ManTech International Corp (MANT) 2002 Q4 法說會逐字稿

Good afternoon, everyone. And welcome to the ManTech International’s fourth quarter and full year fiscal year 2002 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer period. If you would like to ask a question during this time simply press star, then the number one on your telephone keypad. If you would like to withdraw your question press star, then the number two. Today’s call is being recorded.

For opening remarks and introductions I would like to turn the call over to ManTech Corporate Vice President, Peter LaMontagne. Please go ahead, sir.

Thanks, Eric. And good afternoon, ladies and gentlemen. My name is Peter LaMontagne, and I am a Corporate Vice President here at ManTech International. Welcome to ManTech’s 2002 fourth quarter and full year earnings conference call. We are pleased that you are able to join us for today ‘s call whether by telephone or via the webcast.

Participating in today’s call from ManTech are George J. Pedersen, Chairman of the Board, CEO, and President, as well as John Moore, Executive Vice President and CFO.

Earlier this afternoon we released our 2002 fourth quarter and full year results. We have a lot of material to cover today in addition to taking questions, so let’s get started.

Our agenda for today’s call will be as follows. First, we’re going to have opening remarks from George, followed by John Moore, who will provide us with a financial and operations overview of both fourth quarter and the full year 2002, including an update on our acquisitions. John will conclude with financial guidance for 2003, both the first quarter and the full year. Then George will wrap the call up with a summary for 2002, and an outlook for ’03. And finally, we will leave plenty of time for your questions.

Before we begin our discussion, however, it’s important that we provide you with the required statement relating to our written and verbal disclosures, and commentary regarding ManTech and our results and operations.

Statements made in this press release which do not address historical facts could be interpreted to be forward-looking statements. Examples of such forward-looking statements include the company’s revenue and diluted EPS, guidance for first quarter ’03, and for the full year 2003. The company’s belief that Aegis Research, CTX, IDS, and MSM acquisitions will provide the company with numerous opportunities to continue to grow its revenues and expand its margins, and the company’s belief that there will be increased defense and intelligence spending in 2003. Such statements are subject to factors that could cause actual results to differ materially from anticipate results.

The factors that could cause actual results to differ materially from those anticipated include but are not limited to the following. Failure to successfully integrate the recent acquisitions into the company’s existing operations, failure to experience any accretive affects of the recent acquisitions, failure to experience favorable results from synergies resulting from the recent acquisitions, failure to experience favorable results from the treatment and deductibility of goodwill, failure of government customers to exercise options under contracts, funding decisions of the U.S. Government projects, Government contract procurement such as bid process and termination risks, competitive factors such as pricing pressures and, or competition to hire and retain employees. Material changes in laws or regulations applicable to the company’s businesses, and other risk factors discussed in the company’s filings with the Securities & Exchange Commission.

The statements in this press release and this conference call are made as of March 4th, 2003, and the company undertakes no obligation to update any of the forward-looking statements made herein whether as a result of new information, future events, changes in expectations, or otherwise.

With that, I’ll now turn the call over to George Pedersen for introductory remarks. George.

Thank you, Peter. Good afternoon, everyone. And thank you for joining us.

In a few minutes you will hear from John and Peter the details of our results for the quarter and for the year. By any measure 2002 was a historic year for ManTech International, and we are pleased to report to you our operational and financial accomplishments.

Many of you on this call are quite familiar with ManTech, but we also have new shareholders and investors participating today who are less familiar with our story. So let me take a few moments to review some of the highlights of the year.

We began 2002 with our IPO, which was completed in February. As many of you will recall during our IPO Road Show, and throughout the year thereafter in conference calls, one-on-one meeting, news releases, and conference appearances we outlined a specific strategy to grow organically and through acquisitions into the fast moving IT technical services markets, in key national security programs within the Department of Defense and the intelligence community marketplace. We also committed to improving our operational profit margins and disposing of certain of our international commercial businesses. I am pleased to report that we have executed this plan with very positive results.

Let me start with a brief reference to our discontinued operations. John will cover this topic in more detail, but I am pleased to report that ManTech has exited all five of the businesses that we highlighted as non-core at the time of our IPO. The sale and the disposition of these businesses is now squarely behind us. We are now a pure play Government IT technical services support contractor, and glad to be one. We look forward to the balance of 2003 and beyond with high expectations.

Toward that end strategic acquisitions have been a priority for us in 2002. We have announced four deals to date. Aegis Research in August, CTX in December, IDS just in February, and finally just yesterday [MNM Security Services] [ph]. We expect to close MSM very soon. John and Peter will go into more detail on these important transactions, especially the recent ones.

But what is important to remember is that our approach throughout the year was disciplined and focused. We stayed in our lane, we pursued only those deals that met our strict criteria. They had to bring new technology, new customers, new geographic location, and new technical managerial employee skills. You’ve heard it from us time and again, that’s what we did.

With these transactions came contracts and high level clearances to penetrate deeper into priority national security programs within both the DOD and the intelligence communities. We are now well-positioned in the fast growing market niches in DOD, and in new elements of the intelligence community, not just the ones we were involved with before.

Some of these were not available to us prior to the acquisition. As John will highlight in his discussions, these acquisitions will be key to our growth and margin expansion as we go forward, as well.

Our core ManTech business also remains strong. We continue our 30 plus year tradition of support to such customers as the U.S. Navy and NASA, where we won important re-competes to defend our incumbency. In fact, in 2003 ManTech will celebrate its 35th year as a corporation. Our guiding principles have remained the same, recruit, retain the best technical talent, and exceed customer expectation. Our mission is similarly unchanged, support priority national security programs with advance technology solutions.

Simply put, we leverage technology to help our customers succeed. So during 2002 while we executed our IPO and our follow-on offering, and the acquisition, our senior executives and operational managers continue to build and develop the business platform that has allowed us to get to where we are today. We will continue our top line growth in this core business, and margins did improve as compared with last year. 2002 and the fourth quarter concluded with our follow-on offering.

I want to take this opportunity to thank all of you who took time to meet with us to hear our story. We appreciate your support. We also value the feedback you gave us. We followed it. I also mentioned the excellent support we received from our team of investment bankers that helped us execute the offering. Jefferies as a lead, with strong support from Legg Mason, U.S. Bancorp Piper Jaffery, Adams, Harkness & Hill, and DBMG Capital Markets. They were a first class team.

