ManTech International Corporation
Q1 2017 Earnings Call Transcript

Published: 4 May 2017

[Operator:]

Good day, ladies and gentlemen, and welcome to the ManTech's First Quarter Fiscal Year 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I'd now like to turn the conference over to your host, Stephen Vather, Executive Director, Corporate Development. Please go ahead.

[Stephen Vather:]

Thank you, Vince, and welcome, everyone. On today's call, we have George Pedersen, Chairman and CEO; Kevin Phillips, President and COO; Judy Bjornaas, Executive Vice President and CFO; and Dan Keefe and Bill Varner, our two Group Presidents. During this call, we will make statements that do not address historical facts and thus are forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to factors that could cause actual results to differ materially from the anticipated results. For a full discussion of these factors and other risks and uncertainties, please refer to the section entitled Risk Factors in our latest Form 10-K and our other SEC filings. We undertake no obligation to update any of the forward-looking statements made on this call. Now, I'd like to turn things over to George.

[George J. Pedersen:]

Good afternoon and thank you for participating in today's call. I am pleased with the strong performance of our company in the first quarter. Furthermore, I'm proud of our team delivering solid revenue growth, large new contract awards and improvements across all profit measures. The overall threat level to our nation and its allies remain elevated. Consistent and sufficient funding are crucial for our customers who effectively maintain the security of our nation. I am pleased to see that Congress works towards an agreement on the $1.1 trillion spending bill earlier this week. The budget adds $15 billion towards defense, $1.5 billion for border security. As a result, ManTech's customers and programs continue to be a priority. With the strong performance in the first quarter, I believe we're well positioned for continued growth. Exiting the quarter, we have approximately $92 million in cash and are in a strong position to make more acquisitions to grow our company. We remain focused on investing in growth both organically and through acquisitions. At this time, we're actively reviewing several promising acquisition candidates. Now, Kevin will provide you with a review of our operations. Kevin?

[Kevin M. Phillips:]

In the first quarter, we delivered strong revenue growth, exceptional new business wins, as well as improvement in operating income, net income and earnings per share. Revenues were up 7% and operating income and earnings per share were both up 11% from the first quarter of 2016. Across a variety of measures, we are seeing a return to levels not experienced since 2014. We received $711 million in contract awards this quarter, which represents a 1.7 times book-to-bill. It was a strong Q1 book-to-bill and the best we have had since 2008. This quarter also marks the eighth consecutive quarter of bookings at or above 1 times. Total backlog increased 4% and stood at $5.1 billion and funded backlog increased to $1.2 billion or 26% from our backlog at the end of last year. This quarter, approximately 60% of the bookings were for new business. The increased award activity was predominantly within federal civilian customers, which is a result of ManTech's superb technical staff, innovative tools and frameworks, as well as proven past performance. Later, Dan and Bill will go into greater detail on our recent contract awards with the Customs and Border Patrol and the Federal Bureau of Investigation. Let me offer a few thoughts on the broader operating environment. We believe there is continued gradual improvement in the market environment. Our contract awards are increasing in duration and we're experiencing increased demand for select areas of mission and talent on our current contracts. Additionally, customers are consolidating contracts in order to streamline the acquisition process. In my view, the combination of these trends reflects a level of certainty and longer-term funding priorities within the government. The budget control like levels are now a floor to the future growing budgets and the trends are favorable. We are seeing an increasing movement towards best value procurement, which over the longer-term should provide room for some margin improvement. Awards are happening regularly, but the protest environment remains elevated. We're continually working to bring comprehensive and innovative solutions to our customers' most challenging problems and hold technical exchanges that help find best in class partners as part of those deliveries. Proposal activity remains high. We're still on track to submit over $7 billion in bids in 2017. Our total qualified pipeline is $18 billion and we have about $4 billion awaiting adjudication. Overall, our sustained contract award level and resulting growth are a great recognition of the efforts made by our leadership team and our employees towards helping make our customers successful. Our recent awards provide a clear path to organic growth. To meet the increasing demand for our services and solutions, we're heavily focused on the clearance processing and attracting talent in a highly competitive labor market. We're continuing to prioritize acquisitions for capital deployment and are actively identifying companies whose customer and capability sets fit our criteria. Additionally, we continue to make internal investments that have and will continue to help shape and increase our position in the full-spectrum cyber solutions, systems and software engineering, secured enterprise IT solutions, and data and analytics support. We are carrying forward a proud history of supporting missions critical to national security and offering advanced technologies and solutions responsive to other national priorities. Now Judy will provide you with additional detail and specifics of financial performance and outlook. Judy?

