SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Commission File No. 000-49604

(Exact Name of Registrant as Specified in its Charter)

Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	MANT	Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of ~~November~~August 1, ~~2021~~2022 there were ~~27,562,407~~39,382,197 shares outstanding of our Class A common stock and ~~13,176,695~~1,586,695 shares outstanding of our Class B common stock.

Item 1.Financial Statements

(In Thousands)


		(unaudited) Nine months ended September 30,					(unaudited) Six months ended June 30,
		2021		2020			2022		2021
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:	CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:					CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	Net income	$	106,893	$	88,366	Net income	$	54,178	$	68,937
Adjustments to reconcile net income to net cash flow from (used in) operating activities:
Adjustments to reconcile net income to net cash flows from operating activities:						Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	Depreciation and amortization	57,438		51,281		Depreciation and amortization	41,963		37,887
Noncash lease expense	Noncash lease expense	27,002		20,738		Noncash lease expense	15,174		15,855
Stock-based compensation expense	Stock-based compensation expense	11,516		8,533		Stock-based compensation expense	8,346		7,556
Deferred income taxes	Deferred income taxes	10,948		11,127		Deferred income taxes	(4,099)		3,274
Change in allowance for bad debts		(3,499)		5,244
Contract loss reserve	Contract loss reserve	—		(372)		Contract loss reserve	(1,391)		—
Bad debt expense						Bad debt expense	(1,247)		(999)
Change in assets and liabilities—net of effects from acquired businesses:	Change in assets and liabilities—net of effects from acquired businesses:					Change in assets and liabilities—net of effects from acquired businesses:
Receivables—net		14,638		10,877
Receivables-net						Receivables-net	(33,158)		(56,912)
Prepaid expenses						Prepaid expenses	(11,286)		(9,186)
Taxes receivable—current	Taxes receivable—current	4,130		(5,825)		Taxes receivable—current	1,941		5,247
Prepaid expenses		(3,843)		(7,838)
Other current assets	Other current assets	1,180		(1,333)		Other current assets	6,336		401
Employee supplemental savings plan asset	Employee supplemental savings plan asset	(3,375)		(2,042)		Employee supplemental savings plan asset	7,192		(2,836)
Other long-term assets		(3,775)		(1,939)
Other assets						Other assets	(1,315)		(2,415)
Accounts payable	Accounts payable	24,850		23,490		Accounts payable	(7,923)		30,392
Accrued salaries and related expenses						Accrued salaries and related expenses	(54)		1,330
Contract liabilities						Contract liabilities	(2,033)		(6,159)
Accrued expenses and other current liabilities						Accrued expenses and other current liabilities	245		(5,896)
Operating lease obligations	Operating lease obligations	(26,465)		(22,102)		Operating lease obligations	(18,733)		(17,573)
Accrued expenses and other current liabilities		(6,753)		(925)
Contract liabilities		(2,292)		12,438
Accrued salaries and related expenses		(2,123)		29,812
Accrued retirement	Accrued retirement	(1,469)		(2,328)		Accrued retirement	(10,177)		(1,977)
Other long-term liabilities		—		100
Other	Other	49		(169)		Other	(94)		(469)
Net cash flow from operating activities	Net cash flow from operating activities	205,050		217,133		Net cash flow from operating activities	43,865		66,457
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:	CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:					CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Purchases of property and equipment	Purchases of property and equipment	(41,199)		(53,685)		Purchases of property and equipment	(23,409)		(31,077)
Proceeds from corporate owned life insurance	Proceeds from corporate owned life insurance	227		4,137		Proceeds from corporate owned life insurance	5,358		227
Investment in capitalized software		—		(5,193)
Proceeds from sale of property and equipment		—		869
Investments in capitalized software						Investments in capitalized software	(375)		—
Net cash (used in) investing activities	Net cash (used in) investing activities	(40,972)		(53,872)		Net cash (used in) investing activities	(18,426)		(30,850)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:	CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:					CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Borrowing under credit agreement		207,500		285,500
Repayments under credit agreement		(222,500)		(322,000)
Borrowings under credit facility						Borrowings under credit facility	40,500		164,000
Repayments under credit facility						Repayments under credit facility	(40,500)		(149,000)
Dividends paid	Dividends paid	(46,332)		(38,689)		Dividends paid	(33,574)		(30,866)
Proceeds from exercise of stock options	Proceeds from exercise of stock options	8,020		5,918		Proceeds from exercise of stock options	5,152		6,433
Debt issuance costs		(3,315)		—
Payment consideration to tax authority on employees' behalf		(3,092)		(1,014)
Principal paid on financing leases		(138)		(118)
Payment consideration to tax authority on employee's behalf						Payment consideration to tax authority on employee's behalf	(3,640)		(2,493)
Net cash (used in) financing activities	Net cash (used in) financing activities	(59,857)		(70,403)		Net cash (used in) financing activities	(32,062)		(11,926)
NET CHANGE IN CASH AND CASH EQUIVALENTS	NET CHANGE IN CASH AND CASH EQUIVALENTS	104,221		92,858		NET CHANGE IN CASH AND CASH EQUIVALENTS	(6,623)		23,681
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	41,193		8,854		CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	53,374		41,193
CASH AND CASH EQUIVALENTS, END OF PERIOD	CASH AND CASH EQUIVALENTS, END OF PERIOD	$	145,414	$	101,712	CASH AND CASH EQUIVALENTS, END OF PERIOD	$	46,751	$	64,874
SUPPLEMENTAL CASH FLOW INFORMATION	SUPPLEMENTAL CASH FLOW INFORMATION					SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	Cash paid for interest	$	1,008	$	1,568	Cash paid for interest	$	3,758	$	664
Cash paid for income taxes, net of refunds	Cash paid for income taxes, net of refunds	$	20,789	$	22,619	Cash paid for income taxes, net of refunds	$	22,348	$	12,864
Noncash investing and financing activities:	Noncash investing and financing activities:					Noncash investing and financing activities:
Operating lease obligations arising from obtaining right of use assets	Operating lease obligations arising from obtaining right of use assets	$	14,685	$	6,459	Operating lease obligations arising from obtaining right of use assets	$	17,041	$	9,496
Finance lease obligations arising from obtaining right of use assets	Finance lease obligations arising from obtaining right of use assets	$	141	$	107	Finance lease obligations arising from obtaining right of use assets	$	—	$	62
Noncash investing activities	Noncash investing activities	$	(319)	$	5,480	Noncash investing activities	$	(140)	$	(764)

See notes to condensed consolidated financial statements.

1.Description of the Business

ManTech International Corporation (depending on the circumstances, “ManTech” “Company” “we” “our” “ours” or “us”) provides mission-focused technology solutions and services for U.S. defense, intelligence community and federal civilian agencies. We excel in full-spectrum cyber, data collection & analytics, enterprise information technology (IT) and systems engineering and software application development solutions that support national and homeland security.

2.Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and note disclosures normally included in the annual financial statements, prepared in accordance with accounting principles generally accepted in the U.S., have been condensed or omitted pursuant to those rules and regulations. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. We recommend that you read these condensed consolidated financial statements in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, previously filed with the SEC. We believe that the condensed consolidated financial statements in this Form 10-Q reflect all adjustments that are necessary to fairly present the financial position, results of operations and cash flows for the interim periods presented. The results of operations for such interim periods are not necessarily indicative of the results that can be expected for the full year.

~~We classify indirect cost incurred~~

On May 13, 2022 the Company entered into an Agreement and Plan of Merger (the Merger Agreement) with Moose Bidco, Inc., a Delaware corporation (Parent), and Moose Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Parent (Merger Sub). Pursuant to the Merger Agreement, and in accordance with the terms and subject to the conditions thereof, Merger Sub will merge with and into the Company (the Merger), with the Company surviving the Merger as ~~cost~~a wholly owned subsidiary of ~~services and general and administrative expenses~~Parent. As a result of the Merger, the Company will be acquired by Parent, which will be controlled by investment funds managed by The Carlyle Group Inc.

ManTech’s Board of Directors has unanimously determined that the transactions contemplated by the Merger Agreement, including the Merger, are in the ~~same manner~~best interests of the Company and its stockholders, and approved the Merger Agreement and the transactions contemplated by the Merger Agreement. Our Board of Directors has also unanimously resolved to recommend that the Company’s stockholders vote to adopt the Merger Agreement and approve the Merger and other transactions contemplated thereby.

Under the Merger Agreement, in accordance with the terms and subject to the conditions set forth therein, at the effective time of the Merger, each issued and outstanding share of Class A Common Stock, par value $0.01 per share, of the Company and Class B Common Stock, par value $0.01 per share, of the Company will be automatically converted into the right to receive $96.00 in cash, without interest, other than (1) those shares owned by Parent, Merger Sub or the Company (as treasury stock or otherwise) or any of their respective wholly owned subsidiaries (which will be cancelled without any consideration) and (2) any shares as ~~such costs are~~to which appraisal rights have been properly exercised, and not withdrawn, in accordance with the Delaware General Corporation Law.

The consummation of the merger is subject to the satisfaction or waiver of customary closing conditions specified in the Merger Agreement, including, among others, (1) the adoption of the Merger Agreement by the Company’s stockholders, (2) the expiration or termination of any waiting period (and any extension thereof) applicable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act which expired June 20, 2022), (3) the absence of any law or order by a governmental authority that has the effect of preventing, making illegal or prohibiting the consummation of the Merger or any other transaction contemplated by the Merger Agreement and (4) the absence of a “Company Material Adverse Effect” (as defined in ~~our disclosure statements~~the Merger Agreement). The consummation of the Merger is not subject to a financing condition.

The Merger Agreement provides that the Company or Parent may terminate the Merger Agreement under ~~U.S. Government Cost Accounting Standards. Effective January 1, 2021, we updated our disclosure statements with the Defense Contract Management Agency, resulting~~certain conditions, and in certain ~~costs being classified differently either as cost~~specified circumstances, upon termination of ~~services~~the Merger Agreement, the Company will be required to pay Parent a termination fee of $115.9 million or ~~as general and administrative expenses on~~Parent will be required to pay the Company a ~~prospective basis. This change has caused a net increase in~~termination fee of $239.7

We expect the ~~reported cost~~Merger to close during the second half of ~~services and a net decrease in reported general and administrative expenses in 2021 as compared to 2020; however, total operating costs were not affected by this change.~~calendar year 2022.