In summary, we did what we said we would. We completed strategic acquisitions in our core market, we grew enterprise revenue by nearly 16 percent, we reached 500m in revenue for the first time in ManTech’s history, we improved profitability as we promised. Income from continuing operation was up 40 – over 40 percent. EBIT margins came in at 7.7 percent, compared to 6.97 in 2001.

Before turning the call over to John I would like to note two more points. First, 2002 was one of the most challenging years I have witnessed from the Congressional appropriations perspective. The debate on the Hill extended well into 2003, and we did not have a signed 2003 appropriation bill for non-DOD agencies until a couple of weeks ago. I have not seen this since 1970.

Because of our strategy to focus on DOD and intelligence programs we did not suffer any major setbacks. But this year was a good example of how the appropriation process can affect our industry. Because of the change in control of the Congress I do not expect this delay to occur in 2004. I hope I am correct.

Second and finally, you will hear from John and Peter as to the rest of our plans for 2003. Our strategy remains the same, but whereas in 2002 we focused on identifying and completing acquisitions, in 2003 we will be – it will be characterized by our focusing managing these new assets and maximizing value from cross-selling and other synergies. We will continue to have an active acquisition program, and we will follow the criteria as we have explained to Bob. I will comment further on 2003 at the end of the call.

Again, 2002 results demonstrate the strength of our business, our capacity for growth at the top and bottom line, our dedicated employees are our greatest asset, and their performance in this past year has delivered the success that is represented in our results.

Now, I’d like to hand the call over to John Moore, Executive Vice President and CFO, to [present] the financial results and operations. John.

Thanks, George. And good afternoon, everyone.

I hope you all have access to the summary financial tables we provided in our earnings release. They are already available on our web site, www.mantech.com, if you need a copy.

As George stated, 2002 was an historic year for ManTech. And we are very pleased with the results. We are a very different company than we were a year ago, not just because of the IPO and follow-on offering but because of our refocusing on our core business and the acquisitions we have executed. I will be discussing the fourth quarter in a moment, but first, let’s get right to the full year numbers and metrics.

For the full year, calendar year 2002, for the fiscal year ending December 31, 2002 revenue was up 15.9 percent to 500.2m, compared with 431.4m in 2001. This total includes 23.7m from ManTech Aegis Research Corporation since its acquisition by ManTech on August 5th, 2002, and 1.6m from ManTech CTX Corporation after its acquisition on December 11th, 2002.

Internal growth for the year was just over 10 percent in line with our estimates. The increase was driven primarily by expansion in our secured systems and information technology solutions service areas, especially expanded IT and security work for the U.S. Army’s Communication & Electronics Command in Europe, and support for various department State programs in the U.S. and abroad.

Income from operations, return on sales, EBIT improved 70 basis points for the year, increasing from 7.0 percent last year to 7.7 percent for 2002.

As we have discussed during previous calls regarding 2002, the increased margins were primarily a result of the company executing its strategy to increase the percentage of work on our GSA contract schedules, generally implemented as time and material or fixed price contracts.

During fiscal year 2002 ManTech derived approximately 39.8 percent of its revenue from GSA scheduled contracts, versus 32.6 percent during 2001. ManTech’s income from continuing operations was up 40.6 percent to 22.8m in 2002, compared with 16.2m for 2001. The effective tax rate for the year ended December 31, 2002 was 40.7 percent, compared to 42.7 percent for 2001. ManTech reported 2002 full year net income of 19.2m compared with 795,000 in 2001.

ManTech’s 2002 full year fully diluted EPS from continuing operations came in at 88 cents based on 25,957,761 weighted average common shares outstanding. Fully diluted EPS were 74 cents. Because of a stock split in 2002 prior to the IPO and in order to compare 2000 EPS with 2002 we have done a pro forma calculation to adjust 2001 full year results and weighted average shares outstanding as if the company’s IPO had occurred on February 12th, 2001.

According to this pro forma comparison full year pro forma fully diluted EPS from continuing operations for the core ManTech business increased from 73 cents in 2001 to 84 cents in 2002, an increase of 15.1 percent. Details of this pro forma calculation are addressed in the press release.

Our tax position as of December 31, 2002 was 81.1m reflecting our follow-on offering completed in December. This will change significantly based on the closing of the IDS transaction last week, and the upcoming MSM closing.

That covers the summary of financial statements for 2002. As George noted, 2002 was a very solid year, and our results confirm this. Additional details are available in our earnings release.

Next, I would like to turn to some of the key metrics we used to measure our business. First, as was the case throughout the year over 96 percent of ManTech’s revenue came from the Federal Government contracts with nearly 87 percent from DOD and intelligence community customers. As the full impact of our recent acquisition is felt in 2003 the percentage from DOD and Intel customers is likely to grow. Our strategy has been to build ManTech into a pure play DOD Intel contractor specializing in priority national security programs. We will continue to maintain this focus.

Second, reflecting our steady growth ManTech’s backlog increased more than 49 percent to 1.4b as of December 31, 2002 compared with 97.5m on the same date in 2001. This backlog increase is a result of acquisition and internal growth on existing programs.

Three, in 2002 we continued to see the positive affects of our strategy to expand work on our GSA contract vehicle. Our work under GSA is implemented as a fixed price for CNM contract which in our experience tend to carry higher operating margins. In 2002 almost 40 percent of our revenue was derived from GSA contracts, up from approximately 33 percent in 2001.

Four, as we have done throughout 2002 we are reporting GSA’s contract value as a means of reflecting the amount of work we expect to receive under GSA in the coming years. As of December 31, 2002 our estimated GSA contract value stood at approximately 915m, compared to 864.8m in 2001. I would encourage those of you not familiar with our GSA schedule calculation to refer to our earnings release or our SEC filings for additional details.

Five, the use of GSA schedules will continue to be an important part of our strategy in 2003. These flexible contracts benefit both the customer and service provider by streamlining the acquisition process and encouraging cost savings. We will continue to find the appropriate vehicle to support our customer needs, GSA, or traditional contracts.

Six, funded backlog at the end of 2002 was approximately 197m, down from 206.7m in 2001. We attribute the decrease primarily to the increase in work on our GSA which have shorter funding schedules.

Seven, our DSOs for the quarter ended December 31, 2002 were 79.4 days on a pro forma basis to reflect the acquisition of CTX Corporation as if it had occurred at the beginning of the period.