[Judith L. Bjornaas:]

Thanks, Kevin. Revenues for the first quarter were $418 million, up $28 million or 7.1% compared to the first quarter of 2016 and up $24 million or 6.1% compared to the prior quarter. Revenue growth in this quarter was driven by contributions from recent acquisitions, higher ODCs as well as strong services ramp ups on recent awards, with direct labor up sequentially and year-over-year. We are working to grow our direct labor base and, as Kevin mentioned, expect increasing demand for the capabilities we offer our customers. For the quarter, prime contracts represented 88% of our revenues. Contract mix was essentially unchanged with 68% of revenues on cost-plus contracts, 14% on time and material contracts, and 18% on fixed price contracts. Operating income for the quarter of $24.4 million was up 11% from the first quarter of 2016 and 14% from last quarter. Operating margin of 5.8% increased approximately 20 basis points year-over-year and 40 basis points sequentially. The improvement was driven by better cost management and higher award fees as well as some contract-related one-time items, including fixed price completion. Net income was $15 million and diluted earnings per share were $0.39 for the quarter, which were up 14% and 11%, respectively, compared to the first quarter of 2016. Net income and diluted earnings per share were also up 9% and 11% compared to the fourth quarter of 2016. The effective tax rate was 37.7% in Q1, which was lower than expected due to some one-time tax adjustments. The lower tax rate added $0.01 of EPS in the quarter. Now on to the balance sheet and cash flow statement. Our balance sheet at quarter end shows $92 million in cash with no debt. During the quarter, we collected $37 million in cash flow from operations or 2.4 times net income. DSOs were 68 days for the quarter, an improvement of 4 days compared to the first quarter of 2016 and an improvement of 5 days sequentially. The board has authorized us to maintain our current dividend level of $0.21 per share to be paid on June 23, 2017. Now to the forward outlook. As compared to our previously communicated 2017 guidance, we are raising the lower end on revenue as well as raising the top end of our net income and EPS guidance. Before any future acquisitions, we're calling for revenues of $1.65 billion to $1.7 billion, net income of $56.5 million to $59.4 million, and diluted earnings per share of $1.44 to $1.52. The implied operating margin guidance for the year remains at 5.6% to 5.7%. At the midpoint of guidance net income is expected to be up almost 3% from last year, benefiting from revenue growth and margin expansion, offset by a higher expected tax rate. Cash flow from operations should still be between 1.6 times and 2 times net income. Built into our guidance are an effective tax rate of 38.3% and a fully diluted share count of 39.1 million shares. Now Dan will speak to our defense and federal civilian business.

[Daniel J. Keefe:]

Good afternoon. ManTech Mission Solutions and Services had an excellent Q1, which puts us on a good path for the year. As mentioned earlier, we were awarded a $229 million five-year contract with the Department of Homeland Security Customs and Border Patrol. This work, combined with our presence on the Continuous Diagnostic and Mitigation program, as well as the Information and Enforcement Technology Training Services program solidifies ManTech's major role within the Department of Homeland Security across multiple operational components. This most recent award illustrates ManTech's strong market position and alignment to key administration and national security priorities. The heart of the work is focused on providing big data analytic solutions to deal with efficient real-time monitoring of the massive volume and velocity of data associated with people, cargo and conveyances. Our employees will be providing this comprehensive solution coupled with intelligence analysis, predictive modeling, threat research and visualization. On the health IT front, I'm pleased to report that we've completed the integration of Edaptive Systems. And we recently won our first contract supporting the Center for Medicare and Medicaid Services with the combined capability of ManTech and Edaptive Systems. I'll now turn it over to Bill.

[L. William Varner:]

Thanks, Dan. I'm pleased to report that MCIS had another great quarter. We continued to see results related to our investments in cyber and our strategic focus to expand our presence in the intelligence community. We had an outstanding first quarter with numerous wins consisting of both new work and re-competitions with new and existing customers. We continued to experience a substantial and growing demand for full-spectrum cyber support. This past quarter, we expanded our support in cyber tool development and training work with multiple wins for classified customers as well as significant organic growth resulting from increased scope on existing contracts. From a defensive cyber perspective, we continued to build our strong performance supporting security engineering and cyber systems monitoring and management by providing services and solutions in intrusion detection and prevention, security information and event management, malicious code management, endpoint security and incident response. I also want to highlight our insider threat capabilities, which are becoming a topic of much discussion in the market. We hold the leadership position in this space based upon work we have done across the federal market, and we continue to expand this capability into other federal customers looking for solutions to this critical issue. Also in the quarter, we were successful in a significant re-compete and consolidation win supporting the FBI's Criminal Justice Information Systems (sic) [Criminal Justice Information Services] (12

[Operator:]

Thank you. Our first question is from Joseph Vafi of Loop Capital. Your line is open.

