Company Quick10K Filing
Quick10K
ManTech International
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-07-31 Earnings, Regulation FD, Other Events, Exhibits
8-K 2019-05-21 Officers, Officers
8-K 2019-05-21 Shareholder Vote
8-K 2019-05-01 Earnings, Regulation FD, Other Events, Exhibits
8-K 2019-03-05 Officers, Exhibits
8-K 2019-02-20 Earnings, Regulation FD, Other Events, Exhibits
8-K 2018-11-01 Earnings, Regulation FD, Other Events, Exhibits
8-K 2018-08-01 Earnings, Regulation FD, Other Events, Exhibits
8-K 2018-05-17 Shareholder Vote
8-K 2018-05-02 Earnings, Regulation FD, Other Events, Exhibits
8-K 2018-03-06 Officers, Exhibits
8-K 2018-03-05 Officers
8-K 2018-02-21 Earnings, Regulation FD, Other Events, Exhibits
HLG Hailiang Education Group 26,067
EDU New Oriental Education & Technology Group 16,850
WTW Weight Watchers 6,262
LOPE Grand Canyon Education 6,080
SFLY Shutterfly 1,738
DL China Distance Education Holdings 577
EVH Evolent Health 548
TISI Team 502
RYB RYB Education 201
HMNY Helios & Matheson Analytics 0
MANT 2019-06-30
Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 mant-6302019xex311.htm
EX-31.2 mant-6302019xex312.htm
EX-32 mant-6302019xex32.htm

ManTech International Earnings 2019-06-30

MANT 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
__________________________________________
FORM 10-Q 
__________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File No. 000-49604 
__________________________________________
ManTech International Corporation
(Exact Name of Registrant as Specified in its Charter) 
__________________________________________
Delaware
 
 
22-1852179
State or Other Jurisdiction of
Incorporation or Organization
 
 
I.R.S. Employer
Identification No.
 
 
 
 
2251 Corporate Park Drive
Herndon
Virginia
20171
Address of Principal Executive Offices
 
 
Zip Code
(703) 218-6000
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 and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post 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 Exchange Act.
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 July 31, 2019 there were 26,804,093 shares outstanding of our Class A common stock and 13,188,045 shares outstanding of our Class B common stock.





MANTECH INTERNATIONAL CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED June 30, 2019
INDEX
 
 
Page No.
 
Item 1.
 
 
Condensed Consolidated Balance Sheets as of June 30, 2019 and December 31, 2018
 
Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2019 and 2018
 
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2019 and 2018
 
Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Six Months Ended June 30, 2019 and 2018
 
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and 2018
 
Notes to Condensed Consolidated Financial Statements
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.
Item 4.
 
Item 1.
Item 1A.
Item 6.


2



PART I – FINANCIAL INFORMATION

Item 1.
Financial Statements

MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share and Per Share Amounts)
 
(unaudited)
 
June 30,
2019
 
December 31,
2018
ASSETS
 
 
 
Cash and cash equivalents
$
5,924

 
$
5,294

Receivables—net
393,062

 
405,378

Prepaid expenses
33,965

 
23,398

Other current assets
4,898

 
5,915

Total Current Assets
437,849

 
439,985

Goodwill
1,166,273

 
1,085,806

Other intangible assets—net
196,626

 
171,962

Operating lease right of use assets
117,113

 

Property and equipment—net
62,401

 
51,427

Employee supplemental savings plan assets
34,754

 
30,501

Investments
11,534

 
11,830

Other assets
13,464

 
12,360

TOTAL ASSETS
$
2,040,014

 
$
1,803,871

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
LIABILITIES
 
 
 
Accounts payable and accrued expenses
$
141,757

 
$
126,066

Accrued salaries and related expenses
94,938

 
89,058

Contract liabilities
43,526

 
28,209

Operating lease liabilities—current
26,717

 

Total Current Liabilities
306,938

 
243,333

Long term debt
43,500

 
7,500

Deferred income taxes
121,743

 
108,956

Operating lease liabilities—long term
101,491

 

Accrued retirement
32,976

 
30,999

Other long-term liabilities
1,524

 
11,889

TOTAL LIABILITIES
608,172

 
402,677

COMMITMENTS AND CONTINGENCIES


 


STOCKHOLDERS' EQUITY
 
 
 
Common stock, Class A—$0.01 par value; 150,000,000 shares authorized; 27,028,291 and 26,817,513 shares issued at June 30, 2019 and December 31, 2018; 26,784,178 and 26,573,400 shares outstanding at June 30, 2019 and December 31, 2018
270

 
268

Common stock, Class B—$0.01 par value; 50,000,000 shares authorized; 13,188,045 and 13,188,045 shares issued and outstanding at June 30, 2019 and December 31, 2018
132

 
132

Additional paid-in capital
513,840

 
506,970

Treasury stock, 244,113 and 244,113 shares at cost at June 30, 2019 and December 31, 2018
(9,158
)
 
(9,158
)
Retained earnings
926,855

 
903,084

Accumulated other comprehensive loss
(97
)
 
(102
)
TOTAL STOCKHOLDERS’ EQUITY
1,431,842

 
1,401,194

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
2,040,014

 
$
1,803,871

See notes to condensed consolidated financial statements.

