Deltek Reports Q2 License Revenue of $15.8 Million, Total Revenue of $69.4 Million

License Revenue Increases 40%, Net Income Increases 85% from Prior Quarter
HERNDON, Va.--(Business Wire)--
Deltek, Inc. (Nasdaq: PROJ), the leading provider of enterprise applications
software for project-focused businesses, today announced financial results for
its second quarter ended June 30, 2009.

Total revenue for Q2 was $69.4 million, an increase of 12% from Q1. Q2 license
revenue increased 40% from Q1 to $15.8 million. Maintenance and support revenue
in Q2 was $31.0 million, an increase of 1% from Q1. Consulting services revenue
decreased 4% from Q1 to $19.2 million. Other revenues in Q2 increased to $3.4
million from $0.1 million in Q1.

Q2 GAAP net income increased 85% to $4.9 million, or $0.09 per diluted share,
from $2.7 million, or $0.06 per diluted share, in Q1. Q2 non-GAAP net income
increased 35% to $7.6 million, or $0.14 per diluted share, from $5.6 million, or
$0.13 per diluted share, in Q1.

Excluding the additional shares issued in conjunction with the Company`s common
stock rights offering, Deltek`s Q2 2009 non-GAAP and GAAP EPS would have been
$0.17 and $0.11, respectively.

"We had a strong quarter and delivered financial results that significantly
exceeded expectations," said Kevin Parker, president and CEO of Deltek. "Our
revenue and profitability were driven by improved execution across multiple
facets of our business, a continuing focus on operational efficiency and cost
reductions, and our customers` increasing confidence in their future business
prospects."

"We remain focused on executing effectively and committed to delivering a strong
bottom line and healthy cash flows. Looking forward, our sales pipeline
continues to be strong and the numerous new products we`ve launched this year
are being well received by our customers. Our strong competitive position
provides a solid foundation for growth when the economy eventually recovers."

When compared to prior year results, total revenue in Q2 was $69.4 million,
compared to $77.4 million last year. License revenue for Q2 was $15.8 million,
compared to $22.1 million in Q2 2008. Maintenance and support revenue in the
second quarter was $31.0 million, an increase from $28.3 million in Q2 2008.
Consulting services revenue for Q2 was $19.2 million, compared to $22.3 million
in the prior year. Other revenues in Q2 were $3.4 million, compared to $4.6
million in the prior year.

GAAP net income for the second quarter was $4.9 million, or $0.09 per diluted
share, compared to $5.4 million, or $0.11 per diluted share, last year. Non-GAAP
net income for the second quarter of 2009 was $7.6 million, or $0.14 per diluted
share, compared to $7.5 million, or $0.16 per diluted share, in Q2 2008.

Non-GAAP net income excludes the net-of-tax impact of stock-based compensation,
expenses associated with the Company`s 2005 recapitalization, amortization of
acquired intangible assets and restructuring charges.

Q2 Highlights

* Deltek announced that its common stock rights offering was fully subscribed by
its stockholders, including its largest stockholders, affiliates of New Mountain
Capital. Upon completion of the rights offering, the Company issued 20,000,000
new shares of common stock at a price of $3.00 per share. Deltek used $3.1
million of the $58.2 million in net proceeds from the rights offering to repay
indebtedness. Deltek ended Q2 with a cash balance of $113.5 million, compared to
$43.0 million in Q1 2009. The $70.5 million increase in cash was driven by
proceeds received from the Company`s common stock rights offering and cash flow
generated from operations.
* Deltek announced the release of Premier Analytics, a new business intelligence
solution for GCS Premier customers. Premier Analytics delivers executive
dashboards that empower executives to monitor, measure, and manage their
businesses using real-time data from GCS Premier, Deltek`s powerful project
accounting solution for small-to-mid-size government contractors. Deltek also
announced the release of GovWin 6.0, the newest version of its industry-leading
business development and capture solution for firms who want to do more business
with the Federal Government. GovWin 6.0 contains numerous usability enhancements
that improve collaboration and communication throughout the business development
process. The new release also offers unique Contract Data Management
capabilities that enable companies to manage opportunities throughout the entire
contract management lifecycle.
* Deltek announced the release of Cobra 5.0, the leading enterprise cost and
earned value management (EVM) solution for government contractors and other
project-based businesses. As the industry`s first EVM solution built on
Microsoft`s .NET framework and Smart Client architecture, Cobra 5.0 eases the
burden on IT resources with one-click deployment, and it eliminates the need for
Citrix resulting in lower TCO. By delivering tight control over project costs,
insight into mission-critical project data and the ability to easily calculate
and report on earned value, Cobra 5.0 helps organizations better manage project
and program performance.
* Deltek announced the release of Vision 6.0, the newest version of its
industry-leading solution for professional services firms of all sizes. Vision
6.0 enables customers to fully unlock, analyze, and act on the essential data
elements within Vision through role-based dashboards and SQL reporting services.
In addition, Vision 6.0 offers capabilities to manage the global enterprise,
including enhancements that simplify international accounting and tax
transactions and foreign language support. In conjunction with Vision 6.0,
Deltek also announced the release of Deltek Project Connect and Vision
Performance Management. Project Connect facilitates bi-directional integration
between Vision Resource Planning and Microsoft Project to keep resources and
schedules in synch. Vision Performance Management dashboards empower
organizations to proactively manage performance and mitigate risk.
* Deltek held its annual Insight customer conference in Orlando, Florida.
Insight 2009 featured approximately 3,000 business leaders and partner attendees
representing thousands of unique organizations. The conference showcased major
product announcements across all of Deltek`s product lines, multiple channel and
technology partners, and the winners of the Second Annual Deltek Project
Excellence Awards, which recognize customers that achieve superior business
performance through their use of Deltek products.