[Joseph A. Vafi:]

Hey, everyone. Good afternoon, and congratulations on the good bookings quarter.

[George J. Pedersen:]

Thank you.

[Judith L. Bjornaas:]

Thank you.

[Joseph A. Vafi:]

Maybe we just focus on the bookings a little bit. I was wondering where you saw the strength, was it better adjudication of contracts that had already been submitted for review or was it better win rates, or a combination of the two?

[Kevin M. Phillips:]

This is Kevin. I'll frame it a little bit and then, since we had some fairly strong wins over the last five months, I would add Bill and Dan to add flavor. But (15

[Daniel J. Keefe:]

Yeah, this is Dan. I'd just add, I mean, as I just explained on the large contract which was all new work for us with the Department of Homeland Security, when you're talking about a contract in which you're doing big data analytics, predictive modeling, threat research and visualization, that's the kind of base that we started, as Kevin mentioned, we've been building for a couple of years. So I think you're starting to see those kind of solutions come forward that probably three years ago we didn't have the capability to do.

[L. William Varner:]

This is Bill. I think Kevin really said it properly. We're doing a better job with proposals; we're doing a better job with all phases of business development; and we're doing a much better job of offering solutions to our customers. So I think we're seeing the results of things that we've been doing for the past several years now.

[Joseph A. Vafi:]

Okay. That's helpful. And maybe I haven't jumped into the details of the math looking at this quarter versus last. But in your release, you indicated that backlog was up 4% sequentially here, but you did a 1.7 book-to-bill. And so I'm just wondering if – it seems like the backlog maybe – should've been up a little bit more if you had a 1.7 book-to-bill, or maybe it's just a really big backlog.

[Judith L. Bjornaas:]

We did have a little bit of backlog expire off from some of the contracts that were ending that had some unexpended backlog.

[Joseph A. Vafi:]

Okay. Got it. And then I think I missed what you said in terms of the 1.7 in the quarter. Was that – what percent was new? I think, Kevin, did you say it was 50% new?

[Kevin M. Phillips:]

60%.

[Joseph A. Vafi:]

60% new?

[Kevin M. Phillips:]

Yeah.

[Joseph A. Vafi:]

And then just finally, just some commentary, it looks like the funded backlog increased nicely in the quarter. And I'm wondering what you're seeing in that kind of funded backlog to revenue conversion recently. Is it accelerating at all? Is that business converting to revenue any faster than it did? And what that may mean for sequential revenue performance next quarter if the funded backlog was up so strongly this quarter? Thanks.

[Judith L. Bjornaas:]

I think it's more a function of the new contract awards coming in funded and more budget certainty. I would not view that as being funded backlog burning faster than historically.

[Joseph A. Vafi:]

Okay. Thanks so much.

[Kevin M. Phillips:]

But it does speak to the priority of the contracts, and we're fairly excited about the fact that they are placing more longer-term funds on the contracts for us to perform.

[Joseph A. Vafi:]

That's great. That's good to hear. Thanks so much, guys.

[Operator:]

Thank you. Our next question is from Tobey Sommer of SunTrust. Your line is open.

[Kwan Hong Kim:]

Hi. This is Kwan Kim on for Tobey. Thank you for taking my questions. First off, could you talk about your small business challenges today and how they compare to prior quarters? You mentioned increasing duration and consolidation of contracts. Do you think this could lead to changes to the set aside rules under the new administration? Thank you.

[Kevin M. Phillips:]

So the small business trends are fairly stable. They still impact the business, which titles can carry over their headwinds from last year for that. And it's hard to tell whether there will be changes within the administration change. And I think we'll just have to wait and see what the – frankly with the FY 2018 budget process negotiations, if there will be any trends one way or the other around that. So it's too early to tell.

[Kwan Hong Kim:]

Got it. And embedded in your guidance, has there been a change in the percentage of re-competes? I believe it was approximately 10% from the previous quarter.