3.4.Revenue from Contracts with Customers

We derive revenue from contracts with customers primarily from contracts with the U.S. government in the areas of defense, intelligence, homeland security and other federal civilian agencies. Substantially all of our revenue is derived from services and solutions provided to the U.S. government or to prime contractors supporting the U.S. government, including services by our employees and our subcontractors, and solutions that include third-party hardware and software that we purchase and integrate as a part of our overall solutions. Customer requirements may vary from period-to-period depending on specific contract and customer requirements. We provide our services and solutions under three types of contracts: cost-reimbursable, fixed-price and time-and-materials. Under cost-reimbursable contracts, we are reimbursed for costs that are determined to be reasonable, allowable and allocable to the contract and paid a fee representing the profit margin negotiated between us and the contracting agency, which may be fixed or performance based. Under fixed-price contracts, we perform specific tasks for a fixed price. Fixed-price contracts may include either a product delivery or specific service performance over a defined period. Under time-and-materials contracts, we are reimbursed for labor at fixed hourly rates and are generally reimbursed separately for allowable materials and expenses at cost.

For contracts that do not meet the criteria to measure performance as a right to invoice under the series guidance, we utilize an Estimate at Completion process to measure progress toward completion. We typically estimate progress towards completion based on cost incurred or direct labor incurred. As part of this process, we review information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenue and costs. The risks and opportunities include judgments about the ability and cost to achieve the contract milestones and other technical contract requirements. We make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation, execution by our subcontractors, the availability and timing of funding from our customer and overhead cost rates, among other variables. A significant change in one or more of these estimates could affect the timing in which we recognize revenue on our contracts. For the three months ended ~~September~~June 30, 2022, the aggregate impact of adjustments in contract estimates decreased our revenue by $1.5 million. For the three months ended June 30, 2021, ~~and 2020,~~ the aggregate impact of adjustments in contract estimates increased our revenue by ~~$3.7 million~~

~~and $4.3 million, respectively.~~$5.7 million. For ~~nine~~the six months ended ~~September~~June 30, 2022, the aggregate impact of adjustments in contract estimates decreased our revenue by $1.9 million. For the six months ended June 30, 2021, ~~and 2020,~~ the aggregate impact of adjustments in contract estimates increased our revenue by ~~$8.1 million and $9.4 million, respectively.~~$6.7 million.

We have 1 reportable segment. Our U.S. government customers typically exercise independent decision-making and contracting authority. Offices or divisions within an agency or department of the U.S. government may directly, or through a prime contractor, use our services as a separate customer as long as the customer has independent decision-making and contracting authority within its organization. We treat sales to U.S. government customers as sales within the U.S. regardless of where the services are performed. WeFor the three months ended and six months ended June 30, 2022 and 2021, we generated 100% ~~and 99%~~ of our revenue from sales in the U.S. for each of the three months ended September 30, 2021 and 2020, respectively. We generated 100% and 99% of our revenue from sales in the U.S. for each of the nine months ended September 30, 2021 and 2020, respectively.

The following tables disclose revenue (in thousands) by contract type, customer and contractor type for the periods presented.

Three months ended
September 30, Nine months ended
September 30,
2021 2020 2021 2020
U.S. Government $ 631,765 $ 624,888 $ 1,903,018 $ 1,848,043
State agencies, international agencies and commercial entities 6,056 11,308 16,605 31,557
Revenue $ 637,821 $ 636,196 $ 1,919,623 $ 1,879,600

The components of our receivables are as follows (in thousands):

Receivables at ~~September~~June 30, ~~2021~~2022 are expected to be substantially collected within one year except for approximately ~~$4.1~~$8.2 million, of which ~~a majority~~100% is related to U.S. government receivables. We do not believe that we have significant exposure to credit risk as billed receivables and unbilled receivables are primarily due from the U.S. government. The allowance for doubtful accounts represents our estimate for exposure due to compliance, contractual issues and bad debts related to prime contractors.

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, our contract liabilities ~~are $34.4~~were $34.6 million and ~~$37.2~~$36.2 million, respectively. Changes in the balance of contract liabilities are primarily due to the timing difference between our performance and our customers' payments. For the three months ended ~~September~~June 30, ~~2021, the amount of revenue that was included in the opening~~

~~contract liabilities balance was $1.2 million. For the nine months ended September 30, 2021,~~2022, the amount of revenue that was included in the opening contract liabilities balance was ~~$30.6~~$3.4 million. For the six months ended June 30, 2022, the amount of revenue that was included in the opening contract liabilities balance was $23.1 million.

The remaining performance obligation as of ~~September~~June 30, ~~2021~~2022 is ~~$2.2~~$2.3 billion. The following table discloses when we expect to recognize the remaining performance obligation as revenue (in billions):

Our operating leases are primarily made up of real estate. Our finance leases are primarily made up of transportation vehicles and equipment. There have been no material changes to our finance leases from the Form 10-K filed as of December 31, 2020.

~~The balance sheet information related to our operating leases was as follows (dollars in thousands):~~

September 30, 2021 December 31, 2020
Operating Leases
Operating lease right of use assets $ 79,266 $ 94,825
Operating lease obligations—current $ 31,291 $ 30,105
Operating lease obligations—long term $ 67,306 $ 80,242

~~The components of operating lease expense are as follows:~~

Three months ended
September 30, Nine months ended
September 30,
2021 2020 2021 2020
Operating lease expense $ 12,004 $ 8,465 $ 28,907 $ 25,548

~~Operating lease expense for the three and nine months ended September 30, 2021 includes $3.4 million of expense related to the abandonment of four facilities.~~


For the remaining six months ending December 31, 2022		For the year ending
For the remaining six months ending December 31, 2022		December 31, 2023		December 31, 2024		Thereafter
$	1.0	$	0.6	$	0.3	$	0.4

~~Tapestry Technologies (Tapestry)~~Technical and Management Assistance Corporation (TMAC)—On December ~~11, 2020,~~30, 2021, we completed the acquisition of ~~Tapestry~~TMAC through a share purchase agreement by and among ManTech International Corporation, ~~Tapestry Technologies, Inc.,~~Technical and Management Assistance Corporation, Project ~~Tribune Holdings, Inc. (Holdco),~~Cipher, Inc, and ~~all~~its Shareholder. TMAC is a leading provider of advanced data engineering services and solutions that ensure the ~~shareholders~~delivery of ~~the Holdco. Tapestry provides unique insight and cybersecurity solutions~~vital information to the U.S. Defense Information Systems Agency (DISA) and the Department of Defense (DoD). This acquisition broadens our footprint with DISA, serves as a springboard into the broader Defense Department IT marketspace, and provides us access to well-funded DISA and DoD programs.Intelligence Community.

The acquisition was accounted for as a business combination. The results of ~~Tapestry's~~TMAC's operations have been included in our ~~condensed~~ consolidated financial statements since that date. We funded the acquisition with cash on ~~hand and borrowing under our revolving credit facility.~~hand.

The purchase price ~~of $46.3~~was $30.3 million, ~~has been~~which includes the finalized working capital adjustment. The purchase price was preliminarily allocated to the underlying assets and liabilities based on their estimated fair value at the date of acquisition. The

excess of the purchase price over the fair value of assets acquired and liabilities assumed was recorded as goodwill. ~~The~~As we are still in the process of reviewing the fair value of the assets acquired and liabilities assumed, the purchase price allocation for ~~Tapestry~~TMAC is not complete as of ~~September~~June 30, ~~2021.~~2022. In accordance with ASC 805, Business Combinations, we expect to finalize our purchase price allocation within one year of the acquisition date.

Recognition of goodwill is largely attributed to the value paid for ~~Tapestry's~~TMAC's capabilities, which will broaden our footprint within ~~DISA and~~ the ~~Defense Department IT marketplace.~~U.S. Intelligence Community. The goodwill recorded for this transaction is valued at $15.0 million and will be deductible for tax

purposes over 15 years. The components of other intangible assets associated with the acquisition were customer relationships and backlog valued at ~~$15.1~~$15.0 million and ~~$1.4~~$0.7 million, respectively. The fair values of the customer relationships and backlog were determined using the excess earnings method (income approach) in which the value is derived from an estimation of the after-tax cash flows specifically attributable to backlog and customer relationships. Assumptions used in the analysis included revenue and expense forecasts, contributory asset charges, tax amortization benefit and discount rates. Customer contracts and related relationships represent the underlying relationships and agreements with ~~Tapestry's~~TMAC's existing customers. Customer relationships are amortized using the pattern of benefits method over their estimated useful lives of approximately 20 years. Backlog is amortized using the pattern of benefits method over its estimated useful life of ~~2 years.~~1 year. The weighted-average amortization period of other intangibles is 1819 years.

~~The following table represents the purchase price allocation for Tapestry (in thousands):~~


~~Cash and cash equivalents~~	$	36
~~Receivables~~	~~3,926~~
~~Prepaid expenses~~	~~225~~
~~Goodwill~~	~~27,013~~
~~Other intangible assets~~	~~16,500~~
~~Property and equipment~~	~~269~~
~~Operating lease right of use assets~~	~~934~~
~~Other assets~~	10
~~Accounts payable~~	~~(522)~~
~~Accrued salaries and related expenses~~	~~(1,142)~~
~~Operating lease obligations—current~~	~~(487)~~
~~Accrued expenses and other current liabilities~~	~~(59)~~
~~Operating lease obligations—long term~~	~~(453)~~
~~Net assets acquired and liabilities assumed~~	$	~~46,250~~

~~Minerva Engineering (Minerva)~~Gryphon Technologies, Inc. (Gryphon)—On ~~November~~December 9, ~~2020,~~2021, we completed the acquisition of ~~Minerva~~Gryphon through a ~~membership interest~~unit purchase agreement by and among ManTech International Corporation, ~~Minerva Engineering,~~Gryphon Parent, LLC and ~~NH Holdco~~Gryphon Finance, LLC. ~~Minerva is a leading provider~~Gryphon will further strengthen our long-term competitive position by adding differentiated digital and systems engineering capabilities across the Department of advanced cyber services that support the intelligence community, including risk and vulnerability assessment, incident response and cyber intrusion detection, and wireless signal discovery. This acquisition enhances and expands our cyber defense capabilities within the intelligence community, adding new customers, new past performance qualifications, mission-critical contracts, and highly skilled, cleared professionals that increase our deep cyber security talent base.Defense.

The acquisition was accounted for as a business combination. The results of ~~Minerva's~~Gryphon's operations have been included in our ~~condensed~~ consolidated financial statements since that date. We ~~paid for~~funded the acquisition with cash on ~~November 9, 2020~~hand and ~~a short-term promissory note that was paid on November 12, 2020.~~borrowing under our credit facilities.