Impact of Common Stock Rights Offering on Historical Shares Outstanding

In accordance with SFAS 128-Earnings Per Share, for purposes of computing the
basic and diluted weighted average shares, results for both 2009 and 2008 have
been adjusted prior to June 1, 2009 to reflect the bonus element associated with
the Company`s recently completed common stock rights offering. A summary of
these retroactive changes is available on the Investor Relations section of
Deltek`s website.

Conference Call Information

Deltek will host a conference call at 5:00 p.m. Eastern Time today to discuss
the Company`s second quarter results. To access this call, dial 1-877-381-6419
in North America and 1-706-643-9496 outside North America. No password is
required to join the call. The conference call also can be accessed through the
Investor Relations section of Deltek`s website (http://investor.deltek.com).
Those unable to participate in the live call may hear a replay through August 5,
2009 by dialing 1-800-642-1687 in North America and 1-706-645-9291 outside North
America (pass code: 19459768). The replay also will be available through August
5, 2009 on Deltek`s website.

About Deltek

Deltek (Nasdaq: PROJ) is the leading provider of enterprise applications
software designed specifically for project-focused businesses. For more than two
decades, our software applications have enabled organizations to automate
mission-critical business processes around the engagement, execution and
delivery of projects. More than 12,000 customers worldwide rely on Deltek to
measure business results, optimize performance, streamline operations and win
new business. For more information, visit www.deltek.com.

Use of Non-GAAP Financial Measures

This press release and the related conference call described above contain
certain non-GAAP financial measures, including non-GAAP net income, non-GAAP
operating income and margin and adjusted EBITDA.

The Company defines non-GAAP net income as GAAP net income before the net-of-tax
impact of stock-based compensation, expenses associated with the Company`s 2005
recapitalization, amortization of acquired intangible assets and restructuring
charges. Non-GAAP operating income and margin is defined as GAAP operating
income before the pre-tax impact of stock-based compensation, expenses
associated with the Company`s 2005 recapitalization, amortization of acquired
intangible assets and restructuring charges. Adjusted EBITDA is defined as GAAP
net income before interest expenses (net of interest income), provision for
income taxes, depreciation, amortization, stock-based compensation, expenses
associated with the Company`s 2005 recapitalization and restructuring charges.

The Company believes that the presentation of these non-GAAP financial measures
provides useful information to its investors and lenders because these measures
allow for more accurate comparisons of operating results from period-to-period,
enhance the overall understanding of the Company`s financial performance and
provide greater insight into the prospects for the Company`s ongoing business
operations. Moreover, the Company also believes it is appropriate to exclude
costs associated with restructuring charges because these charges are excluded
from management`s assessment of the Company`s operating performance and are not
related to the Company`s ongoing business operations. In addition, the Company
excludes the items from EBITDA described above in its calculations to determine
compliance with its debt covenants and to assess its ability to borrow
additional funds to finance or expand its operations.

The Company believes that by reporting these measures, it provides insight and
consistency in its financial reporting and presents a basis for comparison of
its business operations between current, past and future periods. In addition,
the measures provide a basis for the Company to compare its financial results to
those of other comparable publicly traded companies and are used by management
to plan and forecast its business.