[Judith L. Bjornaas:]

Yeah. As we cleared through first quarter now, about 7% of our revenue at the midpoint of the guidance is expected to come from re-competes.

[Kevin M. Phillips:]

Yeah. And I'll add to that briefly. We have over $7 billion worth of proposals we expect to submit this year. And if you recall, last year we had a similar number, which is fairly healthy. And if you look at the book-to-bill levels we've had, which we look at the proposal volume in what I would consider a fairly light re-compete year this year, it looks very favorable if we were able to win and continue to win a fair share of those bids that we have outstanding.

[Kwan Hong Kim:]

Thank you very much. I'll get back into queue.

[Operator:]

Thank you. Our next question is from Gautam Khanna of Cowen & Company. Your line is open.

[Gautam Khanna:]

Yes, thanks. Good afternoon. First off, great quarter.

[Kevin M. Phillips:]

Thank you.

[Judith L. Bjornaas:]

Thank you.

[Gautam Khanna:]

Nothing to pick at, it's a really nice feeling (20

[Kevin M. Phillips:]

Are you done? Are you going to sign that? Give me dollar or something?

[Gautam Khanna:]

That's it.

[Kevin M. Phillips:]

Okay. Well, thank you, though. We appreciate it. We've worked very hard and we're very happy with the team, and frankly everybody in the company that's been able to work through to get to this point. We're excited.

[Gautam Khanna:]

Yeah, no, it looks like you're really making some impressive headway. I had a couple questions. So in your prepared remarks, you mentioned that the M&A pipeline seemed to be fairly active. And just can you give us any more color on maybe size of potential acquisitions and areas of focus? Any sort of parameters you can give around that.

[Kevin M. Phillips:]

Yeah, so generally, I think we still remain within a level that we don't buy sales. We're looking at targeted capabilities to combine with about 3 times to 3.5 times leverage space within our comfort zone. And we're very targeted on the combination, and frankly, there are a number of good businesses out there to look at. I'm sure that they will all be and have been fairly competitive. But we think the combinations will be very exciting because of the position. So we're continuing to focus on certain IT capabilities, whether that's cyber, cloud, some of the capabilities we've talked around, some software and systems engineering capabilities in the markets that we are in and peripherally around some customer sets that we want to be in. We want to make sure the combination allows us to go after other procurements as a prime contractor. And I would use this that we're a long-term view on acquisitions. The ATG acquisition that we made many years ago or several years ago allowed us to work towards being able to bid with this contract, the one that Dan spoke of, and the combination of our past performance in other pieces of our business that contract vehicle and acquisition and some other capabilities combined helped us to position to win that bid. So, acquisitions take a while to roll together to have a long-term effect, but we're excited about the positioning we have and are looking forward for more acquisitions along those lines.

[Gautam Khanna:]

And to that point, Kevin, do you anticipate there's going to be more of the ATG type size, $40 million of annual sales, or are there bigger opportunities you're considering? And if so, how much larger?

[Kevin M. Phillips:]

There are a wide range of opportunities as with any year that we look at. Again, we're looking for the combination to provide us top line growth and again it's a competitive market for good businesses, so we're trying to be thoughtful about committing to large acquisitions versus the ability to build it in and go after it and get the acquisition built into our business.

[Gautam Khanna:]

Understood.

[Kevin M. Phillips:]

That business is up (23

[Gautam Khanna:]

Okay. That's good. That's encouraging to hear. You guys talked a little bit about the EBIT margin guidance, and in Q1 you came in at 5.8%, I guess. Was there anything unusual in the quarter in terms of one-time profit accruals or any sort of nonrecurring items that dampened things as we go forward?

[Judith L. Bjornaas:]

We did have a couple of one-time pick ups from some fixed-price completion contracts and award fees were higher in this Q1 than they were in Q1 of 2016. So those were kind of positives. As Kevin mentioned, we're going to continue to invest in the business, so that's why we're keeping the 5.6% to 5.7% full year range.

[Gautam Khanna:]

Okay. That makes sense. I didn't realize that. And was there anything on the revenue side that was sort of one-time in nature or unusual, ODC flow, or?

[Judith L. Bjornaas:]

ODCs were higher than we projected, so that's kind of why we came in as high as we did. And those are lumpy. They come when they come, so it's hard to predict exactly when some of those flow through.

[Daniel J. Keefe:]

This is Dan. We also had ramp up in programs which certainly helped our top line.