3



MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
 
(unaudited)
Three months ended
June 30,
 
(unaudited)
Six months ended
June 30,
 
2019
 
2018
 
2019
 
2018
REVENUE
$
537,037

 
$
491,044

 
$
1,038,967

 
$
964,280

Cost of services
459,266

 
421,012

 
890,349

 
824,945

General and administrative expenses
44,474

 
41,703

 
86,789

 
84,585

OPERATING INCOME
33,297

 
28,329

 
61,829

 
54,750

Interest expense
(945
)
 
(657
)
 
(1,429
)
 
(1,391
)
Interest income
121

 
27

 
311

 
42

Other income (expense), net
31

 
58

 
(11
)
 
62

INCOME FROM OPERATIONS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS
32,504

 
27,757

 
60,700

 
53,463

Provision for income taxes
(8,290
)
 
(7,821
)
 
(15,356
)
 
(13,500
)
Equity in earnings (losses) of unconsolidated subsidiaries

 
(21
)
 
(12
)
 
19

NET INCOME
$
24,214

 
$
19,915

 
$
45,332

 
$
39,982

BASIC EARNINGS PER SHARE:
 
 
 
 
 
 
 
Class A common stock
$
0.61

 
$
0.50

 
$
1.14

 
$
1.01

Class B common stock
$
0.61

 
$
0.50

 
$
1.14

 
$
1.01

DILUTED EARNINGS PER SHARE:
 
 
 
 
 
 
 
Class A common stock
$
0.60

 
$
0.50

 
$
1.13

 
$
1.01

Class B common stock
$
0.60

 
$
0.50

 
$
1.13

 
$
1.01


See notes to condensed consolidated financial statements.

4



MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)
 
(unaudited)
Three months ended
June 30,
 
(unaudited)
Six months ended
June 30,
 
2019
 
2018
 
2019
 
2018
NET INCOME
$
24,214

 
$
19,915

 
$
45,332

 
$
39,982

OTHER COMPREHENSIVE INCOME (LOSS):
 
 
 
 
 
 
 
Cumulative-effect adjustment for adoption of Accounting Standards Update 2018-02

 

 
(24
)
 

Translation adjustments, net of tax
(7
)
 
(38
)
 
5

 
(27
)
Total other comprehensive loss
(7
)
 
(38
)
 
(19
)
 
(27
)
COMPREHENSIVE INCOME
$
24,207

 
$
19,877

 
$
45,313

 
$
39,955


See notes to condensed consolidated financial statements.

5



MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands)
 
(unaudited)
Three months ended
June 30,
 
(unaudited)
Six months ended
June 30,
 
2019
 
2018
 
2019
 
2018
Common Stock, Class A
 
 
 
 
 
 
 
At beginning of period
$
269

 
$
266

 
$
268

 
$
263

Stock option exercises

 

 
1

 
2

Stock-based compensation expense
1

 

 
1

 
1

At end of period
270

 
266

 
270

 
266

Common Stock, Class B
 
 
 
 
 
 
 
At beginning of period
132

 
132

 
132

 
132

At end of period
132

 
132

 
132

 
132

Additional Paid-In Capital
 
 
 
 
 
 
 
At beginning of period
508,605

 
496,354

 
506,970

 
492,030

Stock option exercises
3,297

 
828

 
4,978

 
6,822

Payment consideration to tax authority on employees' behalf

 

 
(1,357
)
 
(2,723
)
Stock-based compensation expense
1,938

 
1,188

 
3,249

 
2,241

At end of period
513,840

 
498,370

 
513,840

 
498,370

Treasury Stock, at cost
 
 
 
 
 
 
 
At beginning of period
(9,158
)
 
(9,158
)
 
(9,158
)
 
(9,158
)
At end of period
(9,158
)
 
(9,158
)
 
(9,158
)
 
(9,158
)
Retained Earnings
 
 
 
 
 
 
 