Eight, regarding our revenue by service area secured systems and infrastructure at IT Solutions combine to account for more than 76 percent of revenue in 2002, up from just over 70 percent in 2001. We see the trend as further evidence of our strategy to focus our high growth segments of the market, systems engineering, solutions revenue decreased to about 24 percent, compared with 30 percent in 2001. We will continue to focus on the secured systems and IT markets where we see more growth potential.

Next, our contract mix changed from 2001 with our cost plus contracts accounting for 38.5 percent of revenue, and CNN and fixed price accounting for approximately 61.5 percent. This drop was primarily due to a large cost plus contract we won in early 2002. Although we still see the increase of T&M and fixed price contracts as a driver for margin, it is important to note that in the intelligence community we are seeing more cost plus award fee contracts which have margins that can be on par with our T&M and fixed price work. We welcome this type of performance base contract in contrast with traditional cost plus contracts that limit our up side.

And lastly, ManTech served as a prime contractor on 90.8 percent of our Federal contracts based on revenue. As we reported before, we are open to acting as a subcontractor to access a new market or special small business to business, or [A and A] [ph] contract, but we always prefer to control our own direction as a prime.

We believe the metrics I just covered provide our investors with additional insight into our business. A complement to the financial results I discussed first. Now, I would like to address some operational issues to complete the picture of 2002.

2002 was the year in which we completed both our IPO and a following offering. The former in February, and the latter in December. Clearly, this interaction was a key operational highlight for the year. Our main mission was to access the public markets and funding to execute our acquisition strategy.

I will discuss our acquisition in some detail along with Peter in a moment, but I believe it is important to note that during 2002 as a newly publicly traded company with an aggressive acquisition program we stayed focused on supporting our customers and retaining our talented employees, our most important assets.

We also did very well with our voluntary turnover rates, 15 percent compared with 19 percent in 2001. We expanded our Board of Directors in 2002, as well, adding a distinguished representative of the intelligence community in Mr. Richard [Kerr] [ph], former Deputy Director for Central Intelligence, and an experienced executive from our industry.

Mr. Barry Campbell, former President and CEO of [Traincor Systems Technology Incorporated] [ph], and more recently in 2003 we welcomed Mr. [Steven Harland] [ph] to our Board as Chairman of our Audit Committee. His financial background and experience as Managing Partner of KPMG’s Washington, D.C. operating office make him a great addition to the Board and the Audit Committee. As we operate in a new environment that has resulted from the passage of Sarbanes-Oxley Mr. Harland will be an important resource.

Regarding Sarbanes-Oxley ManTech is on-track with compliance in all areas, and we are monitoring closely and preparing for proposed regulatory changes by the SEC.

Disposition of our discontinued operations was another key objective for 2002, and I am pleased to report that this process is now complete. As we’ve reported throughout the year our discontinued operations included three foreign and two domestic businesses that we elected to dispose of in order to concentrate on our core DOD and intelligence support business.

As reported in our third quarter call all of the businesses had been disposed of except for the Australia based IT and software consulting business. This transaction was completed in February of 2003, and although market realities compelled us to take an additional charge net of tax of 2.6m in the fourth quarter we are pleased to have completed the process so that we can focus our resources completely on expanding our continuing operations.

We also took an additional charge of 300,000 associated with contingencies related to earlier dispose of operations. This brings our discontinued operation process to an end, no additional charges from discontinued operations are expected in 2003.

In contrast with our discontinued operations efforts was on our acquisition program. We had a great year on the acquisition front, completing three transactions, and planning a fourth before the one-year anniversary of our first earnings conference call. The operational tempo kept our acquisition team quite busy, but the results we believe were excellent.

Many of you are quite familiar with our acquisition criteria. We have reiterated them on every call and in every meeting. We sought only acquisitions that would first, enhance ManTech’s technical capabilities, second, expand our customer base within our target DOD and Intel market, three, add new geographic locations, and, last, broaden our employee skill base by adding new technical and executive personnel with high level clearances. We are also committed to making these deals immediately accretive, and ensure that operating profit margins would be in line with our targets.

We are very excited about the platform we have created, and I would like to ask Peter to mention, again, briefly how these diverse yet complementary acquisitions map to our strategy. Peter.

Thanks, John. As John mentioned we have completed three deals in approximately eight months. And the fourth will close soon. Our first acquisition was Aegis Research Corporation, a pure play Intel and DOD support company with unique expertise in the area of secrecy management, information operations, and information assurance. Aegis added to the ManTech enterprise over 500 employees, almost all with top secret security clearances with special accesses. New customers that came with Aegis include NRO, the National Reconnaissance Office that is, the Air Force, as well as classified programs with other DOD and intelligence community customers.

Our next acquisition in 2002 was CTX Corporation, which added over 180 personnel. The technical expertise that CTX added related primarily to software and IT work for classified programs at NSA and CIA. Excellent engineers with operational customer experience and expertise in advanced web technologies such as J2EE made CTX well-positioned to attack collaboration and data mining challenges.

Last week we closed the IDS acquisition, again, DOD and Intel focus. This time with a strong DIA, DOD, and intelligence presence. IDS had a cadre, has a cadre of cleared software engineers that have significant experience enhancing legacy applications and building new apps, especially for advanced messaging and collaboration work. Approximately 230 IDS employees joined ManTech as of last Friday, including the founder and CEO, [Robert Coleman] [ph].

And just yesterday we announced the signing of a definitive agreement to acquire MSM Security Services. This 100 person firm specializes in background investigation support services for Federal Government customers, including NSA, the U.S. Custom Service, and the Defense Security Service or DSS. We know this company well based on our relationship in the joint venture. And we see many opportunities for growth in this niche but expanding market.

The commonalties among these companies are quite clear. Support for DOD and Intel programs, technology, high level clearances, strong growth, and profitability. I am confident that you can see how these companies combine with ManTech’s core expertise to form a first rate platform from which to grow our business and penetrate more deeply into our target market in the defense and intelligence community.

I would like to just conclude there, and turn the call back over to John for some comments on our integration and future plans with regards to the acquisitions. John.

Thanks, Peter.

Now that we have these acquisitions let me take a few moments to address integration and execution. We are making solid progress on integration of the back offices of these companies. ManTech Aegis Research is already up and running successfully on our Peoplesoft ERP platform, and the other companies will follow suit beginning in the second quarter and into the third.

More important is the integration of our business development and customer support activities. Although all of the companies are relatively new to ManTech we are already seeing solid cross-selling opportunities that would not have been possible without our coming together on one platform.

