted for as a business combination using the acquisition method of accounting. Under the acquisition method of accounting, the initial purchase price was allocated to STI underlying assets and liabilities based on their fair values at the date of the acquisition. The excess of the purchase price over the underlying assets and liabilities was recorded as goodwill.
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2009 has been prepared by management as if the STI acquisition had occurred on such date, given the same transaction parameters and credit facility level of $200.0 million. Accordingly, ManTech has recorded the estimated fair value of the assets acquired and liabilities assumed.
The unaudited pro forma condensed consolidated statements of income included in this report for the nine months ended September 30, 2009 and the twelve months ended December 31, 2008 have been prepared by management as if the STI acquisition had occurred on January 1, 2008.
The unaudited pro forma adjustments are based on management’s preliminary estimates of the value of the tangible and intangible assets and liabilities acquired. As a result, the actual adjustments may differ materially from those presented in these unaudited pro forma condensed consolidated financial statements. A change in the unaudited pro forma adjustments of the purchase price for the acquisition would primarily result in a reallocation affecting the value assigned to intangible assets. The income statement effect of these changes would depend on the nature and amount of the assets or liabilities adjusted.
The accompanying unaudited pro forma condensed consolidated statements of income and balance sheet have been prepared by management in accordance with rules prescribed by Article 11 of Regulation S-X. These pro forma condensed consolidated financial statements are provided for illustrative purposes only and are not intended to represent what the actual consolidated results of operations or the consolidated financial position of ManTech would have been had the acquisition occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position. No effect has been given for operational efficiencies that may have been achieved if the acquisition had occurred on January 1, 2008 or September 30, 2009.
This information should be read in conjunction with our Current Report on Form 8-K, filed with the SEC on January 19, 2010, ManTech’s historical financial statements and the accompanying notes in both our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and our Quarterly Report on Form 10-Q for the nine months ended September 30, 2009, STI historical financial statements, and the accompanying notes that are included in this Current Report on Form 8-K/A.
MANTECH INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
| As of September 30, 2009 | |||||||||||||||
| (In Thousands) |
ManTech International Corporation |
Sensor Technologies Inc. |
Pro Forma Adjustments |
Pro forma Combined |
|||||||||||
| ASSETS |
|||||||||||||||
| CURRENT ASSETS: |
|||||||||||||||
| Cash and cash equivalents |
$ | 51,830 | $ | 18,497 | $ | (42,665 | ) (a),(c) | $ | 27,662 | ||||||
| Receivables—net |
363,972 | 51,591 | — | 415,563 | |||||||||||
| Prepaid expenses and other |
10,613 | 51 | — | 10,664 | |||||||||||
| Total Current Assets |
426,415 | 70,139 | (42,665 | ) | 453,889 | ||||||||||
| Property, plant and equipment—net |
14,857 | 391 | 15,248 | ||||||||||||
| Goodwill |
488,217 | — | 127,330 | (a) | 615,547 | ||||||||||
| Other intangible assets—net |
76,372 | — | 93,200 | (b) | 169,572 | ||||||||||
| Other assets |
25,262 | 46 | 665 | (c) | 25,973 | ||||||||||
| TOTAL ASSETS |
$ | 1,031,123 | $ | 70,576 | $ | 178,530 | $ | 1,280,229 | |||||||
| LIABILITIES AND STOCKHOLDER’S EQUITY |
|||||||||||||||
| CURRENT LIABILITIES: |
|||||||||||||||
| Current portion of debt |
$ | — | $ | — | $ | 200,000 | (c) | $ | 200,000 | ||||||
| Accounts payable and accrued expenses |
120,688 | 48,655 | — | 169,343 | |||||||||||
| Accrued salaries and related expenses |
60,148 | 451 | — | 60,599 | |||||||||||
| Billings in excess of revenue earned |
8,476 | — | — | 8,476 | |||||||||||
| Total Current Liabilities |
189,312 | 49,106 | 200,000 | 438,418 | |||||||||||
| Accrued retirement |
20,517 | — | — | 20,517 | |||||||||||
| Other long-term liabilities |
7,463 | — | — | 7,463 | |||||||||||
| Deferred income taxes non-current |
33,590 | — | — | 33,590 | |||||||||||
| TOTAL LIABILITIES |
250,882 | 49,106 | 200,000 | 499,988 | |||||||||||
| STOCKHOLDER’S EQUITY |
|||||||||||||||
| Common stock ManTech International Corporation, Class A |
225 | — | — | 225 | |||||||||||
| Common stock ManTech International Corporation, Class B |
136 | — | — | 136 | |||||||||||
| Common stock Sensor Technologies Inc. |