At beginning of period
913,429

 
870,814

 
903,084

 
860,027

Net income
24,214

 
19,915

 
45,332

 
39,982

Dividends
(10,788
)
 
(9,892
)
 
(21,537
)
 
(19,759
)
Cumulative-effect adjustment for adoption of Accounting Standards Update 2018-02

 

 
(24
)
 

Cumulative-effect adjustment for adoption of Accounting Standards Update 2014-09

 

 

 
587

At end of period
926,855

 
880,837

 
926,855

 
880,837

Accumulated Other Comprehensive Loss
 
 
 
 
 
 
 
At beginning of period
(90
)
 
(309
)
 
(102
)
 
(320
)
Translation adjustments, net of tax
(7
)
 
(38
)
 
5

 
(27
)
At end of period
(97
)
 
(347
)
 
(97
)
 
(347
)
Total Stockholders' Equity
$
1,431,842

 
$
1,370,100

 
$
1,431,842

 
$
1,370,100


See notes to condensed consolidated financial statements.


6



MANTECH INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
 
(unaudited)
Six months ended
June 30,
 
2019
 
2018
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
 
 
 
Net income
$
45,332

 
$
39,982

Adjustments to reconcile net income to net cash flow from (used in) operating activities:
 
 
 
Depreciation and amortization
25,630

 
26,733

Noncash lease expense
13,503

 

Deferred income taxes
5,468

 
8,836

Stock-based compensation expense
3,250

 
2,242

Contract loss reserve
(505
)
 

Equity in (earnings) losses of unconsolidated subsidiaries
12

 
(19
)
Change in assets and liabilities—net of effects from acquired businesses:
 
 
 
Receivables—net
30,151

 
(52,584
)
Prepaid expenses
(13,704
)
 
(17,916
)
Other current assets
1,185

 
12,414

Employee supplemental savings plan asset
(4,253
)
 
(482
)
Accounts payable and accrued expenses
11,522

 
4,997

Accrued salaries and related expenses
1,353

 
1,618

Contract liabilities
15,317

 
10,957

Operating lease liabilities
(13,487
)
 

Accrued retirement
1,977

 
(894
)
Other
692

 
(859
)
Net cash flow from operating activities
123,443

 
35,025

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
 
 
 
Acquisition of a business-net of cash acquired
(114,552
)
 

Purchases of property and equipment
(21,946
)
 
(16,422
)
Deferred contract costs
(2,658
)
 
(769
)
Investment in capitalized software for internal use
(1,952
)
 
(2,921
)
Proceeds from equity method investment
283

 

Net cash used in investing activities
(140,825
)
 
(20,112
)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
 
 
 
Borrowing under revolving credit facility
333,000

 
358,000

Repayments under revolving credit facility
(297,000
)
 
(359,500
)
Dividends paid
(21,548
)
 
(19,768
)
Proceeds from exercise of stock options
4,979

 
6,824

Payment consideration to tax authority on employees' behalf
(1,357
)
 
(2,723
)
Principal paid on financing leases
(62
)
 

Net cash flow from (used in) financing activities
18,012

 
(17,167
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
630

 
(2,254
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
5,294

 
9,451

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
5,924

 
$
7,197

SUPPLEMENTAL CASH FLOW INFORMATION
 
 
 
Cash paid for interest
$
1,248

 
$
1,332

Cash paid for income taxes, net of refunds
$
10,323

 
$
(8,120
)
Noncash investing and financing activities:
 
 
 
Operating lease liabilities arising from obtaining right of use assets
$
12,142

 
$

Finance lease liabilities arising from obtaining right of use assets
$
352

 
$

Capital expenditures incurred but not yet paid
$
376

 
$
3,012

See notes to condensed consolidated financial statements.

7



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2019
UNAUDITED

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. In business for more than 50 years, we excel in full-spectrum cyber, data collection & analytics, enterprise information technology (IT), and systems and software engineering 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, 2018, 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.

3.
Revenue from Contracts with Customers

On January 1, 2018, we adopted Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers using the modified retrospective method applied to those contracts that were not substantially complete as of January 1, 2018. ASC 606 outlines a five-step model whereby revenue is recognized as performance obligations within the contract are satisfied. ASC 606 also requires new, expanded disclosures regarding revenue recognition. We recognized the cumulative effect of adopting ASC 606 as an increase to the 2018 opening balance of retained earnings in the amount of $0.8 million, with the impact primarily related to fixed-price contracts.

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. We typically recognize revenue for time and material contracts under the "right to invoice" model.

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 June 30, 2019 and 2018, the aggregate impact of adjustments in contract estimates increased our revenue by $3.5 million and $4.3 million, respectively. For the six months ended June 30, 2019 and 2018, the aggregate impact of adjustments in contract estimates increased our revenue by $5.6 million and $5.8 million, respectively.