The preliminary purchase price was $358.9 million, which includes ~~a finalized~~an estimated working capital ~~adjustment, was $32.7 million.~~adjustment. The preliminary purchase price ~~has been~~was preliminarily allocated to the underlying assets and liabilities based on their estimated fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired and liabilities assumed was recorded as goodwill. As we are still in the process of reviewing the fair value of the assets acquired and liabilities assumed, the purchase price allocation for ~~Minerva~~Gryphon is not complete as of ~~September~~June 30, ~~2021.~~2022. In accordance with ASC 805, Business Combinations, we expect to finalize our purchase price allocation within one year of the acquisition date.

Recognition of goodwill is largely attributed to the value paid for ~~Minerva's~~Gryphon's capabilities, which will broaden our footprint within the ~~intelligence community through the addition~~Department of ~~differentiated capabilities and access to new customers and contracts. The~~Defense. Pre-existing goodwill recorded for this transaction will be deductible for tax purposes over 1513 years. The remainder of goodwill attributable to the acquisition of Gryphon will not be deductible for tax purposes.

The components of other intangible assets associated with the acquisition were customer relationships and backlog valued at ~~$10.5~~$60.7 million and ~~$1.1~~$5.0 million, respectively. The fair values of the customer relationships and backlog were determined using the excess earnings method (income approach) in which the value is derived from an estimation of the after-tax cash flows specifically attributable to backlog and customer relationships. Assumptions used in the analysis included revenue and expense forecasts, contributory asset charges, tax amortization benefit and discount rates. Customer contracts and related relationships represent the underlying

relationships and agreements with ~~Minerva's~~Gryphon's existing customers. Customer relationships are amortized using the pattern of benefits method over their estimated useful lives of approximately 20 years. Backlog is amortized using the pattern of benefits method over its estimated useful life of 2 years. The weighted-average amortization period ~~for~~of other ~~intangible assets~~intangibles is 1819 years.

The following table represents the preliminary purchase price allocation for ~~Minerva~~Gryphon (in thousands):


Cash and cash equivalents	$	5620,184
Receivables	~~4,181~~58,554
Prepaid expenses	281,939
Taxes receivable - current	1,418
Other current assets	2,912
Goodwill	~~19,807~~257,928
Other intangible assets	~~11,600~~69,067
Property and equipment	~~149~~2,736
Operating lease right of use assets	~~968~~5,479
Other assets	29352
Accounts payable	~~(1,875)~~(12,471)
Accrued salaries and related expenses	~~(784)~~(20,411)
Contract liabilities	(4,773)
Operating lease obligations—current	~~(384)~~(1,243)
Accrued expenses and other current liabilities	~~(555)~~(5,153)
Deferred income taxes	(13,361)
Operating lease obligations—long term	~~(562)~~(4,287)
Net assets acquired and liabilities assumed	$	~~32,658~~358,870

For the three months ended June 30, 2022, we incurred no acquisition costs related to the Gryphon transactions. For the six months ended June 30, 2022, we incurred approximately $0.1 million of acquisition costs related to the Gryphon transaction, which are included in general and administrative expenses in our consolidated statement of income.

6.Earnings Per Share

Under ASC 260, Earnings per Share, the two-class method is an earnings allocation formula that determines earnings per share for each class of common stock according to dividends declared (or accumulated) and participation rights in undistributed earnings. Under that method, basic and diluted earnings per share data are presented for each class of common stock.

In applying the two-class method, we determined that undistributed earnings should be allocated equally on a per share basis between Class A and Class B common stock. Under our Certificate of Incorporation, the holders of the common stock are entitled to participate ratably, on a share-for-share basis as if all shares of common stock were of a single class, in such dividends as may be declared by the Board of Directors. During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we declared and paid quarterly dividends in the amounts of ~~$0.38~~$0.41 per share and ~~$0.32~~$0.38 per share, respectively, on both classes of common stock.

Basic earnings per share has been computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during each period. Shares issued during the period and shares reacquired during the period are weighted for the portion of the period in which the shares were outstanding. Diluted earnings per share have been computed in a manner consistent with that of basic earnings per share while giving effect to all potentially dilutive common shares that were outstanding during each period.

The net income available to common stockholders and weighted average number of common shares outstanding used to compute basic and diluted earnings per share for each class of common stock are as follows (in thousands, except per share amounts):

For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, options to purchase ~~24,926~~1,505 shares and ~~201,880~~428 shares, respectively, were outstanding but not included in the computation of diluted earnings per share because the options' effect would have been anti-dilutive. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, options to purchase ~~8,673~~11,235 shares and ~~221,845~~411 shares, respectively, were outstanding but not included in the computation of diluted earnings per share because the options' effect would have been anti-dilutive. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, there were ~~163,577~~99,286 shares and ~~127,467~~125,534 shares, respectively, issued from the exercise of stock options. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 there were ~~135,349~~139,082 shares and ~~54,433~~117,129 shares, respectively, issued from the vesting of restricted stock units.

7.Property and Equipment

Major classes of property and equipment are summarized as follows (in thousands):

Depreciation and amortization expense related to property and equipment for the three months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ was ~~$11.7~~$10.7 million and ~~$9.2~~$11.7 million, respectively. Depreciation and amortization expense related to property and equipment for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ was ~~$34.9~~$23.5 million and ~~$27.7~~$23.2 million, respectively.

8.Goodwill and Other Intangible Assets

The change in the carrying amount of goodwill during the year ended December 31, ~~2020~~2021 and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 are as follows (in thousands):

Other intangible assets consisted of the following (in thousands):

Amortization expense relating to intangible assets for the three months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ was ~~$6.9~~$8.3 million and ~~$8.2~~$6.3 million, respectively. Amortization expense relating to the intangible assets for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ was ~~$20.0~~$16.6 million and ~~$21.2~~$13.1 million, respectively. Amortization expense for the ~~nine~~six months ended ~~September~~June 30, 2021 includes an impairment of ~~$1.2~~$0.3 million for capitalized software. We estimate that we will have the following amortization expense for the future periods indicated below (in thousands):

On July 20, 2021, we amended and restated our credit agreement (Third Amended and Restated Credit Agreement) with a syndicate of lenders led by Bank of America, N.A., as sole administrative agent. The Third Amended and Restated Credit Agreement includes an aggregate principal amount of up to $1.1 billion made available through (i) a $500 million revolving credit facility with a $100 million letter of credit sublimit and a $50 million swing line loan sublimit and (ii) a $600 million delayed-draw term loan facility. Under the delayed-draw term loan facility, borrowings are available to be drawn prior to the first anniversary of the Third Amended and Restated Credit Agreement in up to three separate drawings in a minimal amount of $50 million. The Third Amended and Restated Credit Agreement also includes an accordion feature that permits us to arrange

with the lenders for the provision of additional commitments. The maturity date of the Third Amended and Restated Credit Agreement is July 20, 2026. We have deferred $3.7 million in debt issuance costs, including $3.3 million due to the Third Amended and Restated Credit Agreement, which are being amortized over the term of the new credit agreement.

Borrowings under the Third Amended and Restated Credit Agreement are collateralized by substantially all of our assets and those of our Material Subsidiaries and bear interest at one of the following variable rates as selected by us at the time of borrowing: a London Interbank Offer Rate base rate plus market-rate spreads (1.25% to 2.00% based on our consolidated total leverage ratio) or Bank of America's base rate plus market spreads (0.25% to 1.00% based on our consolidated total leverage ratio).

The terms of the Third Amended and Restated Credit Agreement permit prepayment and termination of the loan commitments at any time, subject to certain conditions. The Third Amended and Restated Credit Agreement requires us to comply with specified financial covenants, including the maintenance of certain leverage ratios and a consolidated coverage ratio. The Third Amended and Restated Credit Agreement also contains various covenants, including affirmative covenants with respect to certain reporting requirements and maintaining certain business activities, and negative covenants that, among other things, may limit or impose restrictions on our ability to incur liens, incur additional indebtedness, make investments, make acquisitions and undertake certain other actions. As of and during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we were in compliance with these covenants.

There was ~~no outstanding balance on our credit facilities at September 30, 2021. There was $15.0~~$300.0 million outstanding on our credit facilities at both June 30, 2022 and December 31, ~~2020.~~2021. The maximum available borrowing under the credit facilities at ~~September~~June 30, ~~2021~~2022 was ~~$1.1 billion.~~$797.0 million. As of ~~September~~June 30, ~~2021,~~2022, we were contingently liable under letters of credit totaling ~~$2.1~~$3.0 million, which reduces our availability to borrow under our credit facilities.

10.Commitments and Contingencies

Contracts with the U.S. government, including subcontracts, are subject to extensive legal and regulatory requirements and, from time-to-time, agencies of the U.S. government, in the ordinary course of business, investigate whether our operations are conducted in accordance with these requirements and the terms of the relevant contracts. U.S. government investigations of us, whether related to our U.S. government contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon us, or could lead to suspension or debarment from future U.S. government contracting activities. Management believes it has adequately reserved for any losses that may be experienced from any investigation of which it is aware. The Defense Contract Audit Agency has ~~substantially~~ completed a majority of our incurred cost audits through ~~2018~~2019 with no material adjustments. The remaining audits ~~for 2019~~ through ~~2020~~2021 are not expected to have a material effect on our financial position, results of operations or cash flow and management believes it has adequately reserved for any losses.

In the normal course of business, we are involved in certain governmental and legal proceedings, claims and disputes and have litigation pending under several suits. We believe that the ultimate resolution of these matters will not have a material effect on our financial position, results of operations or cash flows.

We have ~~$2.1~~$3.0 million outstanding on our letter of credit, of which $1.6 million is related to an outstanding performance bond in connection with a contract between ManTech MENA, LLC and Jadwalean International Operations and Management Company to fulfill technical support requirements for the Royal Saudi Air Force.

11.Stockholders' Equity and Stock-Based Compensation

On March 28, 2022, 11,580,000 shares of Class B common stock were converted to Class A common stock. On June 30, 2022, there were 39,380,498 shares of Class A common stock outstanding, 244,113 shares of Class A common stock as treasury stock, and 1,586,695 shares of Class B common stock outstanding.

Accounting for Stock-Based Compensation

Our 2016 Management Incentive Plan (the Plan) was designed to attract, retain and motivate key employees. The types of awards available under the Plan include, among others, stock options, restricted stock and restricted stock units (RSUs)~~, among others.~~. Equity awards granted under the Plan are settled in shares of Class A common stock. At the beginning of each year, the Plan provides that the number of shares available for issuance automatically increases by an amount equal to 1.5% of the total number of shares of Class A and Class B common stock outstanding on December 31st of the previous year. On January 2, ~~2021,~~2022, there were ~~607,066~~611,934 additional shares made available for issuance under the Plan. Through ~~September~~June 30, ~~2021,~~2022, the Board of Directors has

authorized the issuance of up to ~~16,358,071~~16,970,005 shares under this Plan. Through ~~September~~June 30, ~~2021,~~2022, the remaining aggregate number of shares of our common stock available for future grants under the Plan was ~~7,684,850.~~8,214,622. The Plan expires in March 2026.