With MSM we already have a joint venture relationship so they will be essentially integrated and operational from day one. All but MSM are operating under ManTech’s National Security Solutions Group which is led by ManTech Executive Vice President and former CIA Deputy Director over Science and Technology, [Evan Heiman] [ph]. I cannot emphasize enough how important Evan’s leadership has been in this process. Evan is well-known by the Senior Managers in Aegis, CTX, and IDS, and equally important is that our new customers know of Evan’s accomplishments, as well.

One very positive indicator we’ve seen is that although our G&A increased in 2002 with these acquisitions as a percentage of revenue G&A remains steady at 10.4 percent compared with 2001.

As we have committed to from the beginning these deals are expected to be accretive to our earnings as evidenced by Aegis Research in Q4. In addition, margins are expected to be in line with our current and target projections. All four companies are in fast-growing markets, there’s great promise in the coming quarters with these companies working together and integrating into NSSG.

In anticipation of your questions about valuations I want to reaffirm that we approached these acquisitions with discipline. While it is true that three of the four acquisitions were some form of competitive process we were guided by our own valuation parameters and not by our desire to close the deal. We encountered several of our peer companies as competitors for these deals, and we are pleased with the results. Our financial team which was supplemented by outside advisors reviewed each opportunity on its own merits, evaluating each company based on discounted cash flows, EVA, and EPS accretion.

Interesting to note is that from an EBITDA multiple perspective we actually paid sequentially less for each transaction with the anticipated affect of the [33388 election] [ph] multiples effectively dropped even lower.

We examined dozens of acquisition opportunities during the year, and we said ‘no’ to all but a handful based on the criteria I mentioned earlier. We believe we acquired premiere companies, in the DOD and intelligence IT marketplace. All four firms are firmly routed in ManTech’s tradition of great service in national security programs. But they also highlight our path forward toward more advanced technology solutions in increasingly challenging classified operational environments. All on behalf of DOD and Intel customers.

Finally, I want to comment on the status of our acquisition plans. As George alluded to earlier, we believe we have brought together four excellent firms that will complement core ManTech capabilities in the coming quarters. While we continue to examine acquisition opportunities our focus for the balance of 2003 will be on integration of business development. We are by no means ceasing our acquisition program, but we want to take stock of our current platform and leverage our capabilities horizontally across the enterprise.

I want to get to our 2003 guidance, but first let me comment on the fourth quarter. The fourth quarter was really a microcosm of the whole year. Solid growth, margin expansion, and acquisition activity, in addition to the follow-on offering in December. Regarding specific fourth quarter 2002 results and highlight we have a few key points to mention. Additional details may be found in the earnings release.

First, fourth quarter revenues increased 23.7 percent from 115.1m in Q4 2001 to 142.5m including 14.6m from ManTech Aegis Research Corporation and 1.6m from ManTech CTX Corporation, only from the closing date of December 11th, 2002.

Second, income from operations for the fourth quarter increased 36.3 percent to 10.7m with operating margins increasing to 7.5 percent from 6.8 percent a year ago. Q4 margins reflect 7.8 percent from ManTech Aegis Research Corporation and 7.5 percent with core ManTech.

Three, ManTech fully diluted EPS from continuing operations for the fourth quarter were 23 cents, two cents from ManTech Aegis Research, and 21 cents from core ManTech.

Lastly, however, Q4 saw several solid contract wins for new business and recompetes. Now, Air Systems Command, Nav Air contract, with a total estimated value of 33.4m over the term of one-year base period plus four year options. The United States Army Medical Command, Fort Sam Houston, Information Technology Services in support contract under GSA with an estimated value of 6.9m over a term of a one-year base plus four one-year options. And we were awarded from the Space Enabled Warfare System Center a follow-on contract with an estimated value of 41m over the term of a one-year base plus four one-year options.

In summary 2002 was a very positive year for ManTech. Revenue and income were both up substantially with a solid backlog to carry us into 2003. We completed excellent acquisitions, and successfully won new business in addition to defending incumbency. Our focus now is on 2003, our first full year as a publicly traded company, and the year that we’ll see our expanded business platform come into play as we continue to target businesses in our secured systems and IT solution areas within the DOD and intelligence community.

Let’s take a look at 2003. We are offering the following guidance which assumes the closing of MSM, the deal we announced yesterday, and expect to close very soon. However, the numbers do not reflect any future acquisitions not announced already. As is reported in the earnings release we anticipate revenue for the first quarter to come in between 140m and 143m. Based on 32,131,405m weighted average common shares outstanding for the first quarter we expect diluted EPS to be between 20 cents and 22 cents.

For the full year we are projecting revenue in the range of 667m and 680m. And based on 32,202,304m weighted average common shares outstanding for the full year 2003 we expect diluted EPS to come in between $1.01 and $1.05 per share.

As noted earlier, we do not anticipate in taking any additional charges for discontinued ops in 2003. We are particularly pleased that our guidance for the year keeps us in line with EPS levels, forecasted prior to our follow-on offering.

In short, we believe 2003 looks very promising for ManTech and the industry as a whole.

George is now going to provide you with additional information on 2003 and some concluding remarks. George.

Thank you, John.

Before we begin our question-and-answer period I just want to reaffirm our strategy for 2003. Our primary focus will be the integration and leveraging of our new companies into our organization. The 2003 appropriation cycle was challenging, but 2004 appropriation process is already underway and should be less complex. I base this on a conversation I had with a member of the Defense Appropriation Committee today. We think that it will return to whatever normal is. We do not know what impact an engagement in Iraq or elsewhere will have on spending bills for 2003. We will track the situation carefully. You’re all aware of the dialogue going on between the President and the Congress seeking additional funding.

We remain committed to maintaining our focus on DOD and intelligence spending, which we see is not only well-protected but poised for growth. We’re also tracking homeland security opportunities at the State and Federal level. We still have not seen the substantial funding expected beyond what it is process through existing spending bills. Again, there are now 22 agencies in new departments, and we see a tremendous potential up side as the year progresses.

Needless to say, we are watching the situation in the Persian Gulf carefully. We support the President and what he is trying to do. We do not anticipate that a continued deployment there will have a negative impact on us. Indeed, it may well be the opposite.

I will stop here, and hand the call back over to the Operator, and start the questions-and-answer. Again, thanks to all who are participating, and thank you for your support of our public offerings in 2002 in both February and December. We hope to see all of you during our conferences and meetings and travels in the near future. We will have a schedule of our planned trips for conferences on our web site very soon.