8




We have one 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.

The following tables disclose revenue (in thousands) by contract type, customer, prime or subcontractor and geography for the periods presented.
 
Three months ended
June 30,
 
Six months ended
June 30,
2019
 
2018
 
2019
 
2018
Cost-reimbursable
$
371,852

 
$
324,495

 
$
731,617

 
$
633,542

Fixed-price
108,028

 
116,762

 
203,091

 
232,933

Time-and-materials
57,157

 
49,787

 
104,259

 
97,805

Revenue
$
537,037

 
$
491,044

 
$
1,038,967

 
$
964,280



 
Three months ended
June 30,
 
Six months ended
June 30,
2019
 
2018
 
2019
 
2018
Department of Defense and intelligence agencies
$
408,527

 
$
356,953

 
$
798,356

 
$
690,867

Federal civilian agencies
116,449

 
121,991

 
217,637

 
250,224

State agencies, international agencies and commercial entities
12,061

 
12,100

 
22,974

 
23,189

Revenue
$
537,037

 
$
491,044

 
$
1,038,967

 
$
964,280



 
Three months ended
June 30,
 
Six months ended
June 30,
2019
 
2018
 
2019
 
2018
Prime contractor
$
477,986

 
$
433,791

 
$
924,505

 
$
856,024

Subcontractor
59,051

 
57,253

 
114,462

 
108,256

Revenue
$
537,037

 
$
491,044

 
$
1,038,967

 
$
964,280



 
Three months ended
June 30,
 
Six months ended
June 30,
2019
 
2018
 
2019
 
2018
U.S.
$
529,782

 
$
483,170

 
$
1,024,442

 
$
949,195

International
7,255

 
7,874

 
14,525

 
15,085

Revenue
$
537,037

 
$
491,044

 
$
1,038,967

 
$
964,280



The following table discloses contract receivables (in thousands):
 
June 30, 2019
 
December 31, 2018
Billed receivables
$
316,960

 
$
301,716

Unbilled receivables
82,540

 
109,895

Allowance for doubtful accounts
(6,438
)
 
(6,233
)
Receivables—net
$
393,062

 
$
405,378



Receivables at June 30, 2019 are expected to be substantially collected within one year except for approximately $1.2 million, of which 100% is related to receivables from sales to the U.S. government or from contracts in which we acted as a subcontractor to other contractors selling to the U.S. government. We have one contract which accounts for 11% of our accounts receivable

9



balance. 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.

The following table discloses contract liabilities (in thousands):
 
June 30, 2019
 
December 31, 2018
Contract liabilities
$
43,526

 
$
28,209



For the three months ended June 30, 2019, the amount of revenue that was included in the opening contract liabilities balance was $4.5 million. For the six months ended June 30, 2019, the amount of revenue that was included in the opening contract liabilities balance was $22.5 million.

The remaining performance obligation as of June 30, 2019 is $2.7 billion. The following table discloses when we expect to recognize the remaining performance obligation as revenue (in billions):
For the remaining six months ending December 31, 2019
 
For the year ending
 
 
 
December 31, 2020
 
December 31, 2021
 
Thereafter
$
1.0

 
$
1.2

 
$
0.3

 
$
0.2



4.
Leases

The Financial Accounting Standards Board (FASB) issued ASC 842, Leases, to increase transparency and comparability among organizations by requiring the recognition of right of use (ROU) assets and lease liabilities on the balance sheet. Most prominent among the changes in ASC 842 is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. We are also required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available.

We elected to adopt ASC 842 on January 1, 2019, resulting in us recording operating lease liabilities of $129.6 million and operating lease right of use assets of $118.7 million. We elected the practical expedient to recognize the lease payments related to short-term leases as profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments are incurred. We also elected the following transition related practical expedients: not to reassess whether expired or existing contracts are or contain leases, not to reassess lease classification as determined under ASC 840 and not to reassess initial direct costs from any existing lease. We elected the practical expedient as an accounting election not to separate nonlease components from lease components on all classes of underlying assets. Our leases include nonlease components such as common area maintenance (CAM), utilities and operating expenses. Additionally, we implemented internal controls and key system functionality to enable the preparation of financial information upon adoption. ASC 842 had a material impact on our condensed consolidated balance sheet, but did not have an impact on our condensed consolidated income statement. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged.

