Stanley Reports Financial Results For Second Quarter of Fiscal Year 2010

Highlights:

ARLINGTON, Va., Oct. 29 /PRNewswire-FirstCall/ -- Stanley, Inc. (NYSE: SXE), a
leading provider of systems integration and professional services to the U.S.
federal government, today announced record revenues, earnings and margins for
its second quarter ended September 25, 2009.

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Second-quarter revenues exceeded the high end of management's guidance by more
than $4 million and diluted EPS exceeded the high end of guidance by $0.06.

Stanley's revenue growth in the second quarter of fiscal year 2010 was
attributed to increased IT support services for the U.S. Marine Corps;
military intelligence training and operations support for the U.S. Army;
biometrics software development, training and support for certain Department
of Defense agencies; and additional production and engineering services
performed for the Space and Naval Warfare Systems Command.

Second Quarter Fiscal Year 2010 Results:
Revenues for the second quarter ended September 25, 2009, were $217.1 million,
an increase of 14 percent over second quarter fiscal year 2009 revenues of
$191.1 million. Organic revenue growth was 11 percent. EBITDA(2) was $23.2
million for the quarter, an increase of 22 percent over EBITDA of $18.9
million in the second quarter of last fiscal year. EBITDA margin for the
second quarter was 10.7 percent compared with 9.9 percent in the second
quarter of last fiscal year, due primarily to improved performance on
contracts and a greater proportion of more profitable fixed-price contracts as
well as continued efficiencies realized in the company's general and
administrative infrastructure on a higher revenue base. Operating income was
$20.3 million, up 24 percent from $16.3 million in the same quarter of last
fiscal year. Operating margin was 9.4 percent versus 8.6 percent in the second
quarter of last fiscal year. The increases in operating margin resulted
primarily from the factors improving EBITDA margin as well as depreciation and
amortization representing a lesser percentage of revenues, as compared to the
prior year.

Net income for the quarter was $11.8 million versus $8.7 million for the
second quarter of last fiscal year, an increase of 35 percent. Diluted
earnings per share for the quarter were $0.49 compared with diluted earnings
per share of $0.37 for the second quarter of last fiscal year.

Contract backlog at September 25, 2009, was $2.0 billion, essentially
unchanged from first quarter of fiscal year 2010 contract backlog of $2.0
billion at June 26, 2009, and a decrease of 5 percent from second-quarter
fiscal year 2009 contract backlog of $2.1 billion at September 26, 2008.

Second Quarter Fiscal Year 2010 Operational Highlights:
-- Second-quarter net bookings totaled $179.9 million, equating to a
book-to-bill ratio of 0.8:1.
-- Among new business awards and additional tasking in the second
quarter:
-- A $64 million, five-year, single-award,
indefinite-delivery/indefinite-quantity contract with the U.S.
Army
to support the Aviation and Missile Research, Development and
Engineering Center in the development of Advanced-Capability
Insensitive Munitions Warheads;
-- A $58 million, five-year basic ordering agreement to continue
providing help desk, installation/integration, maintenance,
training
and system administration support services to the Department of
State's Bureau of Consular Affairs;
-- A five-year, fixed-price contract and a 10-year,
time-and-materials
contract, totaling $38 million, supporting Intelligence agencies
with cybersecurity, network operations and systems engineering
services;
-- A $23 million, two-year blanket purchase agreement supporting the
U.S. Army Intelligence Center of Excellence; and

-- Two one-year task orders totaling $16 million supporting the U.S.
Army Intelligence and Security Command's Information Dominance
Center with COMSEC engineering, cybersecurity, network operations
and systems engineering services.

Six-Month Fiscal Year 2010 Results:
For the six months ended September 25, 2009, revenue increased 17 percent to
$425.8 million compared with $363.6 million for the same period in the prior
fiscal year. Organic revenue growth for the first six months of fiscal year
2010 was 8 percent. EBITDA for the six-month period ended September 25, 2009,
increased 28 percent to $44.7 million compared with $35.1 million for the same
period in the prior fiscal year. EBITDA margin for the first six months of
fiscal year 2010 was 10.5 percent, up from 9.6 percent for the same period in
the prior fiscal year. EBITDA margin increased primarily as a result of
improved performance on contracts and a greater proportion of more profitable
fixed-price contracts. Operating income for the first six months of fiscal
year 2010 was $39.1 million, an increase of 27 percent over operating income
of $30.7 million reported a year earlier. Operating margin for the first six
months of fiscal year 2010 was 9.2 percent compared with 8.4 percent in the
first six months of fiscal year 2009. Operating margin increased year over
year primarily as a result of the factors improving EBITDA and EBITDA margin,
offset slightly by depreciation and amortization representing a higher
percentage of revenues.