As always, we welcome your phone calls and visits here in Fairfax. Let’s go to questions.

(Caller Instructions.)

There has to be a question!

Your first question comes from Barbara Coffey with Jefferies.

Hi, guys. A couple of quick questions. When I take a look at what you broke down as segment revenue with about, with the secure systems in IT having increased as a percentage of sales, when I take a look at it I show something like 20 percent growth in those two segments. Is this correct?

Thanks, Barbara. We don’t, as you know, we don’t break it down as segments. But in our solution area that is an accurate breakdown growth wise.

Okay, and then another few things. Post acquisitions, about how much cash do you think is -- will you have? And then, the other one is can you tell me, give a bit more color on the cross-selling that I believe John spoke to, that you’ll be able to do or some of the opportunities you’re seeing.

Well, post-acquisition right now from a cash standpoint we will probably have between 10 and 17m.

Okay.

As far as cross-selling goes, that’s – let me turn that over to Peter.

Yeah, we are particularly enthused about CTX, IDS, Aegis, and our core ManTech working together. We’re not going to comment on specific pending procurements because obviously for competitive reasons. But there are natural overlaps in areas where we have been providing infrastructure solutions, especially secure infrastructure solutions that will be very easily complemented by some of the advanced software solutions that IDS and CTX are working on.

Likewise, with the acquisition of MSM in the area of background investigations we’re going to be able to offer those customers a more full suite of IT services to help those investigation process work more smoothly and we hope more profitably.

In addition, Aegis Research Corporation does some work in the area of adjudication for background investigations, and we anticipate that MSM will be working closely with the Aegis Research Corporation on projects like that. So those are a few examples, and certainly as we succeed in these areas we will report them. But, again, in advance of procurements we’d rather not comment.

Thank you.

Your next question comes from George Price with Legg Mason.

Thank you. First, growth, or the revenue that came from Aegis in the quarter, looked a little, a few million light relative to the expectations, and I think relative to the expectations you outlined earlier in 2002. Could you give us a little color on what led to that?

Aegis was short in the fourth quarter revenue of approximately 2.9m. And that was due to some ODCs at the end of the year that did not come through the cycle as we had expected them to do.

Okay, is there any impact to, you know, your expectations for Aegis in ’03?

No.

None at all. We have the same view – this is George Pedersen. We have the same view of Aegis Research as the day we closed the deal.

Okay, so remind me what the 69m, is that what’s anticipated?

Yes. We had 15 percent growth over 2002.

Okay, and now, I’m not sure I heard exactly. Did the guidance that you gave in the press release, that does factor MSM?

Yes. For the first quarter of the year.

I’m sorry.

Yes.

Yes, for the first – okay. What are, what is the IDS impact and the MSM impact for the first quarter?

Well, we are not releasing specific guidance on both IDS and MSM. If we go back to the press release for IDS and what they did last year 2002 revenue were – we had given out some guidance in the press release of approximately 40m, and for MSM did approximately 19.9m. And we are projecting growth, as we mentioned in the press releases as well as today, these are in our fastest growing marketplace of approximately 15 percent, a minimum of 15 percent.

Okay. Now, I guess given all of that rolled in the top line guidance looks a little bit below where we were coming out. Is there – and can you give it a little bit more color there, given the challenging funding environment, or possibly what’s happening with the situation with Iraq? You know, how long do you think that situation is going to persist? Or what impact, do you know, you see that having this year? And is that – are you sort of factoring that into guidance?

Let me make an overall comment on the guidance for 2003. For the overall year we are projecting a very significant increase in sales. It’s approximately 33 percent at the low end, and 36 percent on the high end. For the first quarter we have very strong growth over the previous quarters, approximately 29.5 percent at the low end, and 36 percent at the high end. Exceeding our top line growth target of 20 to 25 percent.

Okay. And if you could maybe give a couple of housekeeping items, accounts receivable, billed and unbilled in the quarter.

Well, from a general standpoint as far as DSOs on accounts receivables, our overall goal is to keep them under 80 days. And I think we achieved that all during 2002. And as we mentioned, the fourth quarter was pro forma with the CTX in there and 79.4 days.

As far as dollar amount, at the end of December 2002 total receivables were 133.1m, and I’d have to, I’ll have to get you a breakdown of billed, unbilled. But unbilled is approximately 34m out of that total.

Okay. And in terms of, for the fourth quarter cash from operations and capex?

Well, for the total year the operating cash flow in ManTech was 7.4m. And …

Capex.

And capex for the total year was 2.7m approximately.

Okay, 7.4m and 2.7m for the total year. Okay. Now, I guess the last question, any update on the outstanding subpoenas?

Since our reporting in our last S-1 there has been no discussions or no additional information, both internally and externally, to the issues regarding the one subpoena with the AUSA down in Alexandria. And the second one on the DSS there has been no additional discussions both internal and external on that either. Everything you have in the latest S-1 that was produced on the follow-on is what we – is the only information we have. We’ve had no further inquiries or whatever on either one of those issues.

Okay, is there any, you know, expected milestone or next step, or you’re kind of waiting to hear what that would be?

Well, the next step, the ball is in their court. We have provided all the information they have requested. We have requested to clarify or meet with them at any time on the information we’ve requested. And so, this is a timing issue for them, and it’s a matter of just waiting for them to come back. But we have cooperated 100 percent with all the information, and as we’ve stated in the S-1 we do not believe that either one of these issues will have any material impact on the company going forward with their customers or anything else.

Okay, great. Thanks very much.

Your next question comes from Tom Meagher with BB&T Capital Market.

Yes, thank you. Once again, great quarter. John, just actually a couple of quick housekeeping items. You mentioned the breakout of the contract mix by cost plus and then T&M and fixed price. Can you give us what the comparable number was for ’01?

’01, yes.

As John is pulling that up, I think the point you’re getting at there is we did have a larger cost plus contract that drove that mix up slightly. And we’re also seeing a trend among some of the Intel customers, as we said, towards cost plus awards fees. And we’re trying to make the distinction that these cost plus awards fees which are performance based contracts, we welcome them because we can earn margins that are similar to T&M, as well as fixed price. And we contrast that with the traditional type cost plus contracts we’ve seen in the Navy and other customers where the return on sales there has been in the three to five percent range.

Right.

And go ahead, John, sorry.

Tom, on the revenue mix side, cost plus contracts in 2002, as we mentioned, were 38.5 percent, 2001 they were 35.2.