Non-GAAP financial measures should not be considered as a substitute for, or
superior to, measures of financial performance which are prepared in accordance
with U.S. GAAP and may be different from non-GAAP financial measures used by
other companies. Investors are encouraged to review the reconciliations of our
GAAP to non-GAAP net income and adjusted EBITDA, which are set forth below.

Forward-Looking Statements

This press release and related conference call contain forward-looking
statements that involve substantial risks and uncertainties. You can identify
forward-looking statements by words such as "anticipate," "believe," "could,"
"estimate," "expect," "intend," "may," "plan," "should," "will," "would" or
similar words. You should consider these statements carefully because they
discuss our plans, targets, strategies, prospects and expectations concerning
our business, operating results, financial condition and other similar matters.
We believe that it is important to communicate our future expectations to our
investors.

There may be events in the future, however, that we are not able to predict
accurately or control. Our actual results may differ materially from the
expectations we describe in our forward-looking statements. Factors or events
that could cause our actual results to materially differ may emerge from time to
time, and it is not possible for us to accurately predict all of them. Before
you invest in our common stock, you should be aware that the occurrence of any
such event or of any of the additional events described as risk factors in the
Company's filings with the Securities and Exchange Commission could have a
material adverse effect on our business, results of operation and financial
position. Any forward-looking statement made by us in this press release or
related conference call speaks only as of the date on which we make it. We
undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by law.

DELTEK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
REVENUES:
Software license fees $ 15,758 $ 22,132 $ 26,984 $ 39,139
Consulting services 19,216 22,324 39,282 46,590
Maintenance and support services 30,987 28,286 61,584 56,351
Other revenues 3,408 4,623 3,512 4,639
Total revenues 69,369 77,365 131,362 146,719

COST OF REVENUES:
Cost of software license fees 1,835 1,687 3,223 3,267
Cost of consulting services 16,140 19,192 33,457 39,355
Cost of maintenance and support services 5,529 4,799 11,269 10,426
Cost of other revenues 4,605 4,875 4,648 5,107
Total cost of revenues 28,109 30,553 52,597 58,155
GROSS PROFIT 41,260 46,812 78,765 88,564

Research and development 10,773 11,558 21,644 22,949
Sales and marketing 10,653 13,413 22,172 25,716
General and administrative 9,412 8,379 17,317 15,940
Restructuring charge 1,135 1,052 2,548 1,052
Total operating expenses 31,973 34,402 63,681 65,657

INCOME FROM OPERATIONS 9,287 12,410 15,084 22,907

Interest income 11 193 22 450
Interest expense (1,473 ) (2,480 ) (2,982 ) (5,954 )
Other income (expense), net 24 (164 ) 21 (201 )
INCOME BEFORE INCOME TAXES 7,849 9,959 12,145 17,202
Income tax expense 2,948 4,536 4,590 7,758

NET INCOME $ 4,901 $ 5,423 $ 7,555 $ 9,444

EARNINGS PER SHARE
Basic $ 0.09 $ 0.12 $ 0.15 $ 0.20

Diluted $ 0.09 $ 0.11 $ 0.15 $ 0.20

COMMON SHARES AND EQUIVALENTS OUTSTANDING
Basic weighted average shares 52,394 46,552 49,560 46,527

Diluted weighted average shares 52,914 47,692 49,940 47,812

DELTEK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

June 30, December 31,
2009 2008
(unaudited) (unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 113,457 $ 35,788
Accounts receivable, net of allowance of $3,632 and $2,195 at June 30, 2009 and December 31, 2008, respectively 47,196 47,747
Deferred income taxes 4,640 4,635
Prepaid expenses and other current assets 6,466 6,874
Income taxes receivable 857 846
TOTAL CURRENT ASSETS 172,616 95,890

PROPERTY AND EQUIPMENT, NET 12,861 14,639
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, NET 1,034 1,438
LONG-TERM DEFERRED INCOME TAXES 5,820 4,125
INTANGIBLE ASSETS, NET 14,982 17,396
GOODWILL 57,763 57,654
OTHER ASSETS 1,593 2,130
TOTAL ASSETS $ 266,669 $ 193,272

LIABILITIES AND STOCKHOLDERS` EQUITY (DEFICIT)
CURRENT LIABILITIES:
Current portion of long-term debt $ - $ 10,154
Accounts payable and accrued expenses 28,122 28,734
Accrued liability for redemption of stock in recapitalization 317 317
Deferred revenues 37,032 21,296
TOTAL CURRENT LIABILITIES 65,471 60,501