We determine if a contract is or contains a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of identified property or equipment (an identified asset) for a period of time in exchange for consideration. We have the right to control the use of the identified asset when we have both of the following: the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. In making this determination, we consider all relevant facts and circumstances. We reassess whether a contract is or contains a lease only if the terms and conditions of the contract are changed. We account for lease components and nonlease components associated with a lease as a single lease component. Operating leases are included in Operating lease ROU assets, Operating lease liabilities—current and Operating lease liabilities—long term on our condensed consolidated balance sheets. Finance leases are included in Property and equipment—net, Accounts payable and other accrued expenses and Other long-term liabilities on our condensed consolidated balance sheets.

Our ROU asset is recognized as the lease liability, any initial indirect costs and any prepaid lease payments, less any lease incentives. Our lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Our lease payments consist of amounts relating to the use of the underlying asset during the lease

10



term, specifically fixed payments, payment to be made in optional periods when we are reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease and the amounts probable of being owned by us under residual guarantees. Our variable lease payments are excluded in measuring ROU assets and lease liabilities because they do not depend on an index or a rate or are not in substance fixed payments. We exclude lease incentives and initial direct costs incurred from our lease payments. Our leases typically do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments.

For operating leases, after lease commencement, we measure our lease liability for each period at the present value of any remaining lease payments, discounted by using the rate determined at lease commencement. In our condensed consolidated statement of income, we recognize a single operating lease expense calculated on a straight-line basis over the remaining lease term. The depreciation of the ROU asset increases each year as a result of the declining lease liability balance. Variable lease payments are not recognized in the measurement of the lease liability - they are recognized in the period in which the related obligation has been incurred.

For finance leases, after lease commencement, we measure our lease liability by using the effective interest rate method. In each period, the lease liability will be increased to reflect the interest that is accrued on the related lease liability by using the appropriate discount rate, offset by a decrease in the lease liability resulting from the periodic lease payments. We recognize the ROU asset at cost, reduced by any accumulated depreciation. The ROU asset is depreciated on a straight-line basis. Together, the interest expense and depreciation expense result in a front-loaded expense profile. We will present interest expense and depreciation expense separately on our condensed consolidated statement of income.

We have operating and finance leases for real estate, transportation vehicles and equipment. Our variable lease payments do not depend on an index or a rate or are not in substance fixed payments. Our leases have remaining lease terms of 0.2 years to 11 years, some of which include options to extend the leases for up to 14 years, and some of which include options to terminate the leases within 1 year. Our transportation vehicles and equipment leases include a residual value guarantee, which is a guarantee made to the lessor that the value of the underlying asset returned to the lessor at the end of the lease will be at least a specific amount. We sublease some of our real estate lease space, resulting in sublease income of $6 thousand and $29 thousand as of the three and six months ended June 30, 2019, respectively. We do not have any leases that have not yet commenced due to construction or design of the underlying asset. We recognize payments related to short-term leases (less than one year) as profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments were incurred. As such, our short-term lease expense for the three and six months ended June 30, 2019 was $1.4 million and $2.8 million, respectively. For the three and six months ended June 30, 2019, we incurred variable lease costs of $0.9 million and $1.4 million, respectively.

The balance sheet information related to our leases was as follows (dollars in thousands):
 
June 30, 2019
Operating Leases
 
Operating lease right of use assets
$
117,113

 
 
Operating lease liabilities—current
$
26,717

Operating lease liabilities—long term
101,491

        Total operating lease liabilities
$
128,208

Finance Leases
 
Property and equipment—gross
$
610

Accumulated depreciation
(149
)
        Property and equipment—net
$
461

 
 
Accounts payable and other accrued expenses
$
133

Other long-term liabilities
331

       Total finance lease liabilities
$
464




11



The components of lease expense were as follows (in thousands):
 
Three months ended
June 30, 2019
 
Six months ended
June 30, 2019
Operating lease expenses
$
8,526

 
$
16,315

 
 
 
 
Depreciation of right of use assets
$
39

 
$
149

Interest on lease liabilities
5

 
14

Finance lease expenses
$
44

 
$
163



The weighted average information related to leases was as follows:
 
June 30, 2019
Weighted Average Remaining Lease Term
 
    Operating leases
5 years

    Finance leases
4 years

Weighted Average Discount Rate
 
    Operating leases
4
%
    Finance leases
5
%


Future minimum lease payments under non-cancellable leases as of June 30, 2019 were as follows (in thousands):
 
Operating Leases
 
Financing Leases
For the six months ended December 31, 2019
$
14,238

 
$
29

2020
32,456

 
176

2021
29,633

 
156

2022
25,978

 
150

2023
21,832

 
43

Thereafter
16,658

 

    Total future minimum lease payments
140,795

 
554

Less imputed interest
(12,587
)
 
