Executives Mr. George Pedersen - Chief Executive OfficerMr. Robert A. Coleman - Pres, Chief Operating OfficerMr. Kevin M. Phillips - Chief Financial Officer and Exec. VPMr. Joseph Cormier - Vice President, Corporate DevelopmentAnalysts Michael Lewis –BB&T Capital MarketsJoseph Vafi – Jefferies & CoBill Loomis – Stifel NicolausTimothy Quillin - Stephens Inc.Ferat Ongoren - CitigroupGotham Connor - Cowen and CompanyAlex Hamilton - Jesup & Lamont.Good afternoon, my name is Dianna and I will be your conference facilitator today. At this time, I would like to welcome everyone to the ManTech Third Quarter 2007 Earnings Conference Call.Mr. Cormier, please go ahead.Joseph Cormier Thank you and welcome to ManTech International Corporation’s Third Quarter 2007 Earnings Conference Call. We appreciate you joining us this afternoon and wish you alla Happy Halloween. My name is Joe Cormier and I am Vice President of Corporate Development. Leading today’s call from ManTech are George Pederson, Chairman of the Board and Chief Executive Officer. Bob Coleman, our President and Chief Operating Officer, and Kevin Philips our Executive Vice President and Chief Financial Officer.In our prepared remarks George will discuss ManTech’s strategic positioning and the budget outlook. Bob will review our operational highlights from the quarter and the future business prospects and Kevin will review our financial performance in detail. Before we begin our discussion, it is important that we remind you that on this call we will make statements that do not address historical facts and that 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 different materially from anticipated results and include the risks and uncertainties identified in our earning’s press release under the caption forward-looking information.For full discussion of these factors and other risks and uncertain needs, please refer to the section entitled risk factors in ManTech’s annual report on Form 10-K file with the SEC on March 9, 2007 and in ManTech’s other public filings.Also, we undertake no obligation to update any of the forward-looking statements made on this call.Now I would like to turn the call over to George Pederson. George?George Pederson Good afternoon and thank you for participating in today’s call. I am pleased to announce another excellent quarter ManTech International. As you saw from our press release, we delivered a revenue of $383 million which represents over 35% growth with 18% coming organically.Our earnings at $0.51 per share were up 24% over last year’s $0.41 in the third quarter. Our positioning in the center of the national security arena continues to provide impressive growth and we expect a strong finish in 2007 for our corporation.Along with very strong operating results, we once again generated exceptional cash flow of $41 million during the third quarter. These were the results of our growing profits and successful receivables collections which resulted in DSOs of just 67 days.Based on this outstanding cash flow, we were able to reduce our borrowings by over $47 million during the quarter, bringing our total debt outstanding to $86 million as of September 30.As a reminder we borrowed $170 million to fund the SOS acquisition in May of 2007 and within five months we have paid down over $84 million.Given the strength of our balance sheet and ample amount of purchasing power, ManTech has today, we are focused on finding the right additional strategic acquisitions to further accelerate our earning’s growth in future years.Our acquisition pipeline is healthy and in fact we are working on several medium term opportunities. We are very comfortable adding new companies into the fold from an integration point of view as SOS’s strong performance has demonstrated our ability to do so.As I have said many times before, the only concern I have going to any new government fiscal year, is having appropriations completed for defence, intelligence, and homeland security community, given that 93% of our revenue comes from these sources.As you are all aware, our government is currently operating on this continuing resolution. I would like to remind everyone that we have been faced with difficult budget environments over these past few years and still delivered strong results.Again, we produced 14% organic growth in ’05. 12% in ’06 and I am projecting 14% to 15% in ’07. As I have said many times before, our growth demonstrates through billions of our intelligence and defence markets.Before we expect to have an appropriation bill by the end of the year, and I am confident that ManTech will be able to deliver continued strong growth and revenue and earnings in 2008.In closing, we are positioned in the center of the nation’s defence and war in total submissions. We continue to enjoy trusted relationships with our customers who are recipients of the priority funding in the areas of national security. We have nearly 7,000 dedicated employees ready to meet our customer’s critical missions here and in over 40 countries around the world.The third quarter 2007 results continue to demonstrate our success. We look to continue executing in support of our nation, our customers and our employees are most important in our shelves, and with that I will turn the call over to Bob Coleman.Bob Coleman We are all very pleased with our Q3 results and you will see from my comments that we are well positioned for a strong finish to the year and we have a solid foundation for growth and continued profitability as we move into 2008.As you saw in our press release, we delivered strong revenue growth for the quarter and our operating margin improvement plan produced better than expected results. Our 7.9% operating margin