LONG-TERM DEBT 179,604 182,661
OTHER TAX LIABILITIES 1,130 1,003
OTHER LONG-TERM LIABILITIES 3,024 2,917
TOTAL LIABILITIES 249,229 247,082

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS` EQUITY (DEFICIT):
Preferred stock, $0.001 par value-authorized, 5,000,000 shares; none issued or outstanding at June 30, 2009 or December 31, 2008 - -
Common stock, $0.001 par value-authorized, 200,000,000 shares; issued and outstanding, 64,268,327 and 43,474,220 shares at June 30, 2009 and December 31, 2008, respectively 64 43
Class A common stock, $0.001 par value-authorized, 100 shares; issued and outstanding, 100 shares at June 30, 2009 and December 31, 2008 - -
Additional paid-in capital 240,450 177,249
Accumulated deficit (222,350 ) (229,905 )
Accumulated other comprehensive deficit (724 ) (1,197 )
TOTAL STOCKHOLDERS` EQUITY (DEFICIT) 17,440 (53,810 )

TOTAL LIABILITIES AND STOCKHOLDERS` EQUITY (DEFICIT) $ 266,669 $ 193,272

DELTEK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Six Months Ended June 30,
2009 2008
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,555 $ 9,444
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for doubtful accounts 2,472 489
Depreciation and amortization 5,529 4,597
Amortization of debt issuance costs 481 396
Stock-based compensation expense 4,179 3,693
Employee stock purchase plan expense 162 130
Restructuring charge, net 918 495
Loss on disposal of fixed assets 23 321
Deferred income taxes (1,909 ) (1,564 )

Change in assets and liabilities:
Accounts receivable, net (1,675 ) 4,888
Prepaid expenses and other assets 501 1,509
Accounts payable and accrued expenses (1,480 ) (1,379 )
Income taxes receivable (120 ) (3,768 )
Excess tax benefit (deficiency) benefit from exercise of stock options 108 (59 )
Other tax liabilities 127 202
Other long-term liabilities (289 ) (303 )
Deferred revenues 16,065 804
Net Cash Provided by Operating Activities 32,647 19,895

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (931 ) (4,295 )
Capitalized software development costs (150 ) (261 )
Net Cash Used in Investing Activities (1,081 ) (4,556 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock in connection with rights offering, net of issuance costs 58,228 -
Proceeds from exercise of stock options 677 192
Excess tax (deficiency) benefit from exercise of stock options (108 ) 59
Proceeds from issuance of stock under employee stock purchase plan 310 305
Offering costs paid for 2007 sale of common stock in initial public offering - (275 )
Repayment of debt (13,211 ) -
Net Cash Provided by Financing Activities 45,896 281

IMPACT OF FOREIGN EXCHANGE RATES ON CASH AND CASH EQUIVALENTS 207 148

NET INCREASE IN CASH AND CASH EQUIVALENTS 77,669 15,768

CASH AND CASH EQUIVALENTS--Beginning of period 35,788 17,091

CASH AND CASH EQUIVALENTS--End of period $ 113,457 $ 32,859

DELTEK, INC.
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(in thousands, except per share data)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Net Income (GAAP Basis) $ 4,901 $ 5,423 $ 7,555 $ 9,444
Income Tax Expense 2,948 4,536 4,590 7,758
Pre-Tax Income (GAAP Basis) $ 7,849 $ 9,959 $ 12,145 $ 17,202
Adjustments:
Stock-based Compensation 2,221 1,459 4,341 3,823
Recapitalization Retention Expense 7 125 152 294
Amortization of Acquired Intangibles 1,173 831 2,437 1,835
Restructuring Charge 1,135 1,052 2,548 1,052

Adjusted Pre-Tax Income 12,385 13,426 21,623 24,206

Less: Adjusted Income Tax Expense 4,735 5,902 8,324 10,518

Non-GAAP Net Income $ 7,650 $ 7,524 $ 13,299 $ 13,688

Non-GAAP Earnings Per Share (diluted) $ 0.14 $ 0.16 $ 0.27 $ 0.29
Weighted Average Shares 52,914 47,692 49,940 47,812