Net income for the first six months of fiscal year 2010 was $22.4 million
compared with net income for the same period last fiscal year of $17.0
million. Diluted earnings per share for the first six months of fiscal year
2010 were $0.93 compared with diluted earnings per share of $0.72 for the
first six months of fiscal year 2009.

Cash flow from operations for the first six months of fiscal year 2010 was
$28.6 million. Days sales outstanding (DSO) for the second quarter was 79
days, down from 84 days for the first quarter of fiscal year 2010.

"Stanley's second quarter of fiscal year 2010 demonstrated strong revenue
growth and margin improvement, EPS growth and cash flow generation," said Phil
Nolan, Stanley's chairman, president and CEO. "Expected revenue contributions
from recent new awards have enabled us to raise the midpoint of our fiscal
year 2010 revenue guidance. Although ongoing delays in the federal procurement
process have kept bookings below ideal levels, we anticipate that new awards
in the coming quarters will set the foundation for continued top-line growth
going forward."

Management's Outlook:
Based on the company's current contract backlog and management's estimate as
to future tasking and contract awards, Stanley is issuing guidance for its
fiscal year 2010 third quarter and updating guidance for its full fiscal year
2010. The table below represents management's current expectations about
future financial performance, based on information available at this time:

Third Quarter Fiscal Year 2010 Fiscal Year 2010
Ending Ending
December 25, 2009 March 31, 2010
Revenues $212 - $219 million $845 - $875 million
Diluted EPS $0.46 - $0.48 $1.85 - $1.89
Diluted projected
share count 24.1 - 24.2 million 24.1 - 24.2 million

As previously announced, Stanley will conduct a conference call today at 5:00
p.m. EDT to discuss fiscal second quarter 2010 results. Analysts and
institutional investors may access the call by dialing (888) 679-8040 (U.S.)
or (617) 213-4851 (international) and entering passcode 82414174. All other
investors may access the call via the Investor Relations page of the company's
website at www.stanleyassociates.com. Investors are advised to log on to the
website at least 15 minutes prior to the call to register, download and
install any necessary audio software. An archive of the webcast will be
available for one week following the live event. The replay will also be
available through November 12, 2009, at (888) 286-8010 (U.S.) or (617)
801-6888 (international) with a passcode of 44771764.

About Stanley
Stanley (NYSE: SXE) is a provider of information technology services and
solutions to U.S. defense, intelligence and federal civilian government
agencies. Stanley offers its customers systems integration solutions and
expertise to support their mission-essential needs at any stage of program,
product development or business lifecycle through five service areas: systems
engineering, enterprise integration, operational support, business process
outsourcing, and advanced engineering and technology. Headquartered in
Arlington, Va., the company has approximately 4,800 employees at over 100
locations in the U.S. and worldwide. Stanley has been recognized by FORTUNE
magazine as one of the "100 Best Companies to Work For" from 2007 through
2009. Please visit www.stanleyassociates.com for more information.

Any statements in this press release about our future expectations, plans and
prospects, including statements containing the words "estimates,"
"anticipates," "plans," "expects" and similar expressions, constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various important
factors discussed in our Annual Report on Form 10-K for the fiscal year ended
March 31, 2009, as filed with the Securities and Exchange Commission (SEC),
and additional filings we make with the SEC. In addition, the forward-looking
statements included in this press release represent our views as of the date
of this release. We assume no obligation to update publicly or revise any
forward-looking statements made herein or any other forward-looking statements
made by us, whether as a result of new information, future events or
otherwise.

(1) Organic revenue growth, as presented, measures revenue growth adjusted for
the impact of acquisitions. Stanley believes that this non-GAAP financial
measure provides useful information because it allows management and investors
to better assess the underlying growth rate of the company's existing
business. This non-GAAP financial measure should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with GAAP. Please see the reconciliation table at the end of this
release that reconciles GAAP revenue to organic revenue.

(2) EBITDA is a non-GAAP measure that is defined as GAAP net income (loss)
plus other expense (income), interest expense, income taxes, and depreciation
and amortization. We believe EBITDA is useful to investors because it is one
of the measures used by our board of directors and management to evaluate our
business and we believe it is a commonly used measure of financial performance
in comparable companies and is provided to help investors evaluate companies
on a consistent basis, as well as to enhance an understanding of our operating
results. EBITDA should not be construed as either an alternative to net income
as an indicator of our operating performance or as an alternative to cash
flows as a measure of liquidity. Please refer to the table at the end of this
release that reconciles GAAP net income to EBITDA.