was up from 7.3% in the first and second quarters and was the result of continued headcount growth and an ongoing focus to improve profitability across the corporation.We are very pleased with our business agility in responding to this initiative and all of our line managers have done an outstanding job driving utilization rates controlling cost and managing to our margin goals and objectives. We look forward to continued margin improvement through the remainder of the year and in to 2008.During the quarter we added another 130 net employees which brings us to over 430 year-to-date which is well ahead of our initial 2007 staffing plan. Even with our success in driving that adds, we still have over 500 open positions with a significant amount requiring the highest level security clearances.Our annualized turnover rate in the third quarter was again 20% which is consistent with industry averages. Bookings were again strong for the quarter and totalled $407 million. We continue to see a number of opportunities shifting to the right and this could impact our fourth quarter bookings depending on the timing.New business wins and contract expansions accounted for over 80% of the bookings total for the quarter and 75% of the year to date bookings. This translates into about $150 million of executable annual revenue going into 2008 or over 10% incremental growth on our $1.4 billion revenue base.Additionally, total backlog now stands at $3.51 billion. This represents a 30% from $2.71 billion at the end of September 2006. Funded backlog grew 68% year-over-year to $846 million and was up $100 million on a sequential basis which provides additional comfort to our 2008 growth expectation, and again points to ManTech’s positioning at the heart of National Security missions.Our qualified pipeline now stands at $9.3 billion and we have 28 opportunities in the pipeline of over a hundred million.As we discussed in the last quarter, ManTech is extremely well positioned to support the Army and Marine Corps expanding MRAP requirements. As important, we are also well positioned to support the Army’s upcoming reset and readiness initiatives. As you know, the MRAP vehicles are beginning to arrive in Theodore and in response to this new arrivals, the government has added $90 million to our Countermine contract and extend it through February 2008.This new funding represents an expansion of the current Countermine program and also includes one new support location. ManTech is well positioned to support this effort and we expect the Army to continue the Countermine program throughout 2008 and beyond. We are honored to be a part of this potentially life-saving mission and we view our role in providing logistic support and supply chain management, operations and maintenance and the installation maintenance training and support of the ID jamming devices to be a key part of the mission’s success.I would like to turn now to one of our key intelligence related programs that we believe provides significant long term growth for our company.We have briefed you many times in the past on our strategic position in the intelligence community and our focus on knowledge management and information sharing and collaboration within that community. I am pleased to inform you that ManTech has been tapped to support one of the Director of National Intelligence, his key strategic intelligence collaboration and sharing initiatives called Analyst Space or Ace Base.Ace Base is the next generation intelligence analysis work environments spearheaded by the DNI with the intent to transform the way the intelligence community shares information. It is a social networking in collaboration solution similar to MySpace and Facebook that will be focal point for facilitating information sharing across all 16 intelligence agencies. ManTech was selected to build this solution because of our mission expertise and extensive experience into developing these types of applications within the intelligence community.We expect that Ace Base will provide a platform for many innovative add-on applications similar to the way Facebook provides this type of platform in the commercial world and as the primary developer, we would expect to participate in these new initiatives and efforts.Ace Base is a key step in transforming the way the intelligence community collaborates and we are excited to be a partner on this program. Based on our market position, recent hires, our new business wins and our strong business development pipeline, we are forecasting fourth quarter revenue of $389 to $404 million. This implies 34% to 39% overall growth with an 18 to 22% organic growth rate.We have raised the bottom end of our full year 2007 revenue guidance by $15 million to reflect the strong revenue performance in the third quarter. The current guidance for 2007 revenue is $1.415 to $1.43 billion which represents 24% to 26% overall growth and 14% to 15% organic growth.Our continued operating margin improvement, and a strong cash flow expected in the fourth quarter has allowed us to increase our EPS significantly from our previous guidance range. The new EPS guidance is a $1.87 to a $1.90 which is up $0.08 on the bottom end and $0.5 on the top end and Kevin will fill you in on the details.We continue to execute on our goal becoming the premiere provider of National Security solutions within the intelligence defence and Homeland Security related communities. We will continue to focus on driving strong organic growth and start an improvement coupled with strategic acquisitions that enhance our capabilities and extend our markets throughout 2007 and beyond. With that I will turn it over to Kevin.Kevin Phillips Thank you Bob and good