The Plan is administered by the compensation committee of our Board of Directors, along with its delegates. Subject to the express provisions of the Plan, the committee has the Board of Directors’ authority to administer and interpret the Plan,

including the discretion to determine the exercise price, vesting schedule, contractual life and the number of shares to be issued.

Stock Compensation Expense—For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we recorded ~~$3.9~~$4.4 million and ~~$3.0~~$4.2 million, respectively, of stock-based compensation expense. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we recorded ~~$11.5~~$8.3 million and ~~$8.5~~$7.6 million, respectively, of stock-based compensation expense. No compensation expense of employees with stock awards, including stock-based compensation expense, was capitalized during the periods. For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we recorded ~~$0.4~~$0.1 million and ~~$0.2~~$0.5 million, respectively, to income tax benefit related to the exercise of stock options, vested cancellations and the vesting of restricted stock and restricted stock units. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we recorded ~~$1.9~~$1.0 million and ~~$1.0~~$1.5 million, respectively, to income tax benefit related to the exercise of stock options, vested cancellations and the vesting of restricted stock and restricted stock units.

Stock Options—Under the Plan, we have issued stock options in the past. A stock option gives the holder the right, but not the obligation to purchase a certain number of shares at a predetermined price for a specific period of time. We did not grant any options during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and year ended December 31, ~~2020.~~2021.

We have used the Black-Scholes-Merton option pricing model to determine the fair value of our awards on the date of grant. We will reconsider the use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated under this model. Option grants that vested during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 had a combined fair value of ~~$1.1~~$0.6 million and ~~$1.8~~$1.1 million, respectively.

The following table summarizes stock option activity for the year ended December 31, ~~2020~~2021 and the ~~nine~~six months ended ~~September~~June 30, ~~2021:~~2022:

The following table summarizes non-vested stock options for the ~~nine~~six months ended ~~September~~June 30, ~~2021:~~2022:

Unrecognized compensation expense related to non-vested awards was ~~$1.2~~$0.3 million as of ~~September~~June 30, ~~2021,~~2022, which is expected to be recognized over a weighted-average period of ~~1 year.~~0.3 years.

Restricted Stock—Under the Plan, we have issued restricted stock. A restricted stock award is an issuance of shares that cannot be sold or transferred by the recipient until the vesting period lapses. Restricted stock issued to members of our Board of Directors vest on the one year anniversary of the grant date. The related compensation expense is recognized over the service period and is based on the grant date fair value of the stock. The grant date fair value of the restricted stock is equal to

the closing market price of our common stock on the date of grant.

The following table summarizes the restricted stock activity during the year ended December 31, ~~2020~~2021 and the ~~nine~~six months ended ~~September~~June 30, ~~2021:~~2022:

RSUs—Under the Plan, we have issued restricted stock units (RSUs). RSUs are not actual shares, but rather a right to receive shares in the future. The shares are not issued and the employee cannot sell or transfer shares prior to vesting and have no voting rights until the RSUs vest. Employees who are granted RSUs do not receive dividend payments during the vesting period. Our employees' time-based RSUs generally provide for the delivery of shares in one-third increments on the first, second and third anniversaries of the date of grant. The grant date fair value of the RSUs is equal to the closing market price of our common stock on the grant date less the present value of dividends expected to be awarded during the service period. We recognize the grant date fair value of RSUs of shares we expect to issue as compensation expense ratably over the requisite service period.

The following table summarizes the non-vested RSU activity during the year ended December 31, ~~2020~~2021 and the ~~nine~~six months ended ~~September~~June 30, ~~2021:~~2022:

~~12.~~ ~~Subsequent Events~~

On October 29, 2021, the Company entered into a Unit Purchase Agreement by and among the Company, Gryphon Parent, LLC and Gryphon Finance, LLC to acquire Gryphon Technologies, Inc. in exchange for $350 million. We believe the acquisition of Gryphon Technologies, Inc. will further strengthen our long-term competitive position by adding differentiated digital and systems engineering capabilities across the Department of Defense. The transaction is subject to the Hart-Scott-Rodino Act and is expected to close within the fourth quarter of 2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

All statements and assumptions contained in this Quarterly Report on Form 10-Q that do not relate to historical facts constitute "forward-looking statements." These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include the use of words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan" and words and terms of similar substance in connection with discussions of future

events, situations or financial performance. While these statements represent our current expectations, no assurance can be given that the results or events described in such statements will be achieved.

Forward-looking statements may include, among other things, statements with respect to our financial condition, results of operations, prospects, business strategies, competitive position, growth opportunities, and plans and objectives of management. Such statements are subject to numerous assumptions, risks, uncertainties and other factors, many of which are outside of our control, and include, without limitations, the risks and uncertainties discussed in ~~the~~ Item 1A "Risk Factors" in Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021 and in Item 1A "Risk Factors" in Part II of this Form 10-Q.

Factors or risks that could cause our actual results to differ materially from the results we anticipate include, but are not limited to, the following:

•failure to maintain our relationship with the U.S. government, or the failure to ~~compete effectively for~~win new contract awards or to retain existing U.S. government contracts;

•adverse changes in U.S. government spending for programs we support, whether due to changing mission priorities, failure to pass fiscal year budget or enact stopgap spending measures through Continuing Resolutions, failure to increase or suspend U.S. debt ceiling, socio-economic policies or federal budget constraints generally;

•~~disruptions to our business or damage to our reputation resulting from cyber attacks and other security threats;~~

•disruptions to our business resulting from the COVID-19 pandemic or other similar global health epidemics, pandemics and/or other disease outbreaks, including the requirement for vaccination of our workforce;

•inability to recruit and retain a sufficient number of employees with specialized skill sets or necessary security clearances who are in great demand and limited supply;

•adverse changes in U.S. government spending for programs we support, whether due to changing mission priorities, socio-economic policies or federal budget constraints generally;

•disruptions to our business resulting from the COVID-19 pandemic or other similar global health epidemics, pandemics and/or other disease outbreaks;

•failure to compete effectively for awards procured through the competitive bidding process, and the adverse impact of delays resulting from our competitors' protests of new contracts that are awarded to us;

•disruptions to our business or damage to our reputation resulting from cyber attacks and other security threats;

•failure to obtain option awards, task orders or funding under our contracts;

•the government renegotiating, modifying or terminating our contracts;

•failure to comply with, or adverse changes in, complex U.S. government laws and procurement regulations;

•adverse results of U.S. government audits or other investigations of our government contracts;

•failure to successfully integrate acquired companies or businesses into our operations or to realize any accretive or synergistic effects from such acquisitions;

•failure to mitigate risks associated with conducting business internationally;

•adverse changes in business conditions that may cause our investments in recorded goodwill to become impaired;

•the conditions to the closing of the proposed Merger may not be satisfied or waived, and the proposed Merger may not be consummated within the expected time period or at all;

•our business may suffer as a result of uncertainty surrounding the Merger, and the proposed Merger may disrupt our current plans and operations or divert management’s attention from ongoing business operations;

•difficulties with our ability to retain and hire key personnel and maintain our business relationships as a result of the proposed Merger may occur;

•we have incurred and expect to continue to incur significant costs in connection with the Merger, some of which are payable by us regardless of whether the Merger is completed;

•the occurrence of certain events, changes or other circumstances could, under the terms of the Merger Agreement, give rise to termination of the Merger Agreement;

•stockholder litigation in connection with the Merger could affect the timing or occurrence of the Merger and could result in significant costs; and

•~~failure to mitigate risks associated with conducting business internationally.~~if the Merger is completed, stockholders will forego realization of any long-term value potential based on current strategy as an independent public company.

We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. We undertake no obligation to update any forward-looking statement made herein following the date of this Quarterly Report, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise.

We provide mission-focused technology solutions and services for U.S. defense, intelligence community and federal civilian agencies. We excel in full-spectrum cyber, secure mission & enterprise IT, advanced data analytics, software and systems development, intelligent systems engineering, intelligence mission support and mission operations.

Approximately 99% of our revenues are generated through contracts with the U.S. federal government, or through prime contractors supporting the U.S. government. The U.S. government is the largest consumer of services and solutions in the U.S. As such, our business is impacted by the overall U.S. government budget and our ability to match our capabilities and offerings to the U.S. government's spending priorities. For government fiscal year (GFY) 2022, the President's proposal contains $753 billion for defense and $769 billion for non-defense. Included within the proposal is $20 billion for unclassified cyber, representing 9% year-over-year growth and $97 billion for IT modernization, representing 4% year-over-year growth. On September 30, 2021, the President signed a Continuing Resolution (CR) that funds the U.S. government through December 3, 2021. We expect the U.S. government to be funded through additional CRs as the President's budget proposal is debated within Congress. Should Congress and the President fail to enact legislation funding the U.S. government through GFY 2022, or enact other stopgap spending measures, the U.S. government could experience periodic shutdowns.

On October 14, 2021, the President signed a temporary increase of the U.S. debt limit. The increased borrowing limit is expected to be exhausted in early December. If Congress fails to increase or further suspend the debt ceiling prior to exhausting

~~its monetary resources, the U.S. government could experience a shutdown or be unable to make payments which could have a material adverse effect on our liquidity and results of operations.~~

We are continuing to monitor impacts of the global outbreak of the COVID-19 pandemic including new variants of the ~~virus. With~~virus, specific impacts and mitigation protocols enacted in regions in which we operate, and the ~~rollout~~vaccination status of our employees. In preparation of the vaccine, previous measures adopted by local, state and federal governments to mitigate its impact have been, or are in the process of being, lifted. The removal of these mitigation protocols has allowed a majority of our previously impacted programs to return to normal operations. For programs that had been impacted, the Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted on March 27, 2020, included a provision (Section 3610) under which government contractors can seek reimbursement for employee's salaries when they are prevented from accessing worksites or are subject to reduced work schedules and cannot telecommute. These provisions were extended through September 30, 2021 when the President signed into law the American Rescue Plan (ARP) Act of 2021. The ARP Act was a $1.9 trillion stimulus package aimed at further combating the economic impacts of the COVID-19 pandemic. Amounts submitted for recovery under the CARES Act were insignificant during the third quarter.