(90
)
    Total
$
128,208

 
$
464



5.
Acquisitions

Kforce Government Solutions (KGS)—On April 1, 2019, we completed the acquisition of KGS. KGS was a wholly owned subsidiary of the publicly traded commercial technology and staffing company KForce, Inc. The results of KGS's operations have been included in our consolidated financial statements since that date. The acquisition was completed through an equity purchase agreement dated February 28, 2019, by and among Kforce Government Solutions, Inc and other beneficiaries and ManTech International Corporation. We funded the acquisition with cash on hand and borrowings on our revolving credit facility. KGS provides services IT solutions, transformation and management consulting and data analytics - most notably in the healthcare IT market. This acquisition will expand our presence with important customers such as the Department of Veteran Affairs (VA).

For the six months ended June 30, 2019, we incurred approximately $1.0 million of acquisition costs related to the KGS transaction, which are included in general and administrative expenses in our condensed consolidated statement of income.

The purchase price of $114.6 million, which includes the finalized working capital adjustment, was preliminarily allocated to the underlying assets and liabilities based on their estimated fair value at the date of acquisition. As we are still in the process of reviewing the fair value of the assets acquired and liabilities assumed, the purchase price allocation for KGS is not complete as of June 30, 2019. Recognition of goodwill is largely attributed to the value paid for KGS's capabilities to support customers in IT solutions, transformation and management consulting and data analytics. A majority of the goodwill recorded will not be deductible for tax purposes.

12




In preliminarily allocating the purchase price, we considered, among other factors, analysis of historical financial performance and estimates of future performance of KGS's contracts. The components of other intangible assets associated with the acquisition were customer relationships and backlog valued at $33.1 million and $1.6 million, respectively. Customer contracts and related relationships represent the underlying relationships and agreements with KGS'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 straight-line over its estimated useful life of 1 year. The weighted-average amortization period for the intangible assets is 19 years.

The following table represents the preliminary purchase price allocation for KGS (in thousands):
Receivables
$
17,835

Prepaid expenses
368

Other current assets
168

Goodwill
80,467

Other intangible assets
34,839

Property and equipment
361

Accounts payable and accrued expenses
(6,979
)
Accrued salaries and related expenses
(4,527
)
Deferred income taxes
(7,319
)
Other long-term liabilities
(661
)
Net assets acquired and liabilities assumed
$
114,552



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 six months ended June 30, 2019 and 2018, we declared and paid quarterly dividends in the amount of $0.27 per share and $0.25 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.


13



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): 
 
Three months ended
June 30,
 
Six months ended
June 30,
 
2019
 
2018
 
2019
 
2018
Distributed earnings
$
10,788

 
$
9,892

 
$
21,537

 
$
19,759

Undistributed earnings
13,426

 
10,023

 
23,795

 
20,223

Net income
$
24,214

 
$
19,915

 
$
45,332

 
$
39,982

 
 
 
 
 
 
 
 
Class A common stock:
 
 
 
 
 
 
 
Basic net income available to common stockholders
$
16,210

 
$
13,270

 
$
30,324

 
$
26,604

Basic weighted average common shares outstanding
26,707

 
26,339

 
26,646

 
26,228

Basic earnings per share
$
0.61

 
$
0.50

 
$
1.14

 
$
1.01

 
 
 
 
 
 
 
 
Diluted net income available to common stockholders
$
16,255

 
$
13,318

 
$
30,411

 
$
26,721

Effect of potential exercise of stock options
229

 
288

 
232

 
349

Diluted weighted average common shares outstanding
26,936

 
26,627

 
26,878

 
26,577

Diluted earnings per share
$
0.60

 
$
0.50

 
$
1.13

 
$
1.01

 
 
 
 
 
 
 
 
Class B common stock:
 
 
 
 
 
 
 
Basic net income available to common stockholders
$
8,004

 
$
6,645

 
$
15,008

 
$
13,378

Basic weighted average common shares outstanding
13,188

 
13,189

 
13,188

 
13,189

Basic earnings per share
$
0.61

 
$
0.50

 
$
1.14

 
$
1.01

 
 
 
 
 
 
 
 
Diluted net income available to common stockholders
$
7,959

 
$
6,597

 
$
14,921

 
$
13,261

Diluted weighted average common shares outstanding
13,188

 
13,189

 
13,188

 
13,189

Diluted earnings per share
$
0.60

 
$
0.50

 
$
1.13

 
$
1.01



For the three months ended June 30, 2019 and 2018, options to purchase 479,685 shares and 251,250 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 six months ended June 30, 2019 and 2018, options to purchase 496,859 shares and 280,833 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 six months ended June 30, 2019 and 2018, there were 144,585 shares and 229,191 shares, respectively, issued from the exercise of stock options. For the six months ended June 30, 2019 and 2018 there were 72,493 shares and 86,233 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):
 