afternoon everyone.As George and Bob covered earlier, we are pleased to report a very strong financial quarter with continued growth in our operations as revenues grew to $383.4 million. Increasing 35% from last year’s third quarter revenues between $83.7 million where an organic growth rate of 18% on a pro forma basis. Our organic growth is derived from pro forma revenues for the third quarter of 2006 of $325 million which includes third quarter 2006 revenue from SRS and GRS.This growth continues to be driven by our expanded activities in the intelligence, defence and Homeland Security communities. For the quarter, over 97% of our revenues came from Federal government sources. Defence, intelligence and Homeland Security related business comprised 93% of our revenues. The portion of revenues coming from contracts billed on time and material basis was 61% this quarter plus contracts for 24.4% and fixed price contracts represented 14.6%.Our Countermine contract accounted for approximately $54 million in revenue from the third quarter, while our Regional Logistic Support Contract or RSC generated over $23 million. As we have discussed in the past, these contracts consist of a heavy amount of bill pass throughs and therefore generated lower margins for ManTech business. Combined, these contracts produced 3% operating margins while the rest of the business delivered over 9% operating margins.Our overall third quarter operating margin was 7.9%, which was up from 7.3% in both the first and second quarters of 2007.As Bob mentioned, this improvement was ahead of expectations and resulted in $34 million of operating profit for the quarter. Our increased labor growth and continued focus on improving profitability with the main drivers to the better than expected margin.Additionally, we had a one time $900,000.00 adjustment to be intangible value of a software product. Without this one time event, our operating margin would have been 8.1 % for the quarter. The better than expected cash flow in the quarter also drove our net interest expense in the quarter of $1.7 million. This is less than the $1.9 million we had expected. This translated into net income of $17.5 million which resulted in diluted earnings per share of $0.51 on $34.6 million fully diluted shares outstanding.Looking at the balance sheet and cash flows, our cash position was $3.5 million with $85.7 million of debt. Based on our strong cash collections, DSOs came in at 67 days. I am very pleased at how quickly SRS was able to adopt our processes and reduced our DSO from what was historically in the low 80’s to our corporate average and only their first full quarter within a public company. This allowed us to continue our impressive cash collections. In regards to our cash flows, the third quarter was excellent.Operating cash flows during the quarter were over $41 million and allowed us to reduce our borrowings from the SRS deal by over $47 million in the quarter. Moving to our guidance which does not include the impact of any future acquisitions or divestitures, we have set initial fourth quarter guidance for revenues of $389 to $404 million. As we look into the fourth quarter, we expect operating margins of 8.15% to 8.25% which is in line with our normalized operating margin in the third quarter.Guidance for diluted earnings per share for the fourth quarter is in the range of $0.53 to $0.56 based on weighted average shares of $34.9 million in the fourth quarter.Based upon our performance in the quarter, the incorporation of SRS as well as our ability to continue growing our direct labor for the year, they have adjusted our revenue guidance range up to $1.415 to $1.43 billion. We have also raised our guidance range for diluted per share for the full year 2007 up to a $1.87 to $1.90 per share.Our 2007 EPS is based on weighted average shares of $34.6 million for the full year 2007. Fourth quarter and full year guidance includes a 38.9% estimated tax rate, and we expect interest expense to be approximately $1.3 million in the fourth quarter of 2007.Looking forward to 2008, we have expressed our confidence in delivering strong growth and revenue and earnings next year. In an effort to keep our investors aware of our current views and continued information flow between now and when we report our fourth quarter earnings, we plan to provide our initial guidance for the full year 2008 in mid December and we will follow up with the formal date and announcement. Within this plan, to update this guidance for our 2007 new earnings conference call in February.In closing, we are excited about the prospects of our business as we are operationally well positioned for continued growth in revenues and profits, supported by our strong balance sheet and cash flows. And now we would be pleased to take any questions you may have.Question-and-Answer Session Operator We will go first to Michael Lewis, BB&T Capital Markets.Michael Lewis –BB&T Capital Markets Hello, great quarter by the way. So George, I was wondering if we could talk SRS for a second. We have had it in for a few months now and I was wondering if you could tell me about new opportunities they are opening. I would be interested in whether you are seeing new business opportunities over at NRO or NSA as a result of SRS?George Pedersen I think it is fair to say we are seeing additional opportunities, I do not know if we can go into precise detail Bob, are we allowed to do that?Bob Coleman No, on account of some of the programs.George Pedersen We have worked very closely with them and in a couple of areas we see opportunities. The sales exceeded what we expected and I think the opportunities are greater than have ever expected, but I cannot give you precise