— | 145 | (145 | ) (a) | — | ||||||||||
| Additional paid-in capital |
356,545 | — | — | 356,545 | |||||||||||
| Treasury stock |
(9,114 | ) | — | — | (9,114 | ) | |||||||||
| Retained earnings |
435,226 | 21,325 | (21,325 | ) (a) | 435,226 | ||||||||||
| Accumulated other comprehensive loss |
(149 | ) | — | — | (149 | ) | |||||||||
| Unearned employee stock ownership plan shares |
(2,628 | ) | — | — | (2,628 | ) | |||||||||
| TOTAL STOCKHOLDER’S EQUITY |
780,241 | 21,470 | (21,470 | ) | 780,241 | ||||||||||
| TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY |
$ | 1,031,123 | $ | 70,576 | $ | 178,530 | $ | 1,280,229 | |||||||
See notes to pro forma condensed consolidated financial statements
MANTECH INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
| Nine months ended September 30, 2009 | ||||||||||||||||
| (In Thousands Except Per Share Amounts) |
ManTech International Corporation |
Sensor Technologies Inc. |
Pro Forma Adjustments |
Pro forma Combined |
||||||||||||
| REVENUES |
$ | 1,478,268 | $ | 220,185 | $ | (75 | ) (d) | $ | 1,698,378 | |||||||
| Cost of Services |
1,218,112 | 198,566 | (75 | ) (d) | 1,416,603 | |||||||||||
| General and administrative expenses |
128,488 | 1,633 | 6,578 | (b) | 136,699 | |||||||||||
| OPERATING INCOME |
131,668 | 19,986 | (6,578 | ) | 145,076 | |||||||||||
| Interest expense |
(921 | ) | (2 | ) | (3,123 | ) (c) | (4,046 | ) | ||||||||
| Interest income |
161 | 60 | — | 221 | ||||||||||||
| Other income (expense), net |
259 | (3 | ) | — | 256 | |||||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
131,167 | 20,041 | (9,701 | ) | 141,507 | |||||||||||
| Provision for income tax |
(48,919 | ) | 3,783 | (b),(c) | (45,136 | ) | ||||||||||
| INCOME FROM CONTINUING OPERATIONS |
$ | 82,248 | $ | 20,041 | $ | (5,918 | ) | $ | 96,371 | |||||||
| BASIC EARNINGS PER SHARE: |
||||||||||||||||
| Basic earnings per share |
$ | 2.31 | $ | 2.71 | ||||||||||||
| Weighted average common shares outstanding |
35,608 | 35,608 | ||||||||||||||
| DILLUTED EARNINGS PER SHARE: |
||||||||||||||||
| Dilluted earnings per share |
$ | 2.29 | $ | 2.68 | ||||||||||||
| Weighted average common shares outstanding |
35,917 | 35,917 | ||||||||||||||
See notes to pro forma condensed consolidated financial statements
MANTECH INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
| Twelve months ended December 31, 2008 | ||||||||||||||||
| (In Thousands Except Per Share Amounts) |
ManTech International Corporation |
Sensor Technologies Inc. |
Pro Forma Adjustments |
Pro forma Combined |
||||||||||||
| REVENUES |
$ | 1,870,879 | $ | 181,033 | $ | (495 | ) (d) | $ | 2,051,417 | |||||||
| Cost of Services |
1,565,198 | 168,629 | (495 | ) (d) | 1,733,332 | |||||||||||
| General and administrative expenses |
152,323 | 2,020 | 12,402 | (b) | 166,745 | |||||||||||
| OPERATING INCOME |
153,358 | 10,384 | (12,402 | ) | 151,340 | |||||||||||
| Interest expense |
(3,978 | ) | (1 | ) | (9,183 | ) (c) | (13,162 | ) | ||||||||
| Interest income |
812 | 171 | — | 983 | ||||||||||||
| Other income (expense), net |
(233 | ) | (2 | ) | — | (235 | ) | |||||||||
| INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
149,959 | 10,552 | (21,585 | ) | 138,926 | |||||||||||
| Provision for income tax |
(59,667 | ) | 8,418 | (b),(c) | (51,249 | ) | ||||||||||
| INCOME FROM CONTINUING OPERATIONS |
$ | 90,292 | $ | 10,552 | $ | (13,167 | ) | $ | 87,677 | |||||||
| BASIC EARNINGS PER SHARE: |
||||||||||||||||
| Basic earnings per share |
$ | 2.58 | $ | 2.50 | ||||||||||||
| Weighted average common shares outstanding |
35,028 | 35,028 | ||||||||||||||
| DILLUTED EARNINGS PER SHARE: |
||||||||||||||||
| Dilluted earnings per share |
$ | 2.55 | $ | 2.47 | ||||||||||||
| Weighted average common shares outstanding |
35,459 | 35,459 | ||||||||||||||
See notes to pro forma condensed consolidated financial statements
MANTECH INTERNATIONAL CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Basis of Pro Forma Presentation |
The accompanying unaudited pro forma condensed consolidated financial statements have been prepared to give effect to the completed acquisition. The unaudited pro forma condensed consolidated balance sheet is based on the individual balance sheets of ManTech and STI and has been prepared to reflect the acquisition by ManTech of STI as if the acquisition had occurred on September 30, 2009. The unaudited pro forma condensed consolidated statements of income are based on the individual statements of income of ManTech and STI and combine the results of operations of ManTech and of STI for the nine months period ended September 30, 2009 and the year ended December 31, 2008 as if the acquisition had occurred on January 1, 2008 for both pro forma statements of income.