RECONCILIATION OF GAAP OPERATING INCOME AND OPERATING MARGIN TO NON-GAAP OPERATING INCOME AND OPERATING MARGIN
(in thousands)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Operating Income and Margin - GAAP $ 9,287 13 % $ 12,410 16 % $ 15,084 11 % $ 22,907 16 %
Plus: Stock-based Compensation and Recapitalization Retention Expense 2,228 1,584 4,493 4,117
Plus: Amortization of Acquired Intangibles 1,173 831 2,437 1,835
Plus: Restructuring Charge 1,135 1,052 2,548 1,052

Operating Income and Margin - Non-GAAP $ 13,823 20 % $ 15,877 21 % $ 24,562 19 % $ 29,911 20 %

Total Revenues $ 69,369 $ 77,365 $ 131,362 $ 146,719

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(in thousands)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Net Income (GAAP Basis) $ 4,901 $ 5,423 $ 7,555 $ 9,444
Stock-based Compensation 2,221 1,459 4,341 3,823
Recapitalization Retention Expense 7 125 152 294
Depreciation 1,294 1,104 2,541 2,124
Amortization 1,381 1,150 2,992 2,473
Interest Expense, net 1,462 2,287 2,960 5,504
Income Tax Provision 2,948 4,536 4,590 7,758
Restructuring Charge 1,135 1,052 2,548 1,052

Adjusted EBITDA $ 15,349 $ 17,136 $ 27,679 $ 32,472

STOCK-BASED COMPENSATION AND RECAPITALIZATION RETENTION EXPENSES
(in thousands)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Cost of Software License Fees $ - $ 1 $ - $ 2
Cost of Consulting Services 401 363 846 789
Cost of Maintenance and Support Services 102 (360 ) 205 (91 )
Research and Development 421 401 996 951
Sales and Marketing 416 415 801 892
General and Administrative 888 764 1,645 1,574
Total $ 2,228 $ 1,584 $ 4,493 $ 4,117

AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS
(in thousands)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Cost of Software License Fees $ 263 $ 255 $ 618 $ 685
Cost of Consulting Services 19 20 39 39
Sales and Marketing 872 537 1,743 1,074
General and Administrative 19 19 37 37
Total $ 1,173 $ 831 $ 2,437 $ 1,835

AMORTIZATION AND DEPRECIATION EXPENSES
(in thousands)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Cost of Software License Fees $ 475 $ 576 $ 1,181 $ 1,327
Cost of Consulting Services 433 395 851 753
Cost of Maintenance and Support Services 213 125 425 254
Research and Development 292 264 575 520
Sales and Marketing 1,093 763 2,188 1,494
General and Administrative 169 131 313 249
Total $ 2,675 $ 2,254 $ 5,533 $ 4,597

RECONCILIATION OF GAAP EPS TO EPS EXCLUDING THE RIGHTS OFFERING
(in thousands, except per share data)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Net Income (GAAP Basis) $ 4,901 $ 5,423 $ 7,555 $ 9,444

GAAP Earnings Per Share (diluted) $ 0.09 $ 0.11 $ 0.15 $ 0.20
Rights Offering $ 0.02 $ 0.01 $ 0.02 $ 0.01
Earnings Per Share Excluding the Rights Offering (diluted) $ 0.11 $ 0.12 $ 0.17 $ 0.21

Weighted Average Shares 52,914 47,692 49,940 47,812
Rights Offering 8,926 3,448 6,217 3,446
Weighted Average Shares (Excluding the Rights Offering) 43,988 44,244 43,723 44,366

RECONCILIATION OF NON-GAAP EPS TO NON-GAAP EPS EXCLUDING THE RIGHTS OFFERING
(in thousands, except per share data)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008

Net Income (Non-GAAP Basis) $ 7,650 $ 7,524 $ 13,299 $ 13,688

Non-GAAP Earnings Per Share (diluted) $ 0.14 $ 0.16 $ 0.27 $ 0.29
Rights Offering $ 0.03 $ 0.01 $ 0.03 $ 0.02
Non-GAAP Earnings Per Share Excluding the Rights Offering (diluted) $ 0.17 $ 0.17 $ 0.30 $ 0.31

Weighted Average Shares 52,914 47,692 49,940 47,812
Rights Offering 8,926 3,448 6,217 3,446
Weighted Average Shares (Excluding the Rights Offering) 43,988 44,244 43,723 44,366

Deltek, Inc.
Investor Relations:
Dave Spille, 703-885-9423
davespille@deltek.com
or
Media Relations:
Patrick Smith, 703-885-9062
patricksmith@deltek.com

Copyright Business Wire 2009

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