details.Bob Coleman SRS does not do a lot of work at NSA, so we do not see a lot of future growth there but where we are seeing an expansion is on the DHS programs particularly the DNDO contract that they have. That contract is ramping up nicely, and the government, we believe will continue to fund it strongly going forward in the NRO.George Pedersen Tell him what is DNDO.Robert A. Coleman Domestic Nuclear Detection Office. In NRO, as you know we support space station radar program there and a couple of programs. DNDO is changing some of their organizational structure and we believe that we will play a significant role in supporting that structural change as well.Michael Lewis –BB&T Capital Markets Bob are you seeing any budget pullbacks specifically in DNDO right now? Or is it kind of just flowing through?Bob Coleman I think there are some delays but I would not say pullback.George Pedersen I think they are looking also. They are making some changes structurally and some different people are moving around taking new assignments, but I do not think there is going to be a reduction and their mission. Michael Lewis –BB&T Capital Markets Okay, that is helpful, and then just one quick question for Kevin and I will get out of the way. With regards to the EBIT margin is going to come in higher in the fourth quarter than I was expecting, now is this a sustainable level north of 8% going into ‘08 because typically what we see in the model is a strong September and a slight decline in the December quarter, can you help us out there?Kevin Phillips Yes, I think it is at a sustainable margin primarily based on the labor growth overhead and that we expect to continue to have, based on the requirements that we support, so I do expect the 8-1 to be sustainable.Michael Lewis –BB&T Capital Markets Okay, thank you. Great quarter.Operator Thank you sir, we will go next to Joseph Vafi of Jefferies.Joseph Vafi – Jefferies & Co Maybe we could talk, I know, a little bit-- I think it might have been you Bob, you talked a little bit about risk network and your positioning there. Maybe some commentary around some the vehicles that you have in place, maybe take advantage of the risk network here. Do you see that start to grow here over the next year or so?Robert A. Coleman Yes, I think with regards to the reset initiative, if you look at the type of support, we currently do on Countermine and JERV.. Components of that work are heavy on the repair and maintenance side which we think lends itself very well to the reset initiative. How they will use those contracts to support those efforts, I do not know. It remains to be seen. But certainly with our RSC contract there is plenty of opportunity to do that.Joseph Vafi – Jefferies & Co Okay, and then if we look at in the RSC. Is there any large recompetes we should be looking at? Obviously Countermine’s going through early February ’08. But outside of Countermine, is there anything we should be looking at?Robert A. Coleman I’d say Countermine is the major driver. This year we have had a lot of our recompetes slide into next year and some of those are already being extended. So we think that those may push out even into 2009. So major re-compete in 2008 would be Countermine.Joseph Vafi – Jefferies & Co Okay, and then kind of extrapolating here, looking at strong new contract wins in the quarter combined with an increase in the funded backlog sequentially. Is it fair to say that some of these new contracts are making their way into funded backlog at this point? Or is that older work that is driving the funded backlog at least as we exit and working at those numbers?Robert A. Coleman Yes, the increase in funded backlog was primarily driven by the Countermine add-on and the Jerv add-on on which came late in the quarter in our well-funded tasks.Joseph Vafi – Jefferies & Co So then some of the increase in the new awards that we have seen in the quarter or expansion of existing scope, that really has not made its way into the funded backlog matrix yet?Robert A. Coleman I would say it is kind of a mixed bag there, it depends on the organization issuing the contract and the mission support. But it is really a mix of funding from those customers.Kevin Phillips I would say that most of our operating mix had an increase in funded backlog at the end of the quarter But the most identifiable or largest one is in the related Countermine activity. But all were up.Joseph Vafi – Jefferies & Co Right, okay and then maybe just one final question. I know that organic growth includes contribution pro-forma from SRS and GRS. I would imagine—I just want a confirmation that those organic growth rates were indeed higher than the base business in the quarter.Robert A. Coleman Yes.Joseph Vafi – Jefferies & Co Okay, any more color there on from the rate of growth from the base versus the recent additions here?Robert A. Coleman Yes, ManTech’s core growth is only a couple basis points between the 16% that we have, sorry 18%. So about 15% for ManTech core and the other two were above 30%.Joseph Vafi – Jefferies & Co Great. Thanks a lot. Great quarter.Robert A. Coleman Thank you.Operator We will go next to Tim Quillin, Stephens Inc.Timothy Quillin - Stephens Inc. Good afternoon and happy Halloween. With regards to the Countermine, first of all, what was the term of the $90 million extension, the term of that contract?Bob Coleman It was extended through February of ’08.Timothy Quillin - Stephens Inc. From what period? Is that a two month extension?Bob Coleman December, I am sorry. It was extended from December ’07 through February.Timothy Quillin - Stephens Inc. Okay, so a two-month extension. So that implies obviously a very big run-rate right now?Bob