"In fiscal year 2012, ManTech demonstrated its market-leading position with a record $4.8 billion in bookings, producing record year-end levels of total and funded backlog", stated ManTech Chairman and Chief Executive Officer George J. Pedersen. "We also entered new markets of health care and commercial cyber that will drive our next phase of growth. Our intelligence and cyber business demonstrated strong growth. We experienced reduced demand for subcontractors and materials across portions of our defense business. Given the appropriations impasse, we preserved cash in 2012, leaving us well positioned for strategic actions in 2013. With our strong balance sheet and future cash flows, we expect to be more acquisitive this year as national priorities clarify and we continue to build out our recent investment areas."
Revenues for the quarter were $621.8 million, compared to $681.8 million in the fourth quarter of fiscal year 2011. Revenues for the year were $2.58 billion, compared to $2.87 billion in fiscal year 2011. Revenues in strategic investment areas, including intelligence, cyber security and health care, increased in the quarter and the year compared to the comparable period for 2011. Significant deliveries of Cloud computing infrastructure systems that were expected in the fourth quarter were moved to the first quarter of 2013. Quarterly and annual revenues declined as a result of fewer other direct costs (ODCs) on the S-3 contract with the U.S. Army Communications and Electronics Command (CECOM). For the year, revenues on the contract were $610 million, compared to $928 million in fiscal year 2011.
Operating income was $37.7 million for the quarter and $171.0 million for the full year. Operating margin of 6.1 percent for the quarter reflected continued investment in new market areas as well as transition costs on the new Mine Resistant Ambush Protected (MRAP) Contractor Logistics Sustainment and Support (CLSS) Services contract. Net income was $20.2 million for the quarter and $95.0 million for the full year. Diluted earnings per share were $0.55 for the quarter and $2.57 for the full year. Quarterly and annual profits were impacted by the migration of time-and-material contracts to cost-plus contracts and increased price competition on in-theater mission support.
The company used $62 million of net cash flow to fund operating activities in the quarter. For fiscal year 2012, cash flow from operations was $126 million or 1.3 times net income. Days sales outstanding (DSO) increased to 79 days, in part driven by the one-time set up of billing arrangements for the $2.85 billion CLSS contract.
During 2012, the company invested $63 million to acquire businesses that provide entry positions in the health care and commercial cyber markets. During the quarter the company paid $7.8 million, or $0.21 per share, to its common stockholders of record as of December 7, 2012, for a total of $31 million, or $0.84 per share, for the year. As of December 31, 2012, the company had $135 million in cash and cash equivalents, up from $114 million at the end of fiscal year 2011. The company has $200 million in debt with no borrowings on its $500 million revolving-credit facility.
After the close of the quarter, the company acquired ALTA Systems Inc., a health care Information Technology (IT) and professional services company, for $10 million in cash. The acquisition will enable ManTech to deliver technology services through ALTA's prime position on the Centers for Medicare and Medicaid Services (CMS) Enterprise Systems Development (ESD) contract, an Indefinite Delivery/Indefinite Quantity (ID/IQ) contract vehicle with a $4 billion ceiling and period of performance through May 2018. With the acquisitions of Evolvent and ALTA, ManTech is well positioned to help government programmes and health care providers meet their responsibilities to provide efficient and comprehensive health care.
The Board of Directors has declared a cash dividend of $0.21 per share, which will be paid on March 22, 2013 to all common stockholders of record as of March 8, 2013. ManTech anticipates paying equivalent quarterly dividends near the end of each fiscal quarter. Based on the current number of outstanding shares, the anticipated total dividend for 2013 of $0.84 per share of common stock implies a payout of $31 million. The annual yield is approximately 3.2 percent based on the closing price on February 19, 2013. Future declarations of quarterly dividends and their record and payment dates are subject to the final determination of ManTech's Board of Directors.
Contract awards (bookings) totaled $222 million in the fourth quarter, representing a book-to-bill ratio of 0.4. For the year contract awards totaled a record $4.8 billion for a book-to-bill ratio of 1.9. Large awards contributing to the quarterly bookings include:
ManTech is a member of the Lockheed Martin team that was awarded the $4.6 billion DISA GSM-O contract, which provides programmatic, operations, and engineering services to support the lifecycle management of the Department of Defense's global data network, the Global Information Grid (GIG). ManTech will lead GSM-O operations in Europe, the Middle East, and Southwest Asia, providing GIG operations, administration, and maintenance; net assurance operations; operations support for the Defense Message System backbone; and integrated operations support services, including a unified service desk, technology convergence, and process re-engineering.
ManTech is a principal subcontractor to IBM on its contract to provide logistics IT services to the U.S. Army LOGSA. The team will provide LOGSA with a comprehensive computing infrastructure to facilitate cost effective management of a full range of IT support services, including a complex data centre environment, software development, database management and analysis, application integration, network management, user support, training, and security.
Under a three-year, $72 million contract, ManTech will continue to support the Warfare Analysis and Integration Department of the Naval Air Systems Command. Under the contract ManTech will provide warfare analysis, modelling and simulation, software development, and analytic programme support for naval and joint warfighting capability assessments. ManTech will also provide technical support services required to operate the Naval Aviation Enterprise Warfare Analysis Environment, which provides state-of-the-art modelling and simulation laboratories in which analyses are performed to simulate naval warfare at the engineering, engagement, mission, and campaign levels.
With the large volume of awards for the year, the companys backlog of business at the end of year was a healthy $6.5 billion, of which a record $1.8 billion was funded. Compared to fiscal year 2011, total backlog increased 38 percent and funded backlog increased 34 percent.
ManTech enters fiscal year 2013 with record funded backlog and a strong pipeline of new opportunities.
ManTech Chief Financial Officer Kevin M. Phillips stated: "Customer uncertainty significantly impacted our results for the fourth quarter and full fiscal 2012. Under most scenarios, we expect top-line growth next year based on momentum on current programmes. For example, we have already delivered systems in the first quarter on our AMBIANCE programme that exceed the total revenue on the programme in 2012, and we have added more than 500 employees on our CLSS programme over the past four months. Our capital deployment programme will continue to balance our acquisitions to reposition the business for long-term growth with our return of capital to long-term shareholders."