~~On September 9, 2021, the President signed an~~President's Executive Order requiring all federal employees and contractors supporting the federal government be vaccinated (or to ~~be vaccinated. We are currently evaluating~~have an approved accommodation) as well as to promote the ~~vaccination status~~well-being of our workforce, ~~including~~we have and continue to encourage our employees to get vaccinated. There is currently an injunction suspending the President’s executive order requiring vaccination of our workforce. We cannot predict the potential ~~impacts~~impact of the ~~enforcement~~

vaccination mandate, if enforced, or the overall evolution of the ~~order will have~~pandemic and its further impacts on the economy or our ~~employees and our ability to meet deliverables promised in our contracts.~~business.

~~We classify indirect expenses either as cost~~The U.S. is currently experiencing the highest inflation in 40 years. In response to the increasing inflation rates, the Federal Reserve has begun, and is signaling the intent to continue through 2022, increasing interest rates. Increasing interest rates will increase the amounts of ~~services or general and administrative in manner consistent with disclosure statements submitted and approved by the Defense Contract Management Agency (DCMA). Effective for 2021,~~interest we have reclassified certain expenses from general and administrative to cost of sales (overhead). While this does not impact indirect expenses in total, it does reduce general and administrative as compared to prior periods.pay on our outstanding debt.

We recommend that you read this discussion and analysis in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, previously filed with the Securities and Exchange Commission.

On May 13, 2022 the Company entered into the Merger Agreement with Parent and Merger Sub. Pursuant to the Merger Agreement, and in accordance with the terms and subject to the conditions thereof, Merger Sub will merge with and into the Company, with the Company surviving the Merger as a wholly owned subsidiary of Parent. As a result of the Merger, the Company will be acquired by the Parent, which will be controlled by investment funds managed by The Carlyle Group Inc. The consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions specified in the Merger Agreement. Refer to Note 3, Proposed Merger, in the notes to the financial statements in this Form 10-Q.

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the Three Months Ended ~~September~~June 30, ~~2020~~2021

The following table sets forth certain items from our condensed consolidated statements of income and the relative percentage that certain items of expenses and earnings bear to revenue, as well as the period-to-period change from ~~September~~June 30, ~~2020~~2021 to ~~September~~June 30, ~~2021.~~2022.


		Three months ended September 30,								Period-to-Period Change					Three months ended June 30,								Period-to-Period Change
		2021		2020		2021		2020		2020 to 2021					2022		2021		2022		2021		2021 to 2022
		Dollars				Percentage				Dollars		Percentage			Dollars				Percentage				Dollars		Percentage
		(dollars in thousands)													(dollars in thousands)
REVENUE	REVENUE	$	637,821	$	636,196	100.0	%	100.0	%	$	1,625	0.3	%	REVENUE	$	669,352	$	648,578	100.0	%	100.0	%	$	20,774	3.2	%
Cost of services	Cost of services	536,205		538,000		84.1	%	84.6	%	(1,795)		(0.3)	%	Cost of services	573,373		552,868		85.7	%	85.2	%	20,505		3.7	%
General and administrative expenses	General and administrative expenses	48,343		58,855		7.5	%	9.2	%	(10,512)		(17.9)	%	General and administrative expenses	61,054		47,048		9.1	%	7.3	%	14,006		29.8	%
OPERATING INCOME	OPERATING INCOME	53,273		39,341		8.4	%	6.2	%	13,932		35.4	%	OPERATING INCOME	34,925		48,662		5.2	%	7.5	%	(13,737)		(28.2)	%
Interest expense	Interest expense	(606)		(310)		0.2	%	—	%	296		95.5	%	Interest expense	(2,033)		(366)		0.3	%	0.1	%	1,667		455.5	%
Interest income	Interest income	36		40		—	%	—	%	(4)		(10.0)	%	Interest income	46		39		—	%	—	%	7		17.9	%
Other (expense), net	Other (expense), net	(92)		(29)		—	%	—	%	63		217.2	%	Other (expense), net	(11)		(12)		—	%	—	%	(1)		(8.3)	%
INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS	INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS	52,611		39,042		8.2	%	6.2	%	13,569		34.8	%	INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS	32,927		48,323		4.9	%	7.4	%	(15,396)		(31.9)	%
Provision for income taxes	Provision for income taxes	(14,655)		(9,303)		2.2	%	1.5	%	5,352		57.5	%	Provision for income taxes	(10,090)		(11,714)		1.5	%	1.8	%	(1,624)		(13.9)	%
NET INCOME	NET INCOME	$	37,956	$	29,739	6.0	%	4.7	%	$	8,217	27.6	%	NET INCOME	$	22,837	$	36,609	3.4	%	5.6	%	$	(13,772)	(37.6)	%

The primary drivers of our increase in ~~revenues~~revenue relates to revenue from recent acquisitions, new contract awards and growth on certain existing contracts. ~~These increases were~~This increase was offset by contracts and tasks that ended and reduced scope of work on some ~~contracts.~~contracts, including contracts with variable material purchase requirements.

The ~~decrease~~increase in cost of services was primarily due to ~~lower amounts of direct labor and related fringe benefits partially offset by an increase~~increases in ~~overhead due to a change in the classification indirect cost allocations.~~revenue. As a percentage of revenue, direct labor costs were ~~48%~~50% and 49% for ~~both~~ the three months ended ~~September~~June 30, 2022 and 2021, ~~and 2020.~~respectively. As a percentage of ~~revenues,~~revenue, other direct costs, which include subcontractors and third party equipment and materials used in the performance of our contracts, ~~were~~was 35% and 36% for ~~both~~ the three months ended ~~September~~June 30, 2022 and 2021, ~~and 2020. With COVID mitigation protocols being reduced or lifted, direct labor has been impacted as employees have begun utilizing paid time off at a normalized level.~~respectively. Profitability ~~has increased~~is relatively flat due to ~~higher~~lower program profits ~~including improved award fees as compared to the prior period.~~and higher benefit costs.

General and administrative expenses

The ~~decrease~~increase in general and administrative expenses was primarily due to ~~changes~~additional legal and transaction fees incurred in relation to our Merger Agreement of $6.9 million as well as higher amortization expense associated with intangibles from our recent acquisitions. As a percentage of revenue, general and administrative expenses increased for the ~~classification~~three months ended June 30, 2022 as compared to the same period in 2021.

The increase in interest expense was due to interest on borrowing associated with the acquisitions of ~~certain indirect cost allocations of approximately $7.4 million,~~Gryphon and ~~collections on an international program that has ended. These reductions were partially offset by increased expenditures for investments in new capabilities.~~TMAC.

Provision for income taxes

Our effective tax rate is affected by recurring items, such as the relative amount of income we earn in various taxing jurisdictions and their tax rates. It is also affected by discrete items that may occur in any given year, but are not consistent from year-to-year. Our effective income tax rate was ~~28%~~31% and 24% for the three months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively. ~~For the three months ending September 30, 2021,~~The increase in the effective tax rate ~~increased~~is primarily due to ~~a decrease~~market fluctuations in the ~~market value of our~~executive deferred compensation plan, ~~increases in various state tax rates~~lower stock option exercises when compared to the previous period and ~~increased add back for executive compensation.~~limits on the deductibility of transaction fees incurred with our Merger Agreement.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 Compared to the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021

The primary drivers of our increase in revenues relates to revenue from recent acquisitions, new contract awards and growth on certain existing contracts. ~~These increases were~~This increase was offset by contracts and tasks that ended and reduced scope of work on some contracts, including contracts with variable material purchase requirements. We expect revenue to increase in the remainder of 2022 due to our recent acquisitions as well as new contracts and ~~lower material purchases as compared to the same period in 2020.~~growth on existing programs.

The increase in cost of services was primarily due to increases in ~~revenue and the reclassification of certain allocated indirect expenses.~~revenue. As a percentage of revenue, direct labor ~~and associated indirect~~ costs were ~~50% and 48%~~51% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020, respectively.~~2021. As a percentage of ~~revenues,~~revenue, other direct costs, which include subcontractors and third party equipment and materials used in the performance of our contracts, ~~were~~was 35% ~~and 37%~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and 2020, respectively. The shift in our mix between direct labor and other direct costs was primarily due an increase in overhead due to cost allocation reclassifications which were partially offset by reduced fringe benefit costs, and lower material purchases on several contracts due to timing of customer requirements as well as reduced other direct costs. Profitability has increased due to higher program profits including improved award fees as compared to the prior period.2021. We expect cost of services as a percentage of revenue to ~~increase in 2021 due to expectations~~decrease slightly for the remainder of ~~increasing material procurements.~~2022.

General and administrative expenses

The ~~decrease~~increase in general and administrative expenses was primarily due additional legal and transaction fees incurred in relation to ~~changes in the classification~~our Merger Agreement of ~~certain indirect cost allocations~~$7.3 million as well as higher amortization expense associated with intangibles from our recent acquisitions. As a percentage of approximately $22.3 million and collections on an international program that has ended. These reductions were partially offset by increased bid and proposal spending and investments in new capabilities through research and development expenditures. For the remainder of 2021, we expectrevenue, general and administrative expenses increase for the six months ended June 30, 2022 as compared to ~~increase as a percentage~~the same period in 2021. Whether successful or not, we expect to incur additional expense in relation to the proposed Merger. We expect the merger to be completed in the second half of ~~revenue.~~2022.

The increase in interest expense was due to interest on borrowing associated with the acquisitions of Gryphon and TMAC. We expect interest expense may increase in the short term as interest rates rise, but to decrease later in 2022 as we expect to reduce our outstanding loan balances.

Provision for income taxes

Our effective tax rate is affected by recurring items, such as the relative amount of income we earn in various taxing jurisdictions and their tax rates. It is also affected by discrete items that may occur in any given year, but are not consistent from year-to-year. Our effective income tax rate was ~~25%~~27% and 24% for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The increase ~~is primarily due to an increase in various state rates as well as an increase~~ in the ~~add back for executive compensation. Under the current tax laws, we expect our~~ effective tax rate ~~to slightly increase in 2021. The President has signaled the administration's intent to increase the U.S. corporate income tax rate. An increase~~is market fluctuations in the ~~U.S. corporate rate could result in a significant increase in~~executive deferred compensation plan, lower stock option exercises when compared to the previous period and limits on the deductibility of transaction fees incurred with our ~~income tax expense as we would be required to revalue our deferred tax liabilities.~~Merger Agreement.

Backlog

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, our backlog was ~~$10.1~~$10.4 billion and ~~$10.2~~$10.6 billion, respectively. Our funded backlog was ~~$1.3~~$1.7 billion and ~~$1.2~~$1.6 billion as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Backlog represents estimates that we calculate on a consistent basis. For additional information on how we compute backlog, see the disclosure under the caption "Backlog," contained in "Item 11. Business" of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021.

