Deltek Reports Q3 EPS of $0.10 and Non-GAAP EPS of $0.15

http://www.businesswire.com/news/home/20091029006379/en

GAAP Net Income Increases 35% and Non-GAAP Net Income Increases 29% from Prior
Quarter
Non-GAAP Operating Margin Improves to 24%

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 third quarter ended September 30, 2009.

Total revenue for Q3 was $64.1 million, compared to $69.4 million in Q2 2009. Q2
total revenue included $3.4 million of other revenue associated with fees
generated from the Company`s annual customer conference held in May. License
revenue for Q3 was $12.7 million, compared to $15.8 million in Q2. Maintenance
and support revenue in Q3 was $31.6 million, an increase from $31.0 million in
Q2. Consulting services revenue for Q3 was $19.7 million, an increase from $19.2
million in the prior quarter.

Q3 GAAP net income increased 35% to $6.6 million, from $4.9 million in the prior
quarter, and non-GAAP net income increased 29% to $9.9 million, from $7.6
million in Q2. Q3 GAAP EPS was $0.10, compared with $0.09 in Q2 and non-GAAP EPS
was $0.15, compared with $0.14 in Q2. Q3 cash flow from operations increased 22%
from Q2 to $18.6 million, resulting in a cash balance of $130.4 million at
September 30, 2009.

"Our continuing focus on margin expansion and cost control drove our
double-digit profit growth and strong cash flow," said Kevin Parker, president
and CEO of Deltek. "While near-term predictability for license revenue remains
challenging across the software industry, we remain very engaged with our
customers and our pipelines continue to be strong in all segments of our
business. During the quarter, we saw a significant increase in new customer
activity in our A&E and professional services vertical market."

"Throughout 2009, we have successfully maintained our strong profitability,
significantly strengthened our balance sheet, increased cash flow and delivered
innovative products to market. As a result of these accomplishments, we are well
positioned for Q4 and 2010."

When compared to prior year results, total revenue for Q3 was $64.1 million,
compared to $71.0 million in 2008. License revenue for Q3 was $12.7 million,
compared to $18.5 million in 2008. Maintenance and support revenue in Q3 was
$31.6 million, an increase from $29.3 million in 2008. Consulting services
revenue for Q3 was $19.7 million, compared to $23.1 million in the prior year.
Other revenues were insignificant in both Q3 2009 and Q3 2008.

GAAP net income for the third quarter was $6.6 million, or $0.10 per share,
compared to $8.0 million, or $0.17 per share, last year. Non-GAAP net income for
Q3 was $9.9 million, or $0.15 per share, compared to $10.3 million, or $0.22 per
share, in Q3 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.

The per share amounts in this press release refer to diluted per share figures.

Q3 Highlights

* During the quarter, Deltek amended and extended the Credit Agreement governing
its term loans and revolving credit facility. Under the amended Credit
Agreement, $129.4 million of the Company`s existing term loans were extended by
two years to April 2013. The remaining $50.2 million of the Company`s existing
term loans will mature in April 2011, with four equal quarterly installments
beginning September 30, 2010.

Under the amended Credit Agreement, the Company also extended by three years
$22.5 million of the Company`s $30 million revolving credit facility. That
portion will now expire in April 2013. The remaining $7.5 million of the
Company`s revolving credit facility will expire in April 2010. The Company
extended the term loans and revolving credit facility to maximize financial
flexibility and to improve upon an already strong balance sheet.

* Deltek appointed Jim Dellamore as its new Executive Vice President, Global
Services. In this position, Mr. Dellamore is responsible for the strategic and
operational direction of Deltek`s Global Services organization. Mr. Dellamore
brings over 30 years of experience to Deltek, and prior to his arrival at the
Company, he held senior management positions with GXS and Oracle Corporation.
* Deltek announced