The STI acquisition has been accounted for as a business combination using the acquisition method of accounting under the Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) 805, Business Combinations. Under the acquisition method of accounting, the initial purchase price was allocated to STI underlying assets and liabilities based on their fair values at the date of the acquisition. The excess of the purchase price over the underlying assets and liabilities was recorded as goodwill. Detailed information regarding the purchase price allocation will be included in the footnotes to our financial statements in our annual report on form 10-K for the year ended December 31, 2009.
| 2. | Pro Forma Adjustments |
Pro forma adjustments are necessary to reflect the allocation of the purchase price, including adjusting assets and liabilities to fair value and recognizing intangibles, with related changes in depreciation and amortization expense, and to reflect the effects of the financing necessary to complete the acquisition.
The pro forma adjustments included in the unaudited pro forma condensed consolidated financial statements are as follows:
a) To reflect the purchase of STI as of September 30, 2009. We have assumed the same parameters of the transaction, including the $242.0 million purchase price and the elimination of the shareholders’ equity accounts of STI. The excess of the purchase price plus any working capital adjustments over the fair value of the net assets and liabilities acquired and other transaction costs has been classified as goodwill. Although we have performed this calculation at a date differing from the actual purchase date, goodwill and other amounts are expected to approximate actual results.
b) To reflect the fair value of the identifiable intangible assets. The following table sets forth the components of intangible assets associated with the acquisition of STI on January 15, 2010 (Amounts in Thousands):
| Preliminary Fair Value |
Estimated Useful Life | ||||
| Backlog |
$ | 7,750 | 1 year | ||
| Customer Relationships |
85,200 | 20 years | |||
| Non-Compete Agreements |
250 | 4 years | |||
| Total Intangible Assets |
$ | 93,200 | |||
Backlog and customer relationships represent the underlying relationships and agreements with STI’s existing customers. Non-compete agreements represent the amount of lost business that could occur if the sellers, in the absence on non-compete agreements, were to compete with the Company.
Also, pro forma adjustments have been made to reflect amortization of these identifiable intangible assets for the related periods. Intangible assets are being amortized using the pattern of benefits method.
c) To record the acquisition related borrowings under our credit facility of $200.0 million. Deferred financing fees of approximately $0.7 million were capitalized in conjunction with amending our revolving credit agreement.
Also, pro forma adjustments have been made to reflect additional interest expense had increased borrowings under our credit facility for the acquisition of STI been in place at the beginning of each period presented. This adjustment is not meant to be representative of the debt level that might have been required had the acquisition taken place at the beginning of the periods and is not indicative of past or future performance. The adjustments have been calculated by applying the average LIBOR rate for the nine months ended September 30, 2009 and the twelve months ended December 31, 2008, plus the applicable market-rate spread determined based on the Company’s leverage ratio calculation, with an assumed debt level of $200.0 million during each respective period.
All capitalized loan costs have been amortized over the expected life of the loan. Additional loan costs related to the amendment of our revolving credit agreement in connection with the STI acquisition have been amortized over the remaining expected life of the loan.
d) To offset the impact of work that STI subcontracted to ManTech during the periods presented in the pro forma statements of income.
| 3. | Pro Forma Earnings Per Share |
The pro forma basic and diluted earnings per share are based on the weighted average number of shares of ManTech common stock outstanding during the periods. The diluted weighted average number of shares does not include outstanding stock options if their inclusion would be anti-dilutive.