Liquidity and Capital Resources

~~Historically, our primary liquidity needs have been financing acquisitions, working capital, payments under our cash dividend program and capital expenditures.~~ Our primary sources of liquidity are cash ~~from operating activities~~provided by operations and ~~borrowings under~~ our ~~revolving~~ credit ~~facility.~~

facilities. On ~~September~~June 30, ~~2021,~~2022, our cash and cash equivalents balance was ~~$145.4~~$46.8 million. There was no$300.0 million outstanding ~~balance~~ under our credit facilities at ~~September~~June 30, ~~2021.~~2022. As of ~~September~~June 30, ~~2021,~~2022, we were contingently liable under letters of credit totaling ~~$2.1~~$3.0 million, which reduces our availability to borrow under our credit facilities. The maximum available borrowings under our credit facilities at ~~September~~June 30, ~~2021~~2022 were ~~$1.1 billion.~~$797.0 million. These sources of liquidity have met the short-term and long-term liquidity needs for financing of acquisitions, working capital, payment under our cash dividend program and capital expenditures.

Cash provided by operating activities has been adequate to fund our operations, including payments under our regular cash dividend program. When there are short-term fluctuations in our cash flows and level of operations, we may from time-to-time increase borrowings under our credit facilities to meet cash demands.

Cash Flows From (Used In) Operating Activities

Our operating cash flow is primarily affected by our ability to invoice and collect from our customers in a timely manner, our ~~management of~~ability to manage our vendor payments and the overall profitability of our contracts. We bill most of our customers monthly after services are rendered. Our accounts receivable days sales outstanding were 5569 and 5464 for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively. ~~For the nine months ended September 30, 2021 and 2020, our~~Our net cash flow from operating activities was ~~$205.1~~$43.9 million and ~~$217.1~~$66.5 million for the six months ended June 30, 2022 and June 30, 2021, respectively. The decrease in net cash ~~flows~~flow from operating activities over the

comparative period was primarily related to ~~accrued salaries and~~the timing of payments to vendors, an increase in estimated tax payments related ~~expenses due~~ to the capitalization of Section 174 expenses, and a decrease in net income, offset by the timing of customer collections. Beginning in 2022, the Tax Cuts and Jobs Act of 2017 requires expenses that meet the definition under ~~utilization~~Section 174 of ~~paid time off~~the Internal Revenue Code to be deferred over 5 years. Absent a repeal of this provision in the ~~prior comparative period.~~tax code, we expect amounts paid for income taxes to be increased by approximately $20 million in 2022.

Cash Flows From (Used In) Investing Activities

Our cash used in investing activities consists primarily of business combinations, purchases of property and equipment and investments in capital software. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 our net cash used in investing activities was ~~$41.0~~$18.4 million, which was primarily due to the purchase of equipment to support managed IT service contracts. For the nine months ended September 30, 2020 our net cash used in investing activities was $53.9 million, which was primarily due to the purchase of equipment to support managed IT service contracts and infrastructure ~~investments and capitalized software,~~investment, partially offset by proceeds from our corporate owned life ~~insurance and sales~~insurance. For the six months ended June 30, 2021 our net cash used in investing activities was $30.9 million, which was due to the purchase of ~~property and equipment.~~equipment to support managed IT service contracts.

Cash Flows From (Used in) Financing Activities

For the ~~nine~~six months ended ~~September~~June 30, 2022, our net cash used in financing activities was $32.1 million, which was primarily due to dividends paid. For the six months ended June 30, 2021, our net cash used in financing activities was ~~$59.9~~$11.9 million, which was primarily the result of ~~net payments under~~ our credit facilities and dividend payments. For the nine months ended September 30, 2020, our net cash used in financing activities was $70.4 million, which was primarily due to net repayments of our revolving credit facility and dividend payments, offset by ~~proceeds from the exercise of stock options.~~net borrowings under our credit facility.

Credit Facilities

On July 20, 2021, we amended and restated our credit agreement ~~(Third Amended and Restated Credit Agreement)~~ with a

syndicate of lenders led by Bank of America, N.A., as sole administrative agent. The Third Amended and Restated Credit Agreement includes an aggregate principal amount of up to $1.1 billion made available through (i) a $500 million revolving credit facility with a $100 million letter of credit sublimit and a $50 million swing line loan sublimit and (ii) a $600 million delayed-draw term loan facility. Under the delayed-draw term loan facility, borrowings are available to be drawn prior to the first anniversary of the Third Amended and Restated Credit Agreement in up to three separate drawings in a minimal amount of $50 million. The Third Amended and Restated Credit Agreement also includes an accordion feature that permits us to arrange with the lenders for the provision of additional commitments. The maturity date of the Third Amended and Restated Credit Agreement is July 20, 2026. We have deferred $3.7 million in debt issuance costs, including $3.3 million due to the Third Amended and Restated Credit Agreement, which are being amortized over the term of the new credit agreement.

There was no$300.0 million outstanding ~~balance~~ on our credit facilities at ~~September~~June 30, ~~2021.~~2022. As of and during the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we were in compliance with the covenants under the Third Amended and Restated Credit Agreement.

Capital Resources

We believe the capital resources available to us from cash on hand, our capacity under our credit facilities, and cash from our operations are adequate to fund our anticipated cash requirements for at least the next year. We anticipate financing our internal and external growth through cash from operating activities, borrowings under our credit facilities and issuance of equity.

Cash Management

To the extent possible, we invest our available cash in short-term, investment grade securities in accordance with our investment policy. Under our investment policy, we manage our investments in accordance with the priorities of maintaining the safety of our principal, maintaining the liquidity of our investments, maximizing the yield on our investments and investing our cash to the fullest extent possible. Our investment policy provides that no investment security can have a final maturity that exceeds six months and that the weighted average maturity of the portfolio cannot exceed 60 days. Cash and cash equivalents include cash on hand, amounts due from banks and short-term investments with maturity dates of three months or less at the date of purchase.

Dividend

During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we declared and paid a quarterly dividend in the amount of ~~$0.38~~$0.41 per share and ~~$0.32~~$0.38 per share, respectively, on both classes of our common stock. ~~While we expect to continue the cash~~We will not be declaring a dividend program, any future dividends declared will be at the discretion of our Board of Directors and will depend, among other factors, upon our results of operations, financial condition and cash requirements, as well as such other factors that our Board of Directors deems relevant.

~~Off-Balance Sheet Arrangements~~

In the ordinary course of business, we use letters of credit issued to satisfy certain contractual terms with our customers. As of September 30, 2021, $2.1 million in letters of credit were issued but undrawn. We have an outstanding performance bond in connection with a contract between ManTech MENA, LLC and Jadwalean International Operations and Management Company to fulfill technical support requirements for the Royal Saudi Air Force. This performance bond is guaranteed by a letter of credit in the ~~amount of $1.6 million.~~third quarter.

Critical Accounting Estimates ~~and Policies~~

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. Application of these policies is particularly important to the portrayal of our financial condition and results of operations. The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). The preparation of these condensed

consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results may differ from these estimates under different assumptions or conditions. Our ~~significant~~critical accounting ~~policies~~estimates are set forth under the caption "Critical Accounting ~~Estimates and Policies"~~Estimates" in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020,~~2021, previously filed with the SEC. There have been no material changes to our critical accounting estimates ~~and policies~~ from those discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2020.~~2021.

Recently Adopted Accounting Standards Updates

Accounting Standards Updates that became effective during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 did not have a material impact on our condensed consolidated financial statements.

Recently Issued But Not Yet Adopted ASUs

ASUs effective after ~~September~~June 30, ~~2021~~2022 are not expected to have a material effect on our condensed consolidated financial statements.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

Our exposure to market risk relates to changes in interest rates for borrowing under our credit facilities. At ~~September~~June 30, ~~2021,~~2022, we had no$300.0 million outstanding ~~balance~~ on our credit facilities. Borrowings under our credit facilities bear interest at variable rates. A hypothetical 10% increase in interest rates would have ~~an immaterial~~a $0.6 million effect on our interest expense for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

We do not use derivative financial instruments for speculative or trading purposes. When we have excess cash, we invest in short-term, investment grade, interest-bearing securities. Our investments are made in accordance with an investment policy. Under this policy, no investment securities can have maturities exceeding six months and the weighted average maturity of the portfolio cannot exceed 60 days.

Item 4.Controls and Procedures

Management is responsible for establishing and maintaining adequate disclosure controls and procedures and internal control over financial reporting. Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Quarterly Report on Form 10-Q, is accurately recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

It should be noted that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. As a result, our disclosure controls and procedures are designed to provide reasonable assurance that such disclosure controls and procedures will meet their objectives.

As of ~~September~~June 30, ~~2021,~~2022, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), management evaluated the effectiveness of

the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level described above.

There were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.Legal Proceedings

We are subject to certain legal proceedings, government audits, investigations, claims and disputes that arise in the ordinary course of our business. Like most large government defense contractors, our contract costs are audited and reviewed on a continual basis by an in-house staff of auditors from the Defense Contract Audit Agency. In addition to these routine audits, we are subject from time-to-time to audits and investigations by other agencies of the U.S. government. These audits and investigations are conducted to determine if our performance and administration of our government contracts are compliant with contractual requirements and applicable federal statutes and regulations. An audit or investigation may result in a finding that our performance, systems and administration are compliant or, alternatively, may result in the government initiating proceedings against us or our employees, including administrative proceedings seeking repayment of monies, suspension and/or debarment from doing business with the U.S. government or a particular agency or civil or criminal proceedings seeking penalties and/or fines. Audits and investigations conducted by the U.S. government frequently span several years.

Although we cannot predict the outcome of these and other legal proceedings, investigations, claims and disputes, based on the information now available to us, we do not believe the ultimate resolution of these matters, either individually or in the aggregate, will have a material adverse effect on our business, prospects, financial condition or operating results.

Item 1A. Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Item 1A “Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. There have been no material changes to our risk factors from those set forth in our Annual Report on Form 10-K the fiscal year ended December 31, 2021, except as follows:

Risks Related to the Proposed Merger

Failure to complete the proposed Merger or a delay in completion of the Merger could negatively impact the price of our common stock, as well as our future business and financial results.

On May 13, 2022, we entered into the Merger Agreement, pursuant to which we will be acquired by Parent, which will be controlled by investment funds managed by The Carlyle Group, as described in Note 3, Proposed Merger, in the notes to the financial statements in this Form 10-Q. The consummation of the Merger is subject to the satisfaction or waiver of closing conditions specified in the Merger Agreement, including, among others, (1) the adoption of the Merger Agreement by the Company’s stockholders, (2) the expiration or termination of any waiting period (and any extension thereof) under the HSR Act (which expired on June 20, 2022), (3) the absence of any law or order by a governmental authority that has the effect of preventing, making illegal or prohibiting the consummation of the Merger or any other transaction contemplated by the Merger Agreement and (4) the absence of a “Company Material Adverse Effect” (as defined in the Merger Agreement). We cannot assure you that all of the closing conditions specified in the Merger Agreement will be satisfied or waived on a timely basis. If the conditions to the Merger are not satisfied or waived on a timely basis, we may be unable to complete the Merger as quickly as expected or at all.