[Judith L. Bjornaas:]

Yeah.

[Gautam Khanna:]

Right. Absolutely. Okay. And just one last one, we've been a little bit further in to the Trump administration. I just wondered are there any vulnerabilities within the portfolio in some of the less favored agencies? You've done a great job at DHS and you talked a lot about the contract wins of late, but are there any areas of negative exposure that you're a little more concerned about at state department or EPA or what have you? Anything that comes to mind that could be a potential risk item there we're not fully appreciating?

[Kevin M. Phillips:]

I would – I think we're in a very good position, because if you look at the business we have, it's not in DoD and intelligence community. It's around DHS Cyber, Customs and Border Patrol and federal health IT. So the exposures to risk areas is very limited in my view compared to the priorities of the administration, and the upside is fairly significant. We hope to see that in additional proposals over the next few years and contract awards.

[Gautam Khanna:]

Thanks again, guys, and congrats on a great quarter.

[Kevin M. Phillips:]

Thanks.

[Operator:]

Thank you. Our next question is from Ben Klieve of Noble Capital Markets. Your line is open.

[Ben Klieve:]

Hi. Thank you. Just a couple of quick questions. One, regarding the awards that you had in the quarter that you said were 60% new business, I'm wondering if that 60% includes both increases in scope as well as new business or if that 60% was purely new awards for you guys?

[Kevin M. Phillips:]

It's a combination. It's mainly new contracts in the combination, but there are some scope increases across the business as well. And I think I mentioned that in my comments.

[Ben Klieve:]

Oh, I'm sorry if I missed that, but okay, but primarily new awards, okay. And then just a couple of questions just on the top line for the quarter here. Are you able to quantify the inorganic contribution at all from Edaptive and Oceans Edge for the quarter?

[Judith L. Bjornaas:]

In general, it's about half and half organic and inorganic for the quarter.

[Ben Klieve:]

Okay. Perfect. Actually, we got that one already. So that actually does it for me. Thank you very much.

[Kevin M. Phillips:]

Thank you.

[Operator:]

Thank you. Our next question is from Ed Caso of Wells Fargo. Your line is open.

[Edward S. Caso:]

Good evening. Congrats. Hey, Judy, I missed the tax rate assumption in guidance.

[Judith L. Bjornaas:]

For the full-year it's 38.3% now, so down from the 38.5% last quarter because of the Q1 lower rate.

[Edward S. Caso:]

And that was just settlements of prior deals, or was that related to the new accounting standard?

[Judith L. Bjornaas:]

It was primarily discrete items related to 2016's final tax provisioning. No major impact from the stock option tax change.

[Edward S. Caso:]

Are you still providing the expected OCO contribution for this year?

[Judith L. Bjornaas:]

We haven't really talked about it. It's been pretty stable the last couple of years, and we're expecting it to remain at the same levels this year.

[Edward S. Caso:]

Okay. Great. And the marginal tax – I'm sorry, the pricing at the margin, are you seeing – I mean, you're talking about moving to sort of better quality areas. So are you seeing better average pricing for the company?

[Judith L. Bjornaas:]

We're starting to see more proposals come out back to best value. We're also expanding more into the civilian space, like this CPB (28

[Kevin M. Phillips:]

Right. So it's Kevin. If you recall, we have some older bids that are still on kind of a tempered fee. But if you look at the out years, I do think and we do expect to have some level of incremental margin improvement based on the market position we're in. I think we've guided 10 basis points to 20 basis points on that.

[Edward S. Caso:]

Okay. I think I heard you said comfort with financial leverage reaching 3.5 times. To me that suggests that you'd be willing to take on a fairly large acquisition. So I guess the question is, what's the likelihood of that being the case? I mean would you go after a $500 million or $1 billion deal?

[Kevin M. Phillips:]

Again, the combination has to make sense. We look to make the combination, go after very targeted areas. So they would have to be very good businesses. And I would not want to suggest that that's a change or a shift in our intent. It's more what businesses are out there and how do they fit into our profile and expectations.

[Edward S. Caso:]

Great. Thank you.

[Operator:]

Thank you. Our next question is from Robert Spingarn of Credit Suisse. Your line is open.

