ManTech International (MANT)

Year Ended December 31, 2004 Compared to the Year Ended December 31, 2003

Revenues

Revenues increased 23.9% to $826.9 million for the year ended December 31, 2004, compared to $667.2 million for 2003. This increase is largely attributable to several factors, including: $27.5 million in revenue from the acquisition of operations from ACS in the first and second quarters of 2004; a full-year versus ten months of

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revenue ($10.3 million) from Integrated Data Systems (IDS), which was acquired in early 2003; $31.4 million in revenue as a result of our expansion of the logistical readiness, telecommunications, infrastructure, maintenance, repair and sustainment support provided in military deployed environments with U.S. and allied forces in support of peace-keeping efforts worldwide; $23.8 million in revenue from additional work under contracts that were in existence during the prior year; $11.2 million in revenue as a result of operations related to information technology forensics and intrusion; and $10.0 million in revenue from our contract to support relocation of a U.S. Army Special Operations Command Center. The total increase attributable to the factors described above is $114.2 million. The remaining amount of increase, $45.5 million, is due to increased work from Department of Defense and various intelligence agencies.

Cost of services

Cost of services increased 24.2% to $677.2 million for the year ended December 31, 2004, compared to $545.5 million for 2003. As a percentage of revenues, cost of services increased from 81.8% to 81.9%. Out of the $131.7 million increase in cost of services, over $23.9 million is attributable to cost incurred on operations purchased from ACS during the first and second quarters of 2004.

Direct labor costs, including fringe benefit costs and applicable overhead, increased from $331.8 million to $402.6 million, or 21.4%, due to an increase in personnel, increased salaries and increased benefit costs. For the year ended December 31, 2004, other direct costs increased from $213.7 million to $274.6 million, or 28.5%, over the year ended December 31, 2003. Direct labor costs increased by 20.7% due to an increase in personnel, primarily related to our acquisitions, direct new hires and increased salaries. As a percentage of revenues, other direct costs increased to 33.2% for the year ended December 31, 2004, from 32.0% for the same period in 2003, due to increased pass-through sales.

For the year ended December 31, 2004, other direct costs increased by 28.5% over the twelve months of 2003, from $213.7 million to $274.6 million. This increase was attributable to an increase in pass-through costs in 2004 over 2003, year-to-date results from IDS, and costs incurred on contracts purchased from ACS.

Gross profit

Gross profit increased 23.0% to $149.7 million for the year ended December 31, 2004, compared to $121.8 million for the same period in 2003. The gross profit of our operations remained relatively constant, at 18.1% to 18.2% for the years ended December 31, 2004 and 2003, respectively.

General and administrative

General and administrative expenses increased 21.4% to $76.0 million for the year ended December 31, 2004, compared to $62.6 million for 2003 as a result of additional management personnel and infrastructure to support the growth of our business. In addition, we recorded $0.8 million in costs related to terminating a lease agreement for an idle facility and $0.3 million in costs related to close one of the offices located in the Washington D.C. area. As a percentage of revenues, general and administrative expenses remained relatively constant at 9.2% and 9.4% for the years ended December 31, 2004 and December 31, 2003, respectively.

Depreciation and amortization

Depreciation and amortization expense increased 19.2% to $5.2 million for the year ended December 31, 2004, compared to $4.4 million in 2003. The increase resulted primarily from an additional $0.3 million of amortization of intangible assets established in connection with our recent acquisitions and an additional $0.5 million of depreciation expense from additional fixed assets placed in operation as a result of our operational growth.

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Income from continuing operations

Income from continuing operations increased 25.0% to $68.5 million for the year ended December 31, 2004, compared with $54.8 million for 2003. This increase is aligned with the increase in revenue generated from our operations.

Loss from discontinued operations

Loss from discontinued operations was $17.2 million for the period ended December 31, 2004 verses income of $3.6 million for 2003. Discontinued operations for the period ended December 31, 2004 contained a pre-tax adjustment for a change in estimate for revenue earned of $13.2 million plus a pre-tax estimated contract loss of $4.7 million on our Defense Security Services contract. The results from discontinued operations are primarily due to our MSM subsidiary, as discussed in “Discontinued Operations” below.

Net income

Net income decreased 29.7% to $24.7 million for the year ended December 31, 2004, compared to $35.2 million for 2003, mainly as a result of losses from our discontinued MSM operations. Net income excluding MSM increased 32.7% to $41.9 million for the year ended December 31, 2004 from $31.6 million for the year ended December 31, 2003. Our effective tax rate for year ended December 31, 2004 and 2003 was 38.0% and 40.6%, respectively.