If the Merger is not completed, our ongoing business may be adversely affected as follows:

•we may experience negative reactions from the financial markets, including negative impacts on the market price of our common stock;

•some of management's attention will have been directed to the Merger instead of being directed to our day-to-day operations and the pursuit of other opportunities that could have been beneficial to us;

•the manner in which our business partners and other third parties perceive us may be negatively impacted, which in turn could affect our ability to compete for business;

•we may experience negative reactions from our employees;

•we could be subject to litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement;

•we will be required to pay our costs relating to the Merger, whether or not the Merger is completed; and

•we may be required, in certain circumstances, to pay a termination fee of $115.9 million, as provided in the Merger Agreement.

In addition, any significant delay in consummating the Merger could have an adverse effect on our operating results, could adversely affect our relationships with our business partners and would likely lead to a significant diversion of management and employee attention.

Additionally, in approving the Merger Agreement, the Board of Directors considered a number of factors and potential benefits, including the fact that the merger consideration to be received by holders of the Company’s common stock represented a significant premium to the recent market price. If the Merger is not completed, neither the Company nor the holders of our common stock will realize this benefit of the Merger. Moreover, we would also have nevertheless incurred substantial transaction-related costs and the loss of management time and resources.

Uncertainties associated with the Merger may cause a loss of management and other key employees and disrupt our business relationships, which could adversely affect our business.

Uncertainty about the effect of the Merger on our employees and business relationships may have an adverse effect on our business. These uncertainties may impair our ability to attract, retain and motivate key personnel until the Merger is completed and for a period of time thereafter. Employee retention may be particularly challenging during the pendency of the Merger. If key employees depart and as we face additional uncertainties relating to the Merger, our business relationships may be subject to disruption. If key employees depart or if our existing business relationships suffer, our results of operations may be adversely affected. The adverse effects of such disruptions could be further exacerbated by any delay in the completion of the Merger.

We will incur significant costs in connection with the Merger.

We have incurred and expect to continue to incur significant costs in connection with the Merger. These costs include fees paid to financial, legal and accounting advisors, filings fees, printing expenses and other related costs. Some of these costs are payable by us regardless of whether the Merger is completed. If the Merger is not consummated, we may under certain circumstances be required to pay to Parent a termination fee of $115.9 million.

The Merger Agreement limits our ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire us for greater consideration than what is specified in the Merger Agreement.

The Merger Agreement contains provisions that make it more difficult for us to sell our business to a company other than Parent. These provisions include restrictions on the Company’s solicitation of alternative acquisition proposals from third parties. Under the Merger Agreement, the Company is required to pay a termination fee equal to $115.9 million if the Merger Agreement is terminated under certain circumstances (including to accept a “Superior Acquisition Proposal” as defined in the Merger Agreement), which could deter other potential bidders from making an acquisition proposal for the Company prior to the consummation of the Merger and could impact the Company’s ability to engage in another transaction for up to twelve months if the Merger Agreement is terminated in certain circumstances.

We may be the target of lawsuits related to the Merger which could result in substantial costs and may delay or prevent the Merger from being completed.

Shareholder lawsuits are often brought against public companies that have entered into merger agreements. Even if these lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. Lawsuits filed in connection with the Merger against the Company and/or its directors and officers could prevent or delay the consummation of the Merger and result in additional costs to us. The ultimate resolution of any lawsuits cannot be predicted, and an adverse ruling in any such lawsuit may cause the Merger to be delayed or not to be completed, which could cause us not to realize some or all of the anticipated benefits of the Merger. We cannot currently predict the outcome of any lawsuits or claims.

Item 6.Exhibits

Exhibits required by Item 601 of Regulation S-K:


Exhibit						Description of Exhibit
2.1						Agreement and Plan of Merger, dated as of May 13, 2022, by and among Moose Bidco, Inc., Moose Merger Sub, Inc. and ManTech International Corporation (incorporated herein by reference from registrants Current Report on Form 8-K, as filed with the SEC on May 16, 2022)
10.1 *						Form of Amendment to Executive Continuity and Stay Incentive Agreement (incorporated by reference from registrant's Current Report on Form 8-K, as filed with the SEC on May 17, 2022.
31.1‡						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
31.2‡						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended.
32‡						Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended.
101.INS						Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*Management contract or compensatory plan or arrangement required to be filed as an Exhibit to this report pursuant to Item 15(a)(3).
‡ Filed herewith.

2527

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		MANTECH INTERNATIONAL CORPORATION

		By:	/s/ KEVIN M. PHILLIPS
Date:	~~November~~August 3, ~~2021~~2022	Name:	Kevin M. Phillips
		Title:	Chairman, Chief Executive Officer and President


		By:	/s/ JUDITH L. BJORNAAS
Date:	~~November~~August 3, ~~2021~~2022	Name:	Judith L. Bjornaas
		Title:	Chief Financial Officer

2628


Delaware			22-1852179
State or Other Jurisdiction of Incorporation or Organization			I.R.S. Employer Identification No.

2251 Corporate Park Drive	Herndon	VA	20171
Address of Principal Executive Offices			Zip Code


		(unaudited)					(unaudited)
		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	145,414	$	41,193	Cash and cash equivalents	$	46,751	$	53,374
Receivables—net	Receivables—net	389,403		400,621		Receivables—net	511,481		476,035
Prepaid expenses	Prepaid expenses	30,752		26,243		Prepaid expenses	41,975		32,600
Taxes receivable—current	Taxes receivable—current	17,838		21,968		Taxes receivable—current	19,975		22,140
Other current assets	Other current assets	8,339		6,354		Other current assets	8,779		13,372
Total Current Assets	Total Current Assets	591,746		496,379		Total Current Assets	628,961		597,521
Goodwill	Goodwill	1,238,090		1,237,894		Goodwill	1,511,068		1,498,988
Other intangible assets—net	Other intangible assets—net	182,234		202,231		Other intangible assets—net	244,338		265,555
Property and equipment—net	Property and equipment—net	127,042		121,296		Property and equipment—net	132,978		133,297
Operating lease right of use assets	Operating lease right of use assets	79,266		94,825		Operating lease right of use assets	74,233		75,319
Employee supplemental savings plan assets	Employee supplemental savings plan assets	40,996		37,848		Employee supplemental savings plan assets	30,792		43,342
Investments	Investments	11,555		11,549		Investments	11,555		11,555
Other assets	Other assets	13,232		11,642		Other assets	14,647		13,988
TOTAL ASSETS	TOTAL ASSETS	$	2,284,161	$	2,213,664	TOTAL ASSETS	$	2,648,572	$	2,639,565
LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY					LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES	LIABILITIES					LIABILITIES
Accounts payable	Accounts payable	$	164,387	$	142,360	Accounts payable	$	162,193	$	169,140
Accrued salaries and related expenses	Accrued salaries and related expenses	121,767		123,953		Accrued salaries and related expenses	130,562		129,685
Contract liabilities	Contract liabilities	34,442		37,218		Contract liabilities	34,638		36,197
Operating lease obligations—current	Operating lease obligations—current	31,291		30,105		Operating lease obligations—current	31,007		32,557
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	8,924		15,177		Accrued expenses and other current liabilities	13,108		9,649
Total Current Liabilities	Total Current Liabilities	360,811		348,813		Total Current Liabilities	371,508		377,228
Long-term debt						Long-term debt	300,000		300,000
Deferred income taxes	Deferred income taxes	152,586		141,638		Deferred income taxes	168,350		174,060
Operating lease obligations—long term	Operating lease obligations—long term	67,306		80,242		Operating lease obligations—long term	63,433		63,575
Accrued retirement	Accrued retirement	34,841		36,310		Accrued retirement	25,876		36,053
Long-term debt		—		15,000
Other long-term liabilities	Other long-term liabilities	12,215		12,249		Other long-term liabilities	13,520		13,229
TOTAL LIABILITIES	TOTAL LIABILITIES	627,759		634,252		TOTAL LIABILITIES	942,687		964,145
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES	0		0		COMMITMENTS AND CONTINGENCIES	0		0
STOCKHOLDERS' EQUITY	STOCKHOLDERS' EQUITY					STOCKHOLDERS' EQUITY
Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 27,803,379 and 27,538,474 shares issued at September 30, 2021 and December 31, 2020; 27,559,266 and 27,294,361 shares outstanding at September 30, 2021 and December 31, 2020		278		275
Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 13,176,695 and 13,176,695 shares issued and outstanding at September 30, 2021 and December 31, 2020		132		132
Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 39,624,611 and 27,863,041 shares issued at June 30, 2022 and December 31, 2021; 39,380,498 and 27,618,928 shares outstanding at June 30, 2022 and December 31, 2021						Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 39,624,611 and 27,863,041 shares issued at June 30, 2022 and December 31, 2021; 39,380,498 and 27,618,928 shares outstanding at June 30, 2022 and December 31, 2021	396		279
Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 1,586,695 and 13,176,695 shares issued and outstanding at June 30, 2022 and December 31, 2021						Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 1,586,695 and 13,176,695 shares issued and outstanding at June 30, 2022 and December 31, 2021	16		132
Additional paid-in capital	Additional paid-in capital	562,159		545,717		Additional paid-in capital	576,430		566,573
Treasury stock, 244,113 and 244,113 shares at cost at September 30, 2021 and December 31, 2020		(9,158)		(9,158)
Treasury stock, 244,113 and 244,113 shares at cost at June 30, 2022 and December 31, 2021						Treasury stock, 244,113 and 244,113 shares at cost at June 30, 2022 and December 31, 2021	(9,158)		(9,158)
Retained earnings	Retained earnings	1,103,243		1,042,676		Retained earnings	1,138,499		1,117,867
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(252)		(230)		Accumulated other comprehensive loss	(298)		(273)
TOTAL STOCKHOLDERS' EQUITY	TOTAL STOCKHOLDERS' EQUITY	1,656,402		1,579,412		TOTAL STOCKHOLDERS' EQUITY	1,705,885		1,675,420
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,284,161	$	2,213,664	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,648,572	$	2,639,565