Coleman Keep in mind though, Countermine is requirements driven, and with all the new vehicles arriving in Theodore, yes, you would expect to see an increase in those requirements, but it is too early to tell what the spend pattern is going to be like on that.Timothy Quillin - Stephens Inc. Right, and my understanding of your work to date for Countermine has been for a kind of a narrow subset of MRAP vehicles, the number of vehicles that you are supporting expand, in other words, are you supporting all of the manufacturing of MRAP?Bob Coleman Yes, it has expanded out beyond to Buffalo. It includes the Cougar and the RG-31, the aardvarks and just about all of them now.Timothy Quillin - Stephens Inc. Okay, and how should we, I think I ask this question every quarter for the past in the year, but how should be think about this in ’08 or what kind of feedback are you getting from the customer. I understand that it might be a little episodic in terms of the initial role out of MRAPs, but it is a big program, do you expect it to kind of continue at a very high rate through 2008?Bob Coleman We expect it to continue through 2008. Remember, they are only developing the procurement strategy now, so we do not know what kind of delay that will impose on the existing fronting, in other words, it is extended through February right now with $90 million, but it could extend out beyond that based on the procurement strategy.George Pedersen Please remember also, this program is a high priority procurement method that does not guarantee funding, but generally, America is very focused on this. Timothy Quillin - Stephens Inc. Yes, absolutely. Kevin, just one ditto question, was there any revenue from the JERV contract and is that vehicle being used at all, or is Countermine just a name?Kevin Phillips The JERV for the third quarter is about $6.5 million, again slightly up from prior, but not significant. There are additional task quarters that were placed on there for potential use, but again, it is going to be based on the flow in the environment.Timothy Quillin - Stephens Inc. Okay, great quarter, guys.Operator Thank you, we will go next to Ferat Ongoren of Citigroup.Ferat Ongoren - Citigroup Good afternoon. Good numbers. First question is on the cash flow side, what is your expectation for the fourth quarter cash flow?Bob Coleman Well, obviously we have had a very good year in cash flow and we had previously targeted cash flow to be about one time as net income. I think that trend is increasing and I expect to see it above 1.1 times, but given the fourth quarter, I have a thing about 1.1 times net income.Ferat Ongoren - Citigroup And in terms of the booking of the liquidation on the acquisition on SRS, do we have still further offset with that in terms of monetizing some of the receivables?Bob Coleman No, I think that they have become or come in line with the rest of ManTech, and I do not expect to see a lot of additional reduction in their DSOs. We are just happy that they were able to get there as quickly as they did and again, it is a good group of people and a good combination.Ferat Ongoren - Citigroup Okay, and in terms of this opportunity, you talked about Ace Space, how should we think about the revenue contribution in the rest of this year and maybe in 2008?Bob Coleman Well for the remainder of this year, it is not significant, but we had experience with programs like this in the past where we start out with a prototype system and then it expands to several hundred million dollar program within an individual organization. This one of course goes across the entire community, so we are optimistic that there will be significant growth in this program. I cannot give you details on the amount though right now.Ferat Ongoren - Citigroup Okay, and in terms of the Countermine and maybe the MRAP opportunity, do you think you will have enough visibility going into 2008 by mid December? Can you provide the guidance?Kevin Phillips We expect to have more visibility whether we have enough is going to be again subject to the acquisition process, but at the same time we do not want to delay providing an initial look until the end of February, so I think we are going to have enough visibility to provide to look at that time.Ferat Ongoren - Citigroup Okay, and then a final one, is it possible for you, sometimes, it mixes up with other departments, would it be possible for you to comment on the organic growth of the intelligence business this quarter?Kevin Phillips No, it is not something we disclose. Again, all of our business is healthy. We are well positioned in all of our funded backlog, this is increasing, but again this is not a measure we provide.Ferat Ongoren - Citigroup Okay, thanks very much.Operator We will go next to Gotham Connor of Cowen and Company.Gotham Connor - Cowen and Company Thanks and good quarter! Could you walk us through-- I know you have an upcoming recompete with the State Department under status and what the timing is, what the size is, and how you assess your own?Bob Coleman The SC recompete is what you are referring to. That contract is currently being moved over to one of our internal state department contracts intact with all of our subs in place. It is in recompete right now and presentations are going on. We are scheduled for orals later in early November. Of course we are very comfortable with our recompete position on that contract. We understand the customer’s priorities. We know their strategy and direction and we are pretty comfortable winding up on top of this program, we have over a hundred people supporting the program, about $20 million. I think about 25, if I recall right. Main competitors are the typical guys within our peer group