[Unknown Speaker:]

Hi. Good afternoon. This is Joe calling in for Rob. Nice quarter. I wanted to start with the bookings as well, obviously phenomenal in the quarter, in large part due to those two very large contracts that you called out. But I wanted to ask about the pace of awards more generally. Are you finding that even though we don't have finalized budgets yet and fiscal 2018 is obviously still TBD, but are you finding that delays in awards are subsiding a bit? The customer is feeling a little bit more comfortable signing contracts, since budgets are generally known to be trending positively even if the exact dollar numbers aren't yet known. Can you give us some color on that?

[Kevin M. Phillips:]

Yeah. My general view is that we have seen more certainty in the timeline. There may be some delays, but I think were more administrative than uncertainty. And if you think about the long-term effect, how long the Budget Control Act caps have been in place, people already know what their priorities are within a framed budget. And any time that there's a $15 billion-plus up in defense or a $1.5 billion-plus up in DHS around border, those are very positive things. I think that our customers have fairly good clarity on what their priorities are, and if they get additional funding what they will be. And that's showing up in their procurements and their timelines. There still are delays though.

[Daniel J. Keefe:]

Yeah. And this is Dan. I'd just add it's very helpful that the contracts now are longer in duration. You're seeing five-year contracts, where a couple years ago they were two years. That clears the queue, if you will, for the contracting agencies. So I think that's all helpful in moving contracts through the system.

[Unknown Speaker:]

Okay. That makes sense. Thank you. And then on the capital allocation, just back to the M&A, which is obviously your stated preference. But given that we are entering a budget up-cycle, are you finding that there are fewer willing sellers or prices are a little higher than you might like? And to that point obviously, given the cash generation being quite strong, the stellar balance sheet, in the absence of any suitable M&A candidates, could you deploy some of that cash to a buyback, for example, or something that might give you a little bit of help on the bottom line? I mean you clearly have that flexibility, so would appreciate your thoughts there.

[Kevin M. Phillips:]

Sure. Yeah. So again we have enough business opportunities in front of us in terms of candidates. And we want to continue to focus in that regard, but we do recognize the amount of cash that we hold. And that's something that George and I and the board, we just constantly talk about. And if we get to the point where we don't have strong candidates or we have to make some decisions around other alternative uses, we'll certainly consider that as we do in the ordinary course.

[Unknown Speaker:]

Okay. Got it. And then just finally, just housekeeping, Judy, is there anything we should keep in mind with regard to the cadence for the rest of the year? Any specific tax events or accounting items to be aware of?

[Judith L. Bjornaas:]

No.

[Unknown Speaker:]

Okay. Great. Terrific. Thank you. Thank you, all.

[Kevin M. Phillips:]

Thank you.

[Operator:]

Thank you. We do have a follow-up from Joseph Vafi of Loop Capital. Your line is open.

[Joseph A. Vafi:]

Hi. Just one quick follow-up. I may have missed it. Did you report your organic revenue growth in the quarter? And then also it sounded like you said direct labor was up year-over-year and sequentially and I was wondering if that was organic as well. Thanks.

[Judith L. Bjornaas:]

Yeah. So we said about half and half of the growth was organic and inorganic. And yeah, direct labor is up organically as well, year-over-year and quarter-over-quarter.

[Joseph A. Vafi:]

All right.

[Kevin M. Phillips:]

I would say that from a labor standpoint, we're – because of the contract awards, we have seen and we'll continue to see an increase in our direct labor supporting programs and that's a very positive thing for the business long-term.

[Joseph A. Vafi:]

Great. Thanks very much.

[Operator:]

Thank you. We also have a follow-up from Gautam Khanna with Cowen & Company. Your line is open, sir.

[Gautam Khanna:]

Yes. Judy, I was just wondering if you could quantify the one-time benefit from the contract close-outs or whatever, the fixed-price awards fees and the like.

[Judith L. Bjornaas:]

There was a number of moving pieces. I would say without those items, we would have been towards the lower end of the guided range for the year.

[Gautam Khanna:]

Okay. The guidance went up by $0.01, is that right, for the full year?

[Judith L. Bjornaas:]

At the bottom – at the top end and $0.02 on the bottom.

[Gautam Khanna:]

Got it. So it was $0.01 to $0.02 in the quarter that was – okay. Thank you. I appreciate it.

[Operator:]

Thank you. At this time, there's no other questions in queue. I'll turn it to Mr. Vather for closing remarks.

[Stephen Vather:]

Great. As usual, members of our senior team will be available for any follow-up questions. Thank you all for your participation on today's call and your interest in ManTech.

[Operator:]

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone, have a great day.