Year Ended December 31, 2004 Compared to the Year Ended December 31, 2003

Revenues

Revenues increased 20.1% to $842.4 million for the year ended December 31, 2004, compared to $701.6 million for 2003. This increase is largely attributable to several factors, including: revenue ($27.5 million) from the acquisition of operations from ACS in the first and second quarters of 2004; a full-year versus ten months revenue ($10.3 million) from Integrated Data Systems (IDS), which was acquired in early 2003; revenue ($31.4 million) as a result of our expansion of the logistical readiness, telecommunications, infrastructure, maintenance, repair and sustainment support provided in military deployed environments with U.S. and allied forces in support of peace-keeping efforts worldwide; revenue ($23.8 million) from additional work under contracts that were in existence during the prior year; revenue ($11.2 million) as a result of operations related to information technology forensics and intrusion; and revenue ($10.0 million) from our contract to support relocation of a U.S. Army Special Operations Command Center. The total increase attributable to the factors described above is $114.2 million. The remaining amount of increase, $45.5 million, is due to increased work from Department of Defense and various intelligence agencies. Offsetting these increases was a $18.9 million decrease in revenue from MSM operations. The increase in revenue from our operations excluding MSM was $159.7 million, which accounted for a 23.9% growth in revenue from 2003 to 2004.

We derived approximately 43.6% of our revenues for the year ended December 31, 2004 from work under GSA schedule contracts, compared with approximately 40.3% for 2003. We derived approximately 13.7% of our revenues for 2004 from contracts in which we acted as a subcontractor, compared with approximately 11.4% for 2003.

Cost of services

Cost of services increased 25.2% to $713.4 million for the year ended December 31, 2004, compared to $569.8 million for 2003. As a percentage of revenues, cost of services increased from 81.2% to 84.7%. The

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increase by 3.5% is primarily due to the $18.9 million decrease in revenues at MSM and an $11.9 million increase in cost of services at MSM, which includes the $4.7 million contract loss recorded in the second quarter of 2004. Excluding MSM, cost of services as a percentage of revenue remained the same at 81.8% for both 2004 and 2003. Out of the $143.7 million increase in cost of services, over $23.9 million is attributable to cost incurred on operations purchased from ACS during the first and second quarters of 2004.

Direct labor costs increased from $306.7 million to $378.2 million, or 23.3%, due to an increase in personnel, increased salaries and increased benefit costs. For the year ended December 31, 2004, other direct costs increased from $229.8 million to $292.9 million, or 27.4%, over the year ended December 31, 2003. Direct labor costs (excluding MSM) increased by 21.0% due to an increase in personnel, primarily related to our acquisitions, direct new hires and increased salaries. As a percentage of revenues, other direct costs increased to 34.8% for the year ended December 31, 2004, from 32.8% for the same period in 2003, due to increased pass-through sales.

For the year ended December 31, 2004, other direct costs (including MSM) increased by 27.4% over the twelve months of 2003, from $229.8 million to $292.9 million. This increase was attributable to an increase in pass-through costs in 2004 over 2003, the $4.7 million contract loss noted above, year-to-date results from IDS, and costs incurred on contracts purchased from ACS. As a percentage of revenues, other direct costs (including MSM) increased to 34.8% for the year ended December 31, 2004, from 32.8% for the same period in 2003.

Gross profit

Gross profit decreased 2.0% to $129.0 million for the year ended December 31, 2004, compared to $131.8 million for the same period in 2003. As a percentage of revenues, gross profit margin decreased to 15.3% for the year ended December 31, 2004, compared to 18.8% earned for the same period in 2003. The decrease in the gross profit margin was primarily the result of the $18.9 million decrease in revenues at MSM and an $11.9 million increase in cost of services, noted above. The gross profit of our operations other than our MSM operations remained relatively constant, at 18.1% to 18.3% for the years ended December 31, 2004 and 2003, respectively.

General and administrative

General and administrative expenses increased 24.6% to $82.6 million for the year ended December 31, 2004, compared to $66.3 million for 2003 as a result of additional management personnel and infrastructure to support the growth of our business. In addition, we recorded $0.8 million in costs related to terminating a lease agreement for an idle facility and $0.3 million in costs related to close one of the offices located in our Washington D.C. area. As a percentage of revenues, general and administrative expenses remain relatively constant at 9.8% and 9.5% for the years ended December 31, 2004 and December 31, 2003, respectively.

Depreciation and amortization

Depreciation and amortization expense increased 19.5% to $5.4 million for the year ended December 31, 2004, compared to $4.6 million in 2003. The increase resulted primarily from an additional $0.3 million of amortization of intangible assets established in connection with our recent acquisitions and an additional $0.5 million of depreciation expense from additional fixed assets placed in operation as a result of our operational growth.

Income from operations

Income from operations decreased 32.8% to $41.0 million for the year ended December 31, 2004, compared with $61.0 million for 2003. The decrease was primarily a result of the losses at MSM, noted above. Income from operations (excluding MSM) increased 25.0% from 2003 to 2004 and this increase is aligned with the increase in revenue generated from our operations other than MSM.

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Income from continuing operations

Income from continuing operations decreased 29.7% to $24.7 million for the year ended December 31, 2004, compared to $35.2 million for 2003, mainly as a result of loss from MSM operations described above. Income from continuing operations excluding MSM increased 32.7% to $42.0 million for the year ended December 31, 2004 from $31.6 million for the year ended December 31, 2003.