		(unaudited) Three months ended September 30,				(unaudited) Nine months ended September 30,					(unaudited) Three months ended June 30,				(unaudited) Six months ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
NET INCOME	NET INCOME	$	37,956	$	29,739	$	106,893	$	88,366	NET INCOME	$	22,837	$	36,609	$	54,178	$	68,937
OTHER COMPREHENSIVE LOSS:	OTHER COMPREHENSIVE LOSS:									OTHER COMPREHENSIVE LOSS:
Translation adjustments, net of tax	Translation adjustments, net of tax	(3)		(19)		(22)		(44)		Translation adjustments, net of tax	(13)		(7)		(25)		(19)
Total other comprehensive loss	Total other comprehensive loss	(3)		(19)		(22)		(44)		Total other comprehensive loss	(13)		(7)		(25)		(19)
COMPREHENSIVE INCOME	COMPREHENSIVE INCOME	$	37,953	$	29,720	$	106,871	$	88,322	COMPREHENSIVE INCOME	$	22,824	$	36,602	$	54,153	$	68,918


		(unaudited) Three months ended September 30,				(unaudited) Nine months ended September 30,					(unaudited) Three months ended June 30,				(unaudited) Six months ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Common Stock, Class A	Common Stock, Class A									Common Stock, Class A
At beginning of period	At beginning of period	$	278	$	274	$	275	$	272	At beginning of period	$	396	$	277	$	279	$	275
Conversion Class B to Class A common stock										Conversion Class B to Class A common stock	—		—		116		—
Stock-based compensation expense										Stock-based compensation expense	—		—		1		1
Stock option exercises	Stock option exercises	—		—		2		1		Stock option exercises	—		1		—		2
Stock-based compensation expense		—		—		1		1
At end of period	At end of period	278		274		278		274		At end of period	396		278		396		278
Common Stock, Class B	Common Stock, Class B									Common Stock, Class B
At beginning of period	At beginning of period	132		132		132		132		At beginning of period	16		132		132		132
Conversion Class B to Class A common stock										Conversion Class B to Class A common stock	—		—		(116)		—
At end of period	At end of period	132		132		132		132		At end of period	16		132		16		132
Additional Paid-In Capital	Additional Paid-In Capital									Additional Paid-In Capital
At beginning of period	At beginning of period	557,211		535,464		545,717		525,851		At beginning of period	570,871		549,811		566,573		545,717
Stock-based compensation expense	Stock-based compensation expense	3,960		3,023		11,515		8,532		Stock-based compensation expense	4,428		4,113		8,345		7,555
Stock option exercises	Stock option exercises	1,587		1,036		8,019		5,917		Stock option exercises	1,142		3,291		5,152		6,432
Payment consideration to tax authority on employees' behalf	Payment consideration to tax authority on employees' behalf	(599)		(237)		(3,092)		(1,014)		Payment consideration to tax authority on employees' behalf	(11)		(4)		(3,640)		(2,493)
At end of period	At end of period	562,159		539,286		562,159		539,286		At end of period	576,430		557,211		576,430		557,211
Treasury Stock, at cost	Treasury Stock, at cost									Treasury Stock, at cost
At beginning of period	At beginning of period	(9,158)		(9,158)		(9,158)		(9,158)		At beginning of period	(9,158)		(9,158)		(9,158)		(9,158)
At end of period	At end of period	(9,158)		(9,158)		(9,158)		(9,158)		At end of period	(9,158)		(9,158)		(9,158)		(9,158)
Retained Earnings	Retained Earnings									Retained Earnings
At beginning of period	At beginning of period	1,080,762		1,006,624		1,042,676		973,767		At beginning of period	1,132,457		1,059,608		1,117,867		1,042,676
Net income	Net income	37,956		29,739		106,893		88,366		Net income	22,837		36,609		54,178		68,937
Dividends	Dividends	(15,475)		(12,915)		(46,326)		(38,685)		Dividends	(16,795)		(15,455)		(33,546)		(30,851)
At end of period	At end of period	1,103,243		1,023,448		1,103,243		1,023,448		At end of period	1,138,499		1,080,762		1,138,499		1,080,762
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss									Accumulated Other Comprehensive Loss
At beginning of period	At beginning of period	(249)		(247)		(230)		(222)		At beginning of period	(285)		(242)		(273)		(230)
Translation adjustments, net of tax	Translation adjustments, net of tax	(3)		(19)		(22)		(44)		Translation adjustments, net of tax	(13)		(7)		(25)		(19)
At end of period	At end of period	(252)		(266)		(252)		(266)		At end of period	(298)		(249)		(298)		(249)
Total Stockholders' Equity	Total Stockholders' Equity	$	1,656,402	$	1,553,716	$	1,656,402	$	1,553,716	Total Stockholders' Equity	$	1,705,885	$	1,628,976	$	1,705,885	$	1,628,976


		Three months ended September 30,				Nine months ended September 30,					Three months ended June 30,				Six months ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Cost-reimbursable	Cost-reimbursable	$	441,588	$	431,991	$	1,305,313	$	1,283,522	Cost-reimbursable	$	476,812	$	443,950	$	942,789	$	863,725
Fixed-price	Fixed-price	113,122		126,402		362,804		368,316		Fixed-price	100,540		117,474		216,284		249,682
Time-and-materials	Time-and-materials	83,111		77,803		251,506		227,762		Time-and-materials	92,000		87,154		185,824		168,395
Revenue	Revenue	$	637,821	$	636,196	$	1,919,623	$	1,879,600	Revenue	$	669,352	$	648,578	$	1,344,897	$	1,281,802


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		Page No.
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021	3
	Condensed Consolidated Statements of Income for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021	4
	Condensed Consolidated Statements of Comprehensive Income for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021	5
	Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021	6
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2423
Item 4.	Controls and Procedures	2423
Part II - OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 6.	Exhibits	2527


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Billed receivables	Billed receivables	$	313,336	$	312,991	Billed receivables	$	364,278	$	370,115
Unbilled receivables	Unbilled receivables	91,251		106,007		Unbilled receivables	157,557		118,387
Allowance for doubtful accounts	Allowance for doubtful accounts	(15,184)		(18,377)		Allowance for doubtful accounts	(10,354)		(12,467)
Receivables—net	Receivables—net	$	389,403	$	400,621	Receivables—net	$	511,481	$	476,035


For the remaining three months ending December 31, 2021		For the year ending
For the remaining three months ending December 31, 2021		December 31, 2022		December 31, 2023		Thereafter
$	0.6	$	1.0	$	0.2	$	0.4


	September 30, 2021		December 31, 2020
Operating Leases
Operating lease right of use assets	$	79,266	$	94,825

Operating lease obligations—current	$	31,291	$	30,105
Operating lease obligations—long term	$	67,306	$	80,242


	Goodwill Balance
Goodwill at December 31, ~~2019~~2020	$	~~1,191,259~~1,237,894
Acquisitions	~~46,624~~260,863
Acquisition fair value adjustment	11231
Goodwill at December 31, ~~2020~~2021	~~1,237,894~~1,498,988
Acquisition fair value adjustment	~~196~~12,080
Goodwill at ~~September~~June 30, ~~2021~~2022	$	~~1,238,090~~1,511,068


For the remaining ~~three~~six months ending December 31, ~~2021~~2022	$	~~5,730~~16,279
For the year ending:
December 31, ~~2022~~	$	~~23,448~~
~~December 31,~~ 2023	$	~~19,283~~26,438
December 31, 2024	$	~~17,486~~23,885
December 31, 2025	$	~~15,423~~20,801
December 31, 2026	$	~~14,331~~19,341
December 31, 2027	$	18,312


		Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Life		Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Life
Stock options outstanding at December 31, 2019		1,136,095	$	54.98	$	28,291
Exercised		(223,405)	$	46.72	$	6,897
Cancelled and expired		(126,863)	$	61.17
Stock options outstanding at December 31, 2020	Stock options outstanding at December 31, 2020	785,827	$	56.33	$	25,629		Stock options outstanding at December 31, 2020	785,827	$	56.33	$	25,629
Exercised	Exercised	(163,577)	$	47.89	$	6,270		Exercised	(196,735)	$	48.65	$	7,168
Cancelled and expired	Cancelled and expired	(14,800)	$	63.50				Cancelled and expired	(21,776)	$	63.80
Stock options outstanding at September 30, 2021		607,450	$	58.42	$	10,628	2 years
Stock options outstanding at December 31, 2021								Stock options outstanding at December 31, 2021	567,316	$	58.70	$	8,380
Exercised								Exercised	(99,286)	$	52.15	$	3,253
Cancelled and expired								Cancelled and expired	(9,983)	$	64.05
Stock options outstanding at June 30, 2022								Stock options outstanding at June 30, 2022	458,047	$	60.01	$	16,235	2 years

Stock options exercisable at September 30, 2021		380,122	$	54.37	$	8,191	2 years
Stock options exercisable at June 30, 2022								Stock options exercisable at June 30, 2022	403,471	$	58.00	$	15,112	1 year


		Number of Shares	Weighted Average Fair Value			Number of Shares	Weighted Average Fair Value
Non-vested stock options at December 31, 2020		353,643	$	11.66
Non-vested stock options at December 31, 2021					Non-vested stock options at December 31, 2021	114,067	$	12.16
Vested	Vested	(113,516)	$	10.06	Vested	(55,167)	$	10.07
Cancelled	Cancelled	(12,799)	$	12.27	Cancelled	(4,324)	$	12.59
Non-vested stock options at September 30, 2021		227,328	$	12.43
Non-vested stock options at June 30, 2022					Non-vested stock options at June 30, 2022	54,576	$	14.23


		Number of Units	Weighted Average Fair Value			Number of Units	Weighted Average Fair Value
Non-vested RSUs at December 31, 2019		210,827	$	55.31
Granted		266,880	$	68.83
Vested		(73,047)	$	53.85
Forfeited		(57,861)	$	64.52
Non-vested RSUs at December 31, 2020	Non-vested RSUs at December 31, 2020	346,799	$	64.48	Non-vested RSUs at December 31, 2020	346,799	$	64.48
Granted	Granted	197,670	$	78.62	Granted	236,240	$	78.78
Vested	Vested	(111,349)	$	61.75	Vested	(152,121)	$	61.06
Forfeited	Forfeited	(17,005)	$	63.95	Forfeited	(25,564)	$	67.07
Non-vested RSUs at September 30, 2021		416,115	$	71.95
Non-vested RSUs at December 31, 2021					Non-vested RSUs at December 31, 2021	405,354	$	73.94
Granted					Granted	200,760	$	81.02
Vested					Vested	(116,422)	$	71.09
Forfeited					Forfeited	(24,622)	$	75.30
Non-vested RSUs at June 30, 2022					Non-vested RSUs at June 30, 2022	465,070	$	77.64