All right.

Time and material 2002 was 45.1, versus 36.2 in 2001. And fixed price was 16.4 percent in 2002 versus 28.6 percent in 2001.

Okay, great. And then, John, just if you have the receivables and payables number from the balance sheet?

I gave the receivables earlier, Tom. Total receivables at the end of December of 2002 were 133,122,000.

Okay.

And from the payable side, total payable and accrued expenses are 32,905,000.

Okay, great. Thanks very much, I appreciate it.

Okay.

Your next question comes from Cynthia Houlton with RBC Capital Market.

Hi. I was just hoping to follow-up on the revenue guidance for both Q1, and then for the full year ’03, given the acquisitions. I know you’ve given a range of what ’02 revenue is. And even if we use a conservative assumption of no growth of these businesses and you assume there’s no revenue in Q1, I guess we’re coming up with a $20m revenue disconnect. And so could you just – I know that you addressed this partially in a prior question, but could you just give a little bit more color on where the disconnect is?

I guess I’ve got to figure-out your 20m, Cynthia. But …

You know, it’s very simple. I just took the ’02 revenue from the three companies you acquired, and assumed that there’s going to be no revenue in Q1. That gets us to 71m in revenue for the balance of ’03. And it looks like you only increased at the high end of your range revenue by 40m. So I am just trying to understand.

And the other point, I guess, is that my understanding is that these are generally higher growth segments also.

That’s correct.

So could you help me with the math?

Let’s – we can break it down, and what we are trying to do – this is Peter, Cynthia. We’re – what we’re – the way that John has outlined it, you know, we have strong growth that we’re expecting from the core acquisitions that were completed. And assuming 15, approximately 15 percent growth.

By that point, and in addition to solid growth for our core business, and we understand where you’re saying the 20m. But what I think I’d like to do is we will have to get back to you specifically on that one, and talk about your model. And if we come up with anything that’s material, of course, we’ll pass it along to everyone.

Okay. Then maybe just on the first quarter. The range of Q1 is, I guess, in line with where the prior guidance was. And we had not been modeling any acquisitions. Are we – are you assuming that there won’t be any acquisition impact of the more, the recent CTX or IDS in the first quarter. Is that how you get to the 140 and 20?

Well, first of all, IDS and MSM, the maximum they’re going to have in the first quarter is one month. And we haven’t closed MSM yet. And so MSM, the maximum will be – and IDS was closed last Friday. And so they’re going to only have one month revenue. And you can assume, it’s correct to assume that our growth rates in these higher groups are going to be in the minimum of 15 percent range as we had talked about before.

So what I’ll do is I need to sit down and break down the companies for you to show you where we’re at. And we’ll get back to you on that issue.

Okay, all right.

I don’t think – I think, you know, you have to look at IDS and MSM as not adding anything material in the first quarter.

I think I understand that. I think for the rest, I think for the balance of ’03 I am still, you know, we don’t, we can’t quite make the numbers add to what your guidance is. And we’re trying to get a sense if there’s any large contracts in your core business that are either falling off, or you assume are not going to be renewed?

No, that’s not the case at all. Our core business, as we had mentioned, our internal growth targets are 10 percent which have been in line with what we have been doing from the beginning.

Okay, I guess we can follow-up after. Thank you.

Okay.

Your next question comes from Brent Manderfeld with U.S. Bancorp.

Not to beat a dead horse here, but just in terms of the seasonality that we should look for Q4 relative to Q1. I guess if I just add in, you know, say 8m or 7m of CTX revenue into the March quarter should we be assuming that revenues are falling out of somewhere else? Or is there some seasonality in the business that we should be looking to? And secondly, what is the headcount at the end of the fourth quarter? Thanks.

I’ll cover the headcount for that one. At the end of December 2002 our total headcount was approximately 4,000 – well, it was 4,265. That, of course, did not include IDS which added approximately 230, and 105 from MSM. Nor did that include the 180 which is included in CTX.

Okay, thanks. And, go ahead, John.

Regarding the first question. I think it goes back to Cynthia’s question. Let us ferret out the individual companies, and we’ll come back to you.

Okay, thanks.

Your next question comes from Nick Trottman with Adams, Harkness & Hill.

Hi, thanks. Your percentage of business from GSA contracts has been hovering around 40 percent for the year. Is there an opportunity for that to go higher in ’03? And will that be a source of margin expansion going forward?

I would say that, you know, we’re up from almost eight percentage points from last year. And our customers are continuing to use this vehicle on an ongoing basis. And so we would expect the GSA contracts to continue to increase, but they’re going to peak-out at a point in time because we do have our traditional contracts that obviously have a significant backlog in it also.

But we are looking for our margins to expand. And in the first quarter while we didn’t give it any guidance on the margins we have a range of between 7.5 and 8, 7.9 percent at the EBIT line and 8.5 percent at the EBIT line depending on the range that we hit from the sales side. And for the full year we’re looking at between 8.4 percent and 8.5 percent at the EBIT line which is an increase of over nine percent from last year.

So we aren’t looking at, I think from 2001 to 2002 we increased our margins approximately 10 percent, from seven percent to 7.7. This year we’re looking at a nine percent at the low end, from eight – as I mentioned 8.4 to 8.5 percent. And so we are looking at margin expansion, and that will come with the mix change on the GSA contracts, as well as some contract changes.

Okay, great. And do you have internal growth of your different business segments, meaning the Department of Defense, Federal, Civilian, and Commercial?

No, we do not report that information. We do not do segment reporting.

Okay. Are there any significant recompetes over the next two quarters? And if so, could you quantify the value of those?

We don’t really comment on specific recompetes coming up in our assessment in the value, for some of the same reasons that we talked about earlier for, because of competition issues. But in the – as we’ve highlighted before in the normal course of our business, no particular task order for us accounts for more than 10 percent of our revenues, and so we do not see any material adverse affect if we did have one coming up. But we don’t generally comment on that.

Okay, great. One last question, what were the win rates in the quarter?

We do not track the win rates on a general basis, but because it’s done a lot of different ways. And some cases those are contracts we don’t count as wins. But I can give you a general parameter for the year.

Based on dollars of proposals that we bid on our win rate was 50 percent on a dollar basis. If you use number of proposals we submitted our win rate was 76 percent.

Okay, and that includes recompetes, or?

Yes.

Okay. All right, thank you very much.

Your next question comes from Mark Jordan with A.G. Edward.