June 30,
2019
 
December 31,
2018
Furniture and equipment
$
118,112

 
$
97,577

Leasehold improvements
44,051

 
43,065

Finance leases
610

 

Property and equipment—gross
162,773

 
140,642

Accumulated depreciation and amortization
(100,372
)
 
(89,215
)
Property and equipment—net
$
62,401

 
$
51,427




14



Depreciation and amortization expense related to property and equipment for the three months ended June 30, 2019 and 2018 was $6.2 million and $6.8 million, respectively. Depreciation and amortization expense related to property and equipment for the six months ended June 30, 2019 and 2018 was $12.5 million and $12.7 million, respectively.

8.
Goodwill and Other Intangible Assets

The change in the carrying amount of goodwill during the year ended December 31, 2018 and six months ended June 30, 2019 are as follows (in thousands):
 
Goodwill Balance
Goodwill at December 31, 2017
$
1,084,560

Acquisition fair value adjustment
1,246

Goodwill at December 31, 2018
1,085,806

Acquisitions
80,467

Goodwill at June 30, 2019
$
1,166,273



Other intangible assets consisted of the following (in thousands):
 
June 30, 2019
 
December 31, 2018
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Other intangible assets:
 
 
 
 
 
 
 
 
 
 
 
Contract and program intangible assets
$
390,632

 
$
211,030

 
$
179,602

 
$
355,932

 
$
201,298

 
$
154,634

Capitalized software cost for internal use
52,491

 
35,467

 
17,024

 
50,925

 
33,597

 
17,328

Total other intangible assets—net
$
443,123

 
$
246,497

 
$
196,626

 
$
406,857

 
$
234,895

 
$
171,962



Amortization expense relating to intangible assets for the three months ended June 30, 2019 and 2018 was $6.1 million and $6.4 million, respectively. Amortization expense relating to intangible assets for the six months ended June 30, 2019 and 2018 was $11.9 million and $13.5 million, respectively. We estimate that we will have the following amortization expense for the future periods indicated below (in thousands):
For the remaining six months ending December 31, 2019
$
12,318

For the year ending:
 
December 31, 2020
$
23,676

December 31, 2021
$
21,235

December 31, 2022
$
18,878

December 31, 2023
$
15,908

December 31, 2024
$
14,461



9.
Debt

Revolving Credit Facility—We maintain a credit facility with a syndicate of lenders led by Bank of America, N.A, as sole administrative agent. The credit agreement provides for a $500 million revolving credit facility, with a $75 million letter of credit sublimit and a $30 million swing line loan sublimit. The credit agreement also includes an accordion feature that permits us to arrange with the lenders for the provision of additional commitments. The maturity date is August 17, 2022.

Borrowings under our credit agreement are collateralized by substantially all of our assets and those of our Material Subsidiaries (as defined in the credit agreement) 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 2.25% based on our consolidated total leverage ratio) or Bank of America's base rate plus market spreads (0.25% to 1.25% based on our consolidated total leverage ratio).


15



The terms of the credit agreement permit prepayment and termination of the loan commitments at any time, subject to certain conditions. The credit agreement requires us to comply with specified financial covenants, including the maintenance of certain leverage ratios and a certain consolidated coverage ratio. The 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 six months ended June 30, 2019 and 2018, we were in compliance with the financial covenants under the credit agreement.

There was $43.5 million and $7.5 million outstanding on our revolving credit facility at June 30, 2019 and December 31, 2018, respectively. The maximum available borrowing under the revolving credit facility at June 30, 2019 was $448.8 million. As of June 30, 2019, we were contingently liable under letters of credit totaling $7.7 million, which reduces our availability to borrow under our revolving credit facility.

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 our incurred cost audits through 2016 with no material adjustments. The remaining audits for 2017 through 2018 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. Except for the matter noted below, current legal matters are individually immaterial and we believe that the ultimate resolution of these items will not have a material effect on our financial position, results of operations or cash flows. Management believes it has adequately reserved for any losses that may be experienced from legal proceedings, claims and disputes and pending litigations of which it is aware.