Condensed Consolidated Statements of Income
(unaudited)
(in thousands, except per share amounts)

Three Months Ended Six Months Ended
---------------------------- ----------------------------
September 25, September 26, September 25, September 26,
2009 2008 2009 2008
------------- ------------- ------------- -------------
Revenues $217,089 $191,078 $425,835 $363,645
------------- ------------- ------------- -------------

Operating costs
and expenses:
Cost of revenues 180,518 159,925 353,607 305,684
Selling, general
and
administrative 13,401 12,224 27,492 22,883
Depreciation
and
amortization 2,852 2,586 5,682 4,428
------------- ------------- ------------- -------------
Total operating
costs and
expenses 196,771 174,735 386,781 332,995
------------- ------------- ------------- -------------
Operating income 20,318 16,343 39,054 30,650

Other income
(expense):
Other income - 1 3 3
Interest income 21 71 59 196
Interest expense (897) (1,830) (2,045) (2,367)
------------- ------------- ------------- -------------
Total other
expenses (876) (1,758) (1,983) (2,168)
------------- ------------- ------------- -------------
Income before taxes 19,442 14,585 37,071 28,482

Provision for
income taxes (7,689) (5,857) (14,654) (11,437)
------------- ------------- ------------- -------------
Net income $11,753 $8,728 $22,417 $17,045
============= ============= ============= =============

Earnings per share:
Basic $0.50 $0.38 $0.96 $0.75
============= ============= ============= =============
Diluted $0.49 $0.37 $0.93 $0.72
============= ============= ============= =============

Weighted-average
shares:
Basic 23,447 22,793 23,364 22,760
============= ============= ============= =============
Diluted 24,058 23,817 24,018 23,763
============= ============= ============= =============

Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)

September 25, 2009 March 31, 2009
------------------ --------------
Assets

Current Assets:
Cash $8,272 $1,811
Accounts receivable - net 179,167 187,680
Prepaid and other current assets 8,040 6,766
----- -----
Total current assets 195,479 196,257

Property and equipment - net 19,506 19,552
Goodwill 262,705 262,705
Intangible assets - net 12,600 15,557
Deferred taxes 4,285 4,212
Other assets 4,246 3,269
----- -----
Total assets $498,821 $501,552
======== ========

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable $19,707 $21,528
Accrued expenses and other
liabilities 72,289 79,841
Current portion of long-term debt 1,000 1,000
Income taxes payable - 2,034
----- -----
Total current liabilities 92,996 104,403

Line of credit 113,700 135,030
Long-term debt - net of current portion 34,250 34,500
Other long-term liabilities 10,086 10,396
------ ------
Total liabilities 251,032 284,329
------- -------

Commitments and contingencies:
Stockholders' equity
Common stock 240 238
Additional paid-in capital 104,999 96,957
Retained earnings 143,851 121,434
Accumulated other comprehensive loss (906) (886)
Deferred compensation (395) (520)
---- ----
Total stockholders' equity 247,789 217,223
------- -------
Total liabilities and
stockholders' equity $498,821 $501,552
======== ========

Organic Growth Reconciliation
(unaudited)
(in thousands)

Three Months Ended
--------------------------------------
September 25, 2009 September 26, 2008 Percent Growth
------------------ ------------------ --------------
Total revenues,
as reported $217,089 $191,078 14%
Plus: Revenues from
acquired companies for
the comparable prior
year period - 4,612
------ ----- ------

Organic revenues $217,089 $195,690 11%
==

Six Months Ended
--------------------------------------
September 25, 2009 September 26, 2008 Percent Growth
------------------ ------------------ --------------
Total revenues,
as reported $425,835 $363,645 17%
Plus: Revenues from
acquired companies for
the comparable prior
year period - 30,664
------ ----- ------
Organic revenues $425,835 $394,309 8%
=

EBITDA Reconciliation
(unaudited)
(in thousands)

Three Months Ended Six Months Ended
--------------------------- ---------------------------
September 25, September 26, September 25, September 26,
2009 2008 2009 2008
------------- ------------- ------------- -------------

Net income $11,753 $8,728 $22,417 $17,045
Provision for
income taxes 7,689 5,857 14,654 11,437
Interest expense 897 1,830 2,045 2,367
Interest income (21) (71) (59) (196)
Other income - (1) (3) (3)
Depreciation and
amortization 2,852 2,586 5,682 4,428
------------- ------------- ------------- -------------

EBITDA 23,170 18,929 44,736 35,078
============= ============= ============= =============

Revenue $217,089 $191,078 $425,835 $363,645
============= ============= ============= =============

EBITDA Margin 10.7% 9.9% 10.5% 9.6%

SOURCE Stanley, Inc.

Brian J. Clark, Executive Vice President and Chief Financial Officer, Stanley,
+1-703-310-3236, or Lawrence Delaney, Jr., Investor Relations Counsel,
Stanley, +1-703-739-7410