Good afternoon, gentlemen. You’ve just commented, or gave some guidance or thoughts on ‘03 operating margins and trends. Could you comment as to where you see those going over the longer term, being sort of the ’04, ’05 timeframe?

Well, I would say that as we continue to target the high growth areas that’s why our margin expansion has happened. And we’ve been very happy, we’ve increased our margins in the last two years 10 percent, and then nine percent projected in this particular year.

And so as we have stated many times on the road, as our contract mix continues to change we expect the margins to go up. I would also like to say that I know that didn’t answer directly where it’s going to go. But if we achieve a 10 percent this year margin expansion off of our 7.7, and get up to the 8.5 band, as we have commented sometimes on the road, I think that to get up to nine percent in the 2004, 2005 band is not unrealistic to meet that level.

Okay. A second question on free cash flow from operations, what should be a reasonable expectation for the upcoming year? And sort of the drivers in terms of capex and depreciation of intangibles, et cetera?

Our – for the ’03 our basic projections right now, we’re looking at operating cash flow in a range of 20m to 21m, and free cash flow in a range of 17m to 18m. And capex, we’re probably looking at approximately $3m.

Okay, thank you.

Your next question comes from David Garrity with American Technology Research.

Yes, hi. Good afternoon. I was curious, in looking at your backlogs including also the amount that you’ve got in your GSA schedules, that changed I guess from the end of September to the end of December by approximately 137m. Can you give us an indication as to how much of that increment of the 137m came from the acquisitions? And how much was due to your core operations?

We haven’t broken down – we’ve broken it down, David, obviously. But we haven’t revealed it that way. And the reason for that going forward, because of the cross-selling synergies that we talked about we believe it’s, you know, it’s going to be difficult to identify one from the other. Obviously, it’s broken down by contract. But if two sister companies are working together on a particular project it’s going to be difficult to sort of ascribe it.

I think what’s important, though, is we’re trying to equip our shareholders and analysts with enough information to understand the nature of our acquisitions. Which is why we’ve talked about the historical revenue numbers as well as talking about expected growth figures. And I think that allows you to get insight into where these companies are going, as well as maintaining insight into the core ManTech business.

Okay. One other question. You indicated in the text that your core ’02 revenues were approximately 475m. Was that excluding the divested operations in Australia?

Yes.

Okay. And you’re basically saying that that number should be growing at approximately a 10 percent rate?

Yes.

Okay, so gross that up by 10 percent, take your guidance and subtract that gross of 10 percent core number, and that’s going to be your contribution coming from acquisitions plus any new business in '03?

Yes. Let me go back and address this sales question, because we seem to be, have a couple of issues regarding how we got to some guidance numbers.

First of all, let me just help you with the math a little bit on the core business. If we take 10 percent growth in our core business next year that gives us a base of 522m. As we stated before AEGIS, our guidance is 69m for the coming year. If I take the three acquisitions, and I take MSM to 20m approximately in ’02, gross-up that by 15 percent and count it in for only 10 months. And I gross-up IDS, which in our press release we said it was 40m, gross that up by 15 percent, and allocate it over 10 months, and take CPX which did 35m and gross it up by 15 percent. Those three numbers come to 97m. If you take that and add it to the Aegis and the core business piece you get a total sales for the year of 688m.

And so, Cynthia, I don’t know if you’re still on there, or Brett, or whatever, but that’s how we got to -- and we put a range in our guidance that we had in there of 667 to 680. And so if you just take those pieces you're at 688. And so I think we're right in the ballpark.

Yeah, you are. Although I guess the question comes up if we look sequentially, going from the fourth quarter to the first quarter. Taking the mid point of your first quarter revenue guidance, you’re basically saying that the quarter is going to be flat sequentially?

Well, I think if you go back historically to ManTech, last year we did 108m for the quarter, the prior quarter to that we did 105. And so I believe – I am pulling the X ones right now.

Yeah, but so last year you were up modestly quarter-over-quarter. And it looks here if we were to back-out the acquisition contribution in the first quarter of ’03 to the guidance you gave us of 140 to 143 it would say sequentially you’re down. And I guess the question people have is ‘what can we attribute that to? What was the contribution you got from the divested business?’

Right, but let’s go back to the S-1. I want to refer you back to that. In December 31st, 2001 we did 115m in revenue. On March 31st, 2002 we did 108. We actually went backwards.

Well, you’re down 7m.

Right. I mean there are some seasonalities that happen within the quarter with ODCs, and there are other factors relating to maybe a subcontract, et cetera. And so I don’t think you can exactly take that and take the fourth quarter and say ‘they should increase sequentially up from there.’ Because for the year you know, we’re talking about a – I just laid out the sales of how we got to it.

Yes.

And we are – while we didn’t give you guidance for the remaining quarters. If you look at the first quarter, the revenue range of at the low end of 33 percent. And we did 142m. The guidance is going to sequentially go up in all the four quarters, because you can’t take 142 and just multiply it by four. You don’t get the 680.

No, clearly. Now is that …

There’ll be significant increases.

Yes, I just wanted to come back and revisit the issue before the end of the call. I thought it was important to get out and get it solved here.

Sure.

No, I appreciate that, David.

Okay.

You have a follow-up question from George Price with Legg Mason.

Thanks. Just wanted to – I think the tax rate was just a hair below what we were anticipating in the fourth quarter. What should we expect in ’03?

40.7 percent is our tax rate for ’03.

Okay. And I just wanted to confirm, did the cash balance, you said you had at the end of the year?

81m.

81m. Okay. And your internal growth expectation, well, actually we just covered that.

I wanted to get back to earlier comments on the acquisition pipeline and expectations. I mean you seemed to suggest that you’re going to kind of lay-off the acquisitions to, you know, digest what’s been done. And focus primarily there. Should we, you know, I guess should we expect any acquisitions this year? Or and maybe, if so, maybe what period, maybe towards the latter half of the year?

This is George Pedersen. We have not gotten out of the acquisitions. We have a list that we continue to evaluate. We just do not have one sitting on the shelf at this point in time, and we are now, not now in very intense negotiations as we were with the two we just closed. There will be acquisitions if it’s – if they meet our criteria, no question about it.

Okay. And the last question, it was interested -- to dig in a little bit more on the comments in terms of the potential impact of the conflict with Iraq in terms of, you know, some spending. Possibly being deferred, and other spending being accelerated.