An officer of our Company is a party to a pending arbitration proceeding with a former employer that relates to certain breach of a contract claim.  Pursuant to indemnification arrangements we have with this officer, we may be exposed to a potential loss related to this claim.  Pursuant to applicable accounting standards, we have determined that it is reasonably possible that an unfavorable outcome could cause us to incur a liability/loss under these indemnification arrangements. However, given the nature of the claim, the limitations on information and other factual details relating to the claim that are available to us at this time, and management’s intent to contest the matter vigorously, we are unable to make a reasonable estimate of loss at this time.  As such, we have not disclosed an amount of potential loss as of June 30, 2019.

We have $7.7 million outstanding on our letter of credit, of which $7.6 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.
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). 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, 2019, there were 596,422 additional shares made available for issuance under the Plan. Through June 30, 2019, the Board of Directors has authorized the issuance of up to 15,148,321 shares under this Plan. Through June 30, 2019, the remaining aggregate number of shares of our common stock available for future grants under the Plan was 6,707,684. 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.


16



Stock Compensation Expense—For the three months ended June 30, 2019 and 2018, we recorded $1.9 million and $1.1 million of stock-based compensation expense. For the six months ended June 30, 2019 and 2018, we recorded $3.2 million and $2.2 million 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 June 30, 2019 and 2018, we recorded $(0.5) million and $(0.2) million, respectively, to income tax expense (benefit) related to the exercise of stock options, vested cancellations and the vesting of restricted stock and restricted stock units. For the six months ended June 30, 2019 and 2018, we recorded $(0.7) million and $(1.7) million, respectively, to income tax expense (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. 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 typically issue options that vest over three years in equal installments beginning on the first anniversary of the date of grant. Under the terms of the Plan, the contractual life of the option grants may not exceed eight years. During the six months ended June 30, 2019 and 2018, we issued options that expire five years from the date of grant.

Fair Value Determination—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.

The following weighted-average assumptions were used for option grants during the six months ended June 30, 2019 and 2018:

Volatility—The expected volatility of the options granted was estimated based upon historical volatility of our share price through weekly observations of our trading history.

Expected life of options—The expected life of options granted to employees was determined from historical exercises of the grantee population. The options had graded vesting over three years in equal installments beginning on the first anniversary of the date of grant and a contractual term of five years.

Risk-free interest rate—The yield on zero-coupon U.S. Treasury strips was used to extrapolate a forward-yield curve. This “term structure” of future interest rates was then input into a numeric model to provide the equivalent risk-free rate to be used in the Black-Scholes-Merton model based on the expected term of the underlying grants.

Dividend Yield—The Black-Scholes-Merton valuation model requires an expected dividend yield as an input. We have calculated our expected dividend yield based on an expected annual cash dividend of $1.08 per share.

The following table summarizes weighted-average assumptions used in our calculations of fair value for the six months ended June 30, 2019 and 2018:
 
Six months ended
June 30,
 
2019
 
2018
Volatility
27.00
%
 
26.34
%
Expected life of options
3 years

 
3 years

Risk-free interest rate
2.39
%
 
2.46
%
Dividend yield
2.00
%
 
2.00
%


Stock Option Activity—The weighted-average fair value of options granted during the six months ended June 30, 2019 and 2018, as determined under the Black-Scholes-Merton valuation model, was $10.07 and $9.96, respectively. Option grants that vested during the six months ended June 30, 2019 and 2018 had a combined fair value of $1.2 million and $0.7 million, respectively.


17



The following table summarizes stock option activity for the year ended December 31, 2018 and the six months ended June 30, 2019:
 
Number of Shares
 
Weighted Average Exercise Price
 
Aggregate Intrinsic Value
(in thousands)
 
Weighted Average Remaining Contractual Life
Stock options outstanding at December 31, 2017
1,169,408

 
$
35.88

 
$
16,731

 
 
Granted
466,828

 
$
54.87

 
 
 
 
Exercised
(420,524
)
 
$
30.05

 
$
12,411

 
 
Cancelled and expired
(122,312
)
 
$
43.85

 
 
 
 
Stock options outstanding at December 31, 2018
1,093,400

 
$
45.34

 
$
8,776

 
 
Granted
253,006

 
$
53.63

 
 
 
 
Exercised
(144,585
)
 
$
36.36

 
$
3,299

 
 
Cancelled and expired
(70,834
)
 
$
50.61

 
 
 
 
Stock options outstanding at June 30, 2019
1,130,987

 
$
48.02

 
$
20,171

 
3 years
 
 
 
 
 
 
 
 
Stock options exercisable at June 30, 2019
330,327

 
$
39.06

 
$
8,851

 
2 years


The following table summarizes non-vested stock options for the six months ended June 30, 2019:
 
Number of Shares
 
Weighted Average Fair Value
Non-vested stock options at December 31, 2018
774,402

 
$
8.77

Granted