You know, I would think of the number of the companies out there positioned in defense and Intel, you might be among those with a higher probability of seeing net, net a little bit more of a positive impact, given your support in forward areas, and so forth. Can you talk about maybe some of the areas that, types of work that you do, that you think would, to the extent you can, that you think would be positively affected? And what specifically, at least at this point, you think would be, you know might be deferred or held-back for a little while?

As you know, we are on a battlefield. Traditionally in this kind of economy. There was an article in ‘The Washington Post’ either yesterday or the day before. And it describes companies like ours who are on the battlefield. I think at this point in time it’s hard for us to comment on what that revenue might be. There’s an ongoing debate between the President and the Congress over supplemental appropriations, and I think you know about that. And I believe the President had requested a $20b supplemental. I think the Congress was offering to respond to his request in incremental funding, which I don’t think the President wants.

I don’t think anyone yet knows what that war will cost. The numbers I have heard have ranged from 20b to 100b. And the debate will go on between the Congress and the President, and at this point in time we’re not about to include in our projections potential sales until we see what the President does.

When all the debate is over you have to remember the President under law has the ability to spend funds on defense without going to the Congress beforehand. There is an Act called the Food & Forage Act that goes back to the Civil War. The President has the right to spend the money. Now that Act was used in both Bosnia and Kosovo.

So for us or anyone else to sit here and try to forecast what those expenditures might be we just don’t think they should be included in our estimates. The only thing we all know is that they will spend more money soon. And I think that from a revenue point of view we will share in that revenue because we will participate in that market.

And George, this is Peter. With regard to our specific duties. You know, we’re careful as I think all of the contractors were in that article yesterday in ‘The Post,’ not to talk about our specific locations of where we’re deployed.

But we do as we’ve discussed before, provide advanced engineering and technical support to help the U.S. Military set-up, maintain, and operate their advanced communication systems in and around the battlefield, in addition to supporting them on logistics efforts to make sure that they have that infrastructure in place, and to make sure that it’s able to be sustainable in the harsh environment.

And our mission varies from business unit to business unit, but the largest presence certainly is reflected in that type of field support work that as George highlighted we’ve been doing successfully since the first Gulf War, through Bosnia, and also in Central Asia for the War on Terrorism.

There’s also movement in the Congress on the whole issue of homeland security and committees set-up to deal with that. And I think you’ve got that. There have been press releases. There’s also recent talk in the Senate that there will be separate Appropriation Committee in the Senate for homeland security. The so-called 14th Subcommittee. I don’t know whether that actually occurs, but if that does I think that that means that they’re trying to improve the mechanism to produce that funding. I think the number last year, [over the] 22 agencies was $36b. The numbers I am hearing are substantially greater than that certainly.

Great, thanks very much for the insight.

(Caller Instructions.)

You have a follow-up question from David Garrity.

Yes, hi. George, thanks for your insights, as well. Any idea, not to [recomplaint] it in here, of course, but to get any sense historically, when there’s been conflict and there’s been additional levels of spending and your staff has been involved in support, you know, near the front line, any ideas as to what sort of profit contribution you’ve typically seen off of that?

The profit contribution is identical to percentage wise what we have normally. The contracts we have are not – the contracts we have to support the battlefield are not specifically written for the battlefield. We have those responsibilities and assignments now. It just means more tasking and more funding on existing contracts.

Okay.

In all of the battlefield situations we will be there, and there potentially could be substantial sales increase. The one thing different from Desert Storm a dozen years ago, and Bosnia, and Kosovo are the use of these DSA, T&M contracts. I hate to say that you make profit on war, but under the situation we have today the type of support we will provide will be under contracts that provide higher margins.

Well, I think everybody will tend to treat it, hopefully, as being sort of a non-recurring event.

When you say ‘non-recurring,’ non-recurring sales, or?

Well, we don’t expect to be fighting war perpetually. So it’s not something we’d factor into sort of our modeling going forward.

Absolutely. We hope that the U.S. Military meets the same type of success we saw the first time we were in Iraq, should they have to go ahead again.

Right.

Let me make one other comment on that, and you’ve heard me say it before. No one could have written the scenario we saw play-out in Afghanistan. There were those who were predicting that it would be a long engagement resembling Vietnam. That certainly is not what happened.

What we have seen, the President and the Department of Defense is looking at very sophisticated and effective means of dealing with this threat. I have a lot of respect for the President and for the Team. And I think that if they do go in, and we don’t know that yet, but all the indications are, it may be a different scenario than anybody envisions today. I’m not telling you they’re going to pull-off the same type of thing they did in Afghanistan, but there’s a lot of work going into this. That’s all I can tell you. ManTech at this point in time has people in six countries surrounding Iraq, and so.

Well, God speed in your work.

Okay.

Your next question comes from [Collin Gillis] [ph] with RBC Capital Market.

Yes, hello, everyone. Just a quick follow-up. Is there any guidance for what the total debt might look like at the end of 2003?

Right now, the only debt that we have outstanding is 25m, which was the interest rate swap that’s been discussed many times. It’s in our S-1. On a – from a car cash position outside of that we don’t anticipate any unless we decide to do additional acquisitions. But that would be the only debt I would count.

In terms of the acquisitions, up to this point in time all acquisitions have been done for cash. At some point in time we expect to do an acquisition for stock.

Great. Thank you very much.

At this time there are no further questions.

Thank you for your questions, and thank you for participating. As I mentioned at the beginning of the call, we are very pleased with our 2002 results and we look forward to 2003 as even a better year.

I just want to take one more moment to mention the men and women of the Armed Forces, and the intelligence agencies, and the other Government organizations that are in places around the world in harm’s way, including our people. As I said, there was an article in ‘The Washington Post’ in recent days discussing that, the contributions of many of the companies in our industry. We can’t provide many details, but I do hope that you remember these folks are out there. And I think they will be successful when the time comes.

Thank you for participating. And John will get back and clarify a couple of those issues on the terms of how we calculate the sales numbers. But, again, we see this in a very positive way. Thanks for your participation.

And that concludes today’s teleconference. Thank you for participating in today’s ManTech International fourth quarter and year end 2002 financial results conference call. This call will be available for replay beginning at 9:00 p.m. Eastern Time today through 11:59 p.m. Eastern Time on Tuesday, March 11th, 2003. The conference ID number for the replay is 7860140. Again, that conference ID number is 7860140. The number to dial-in for the replay is 1-800-642-1687, or for international participants 706-645-9291. You may now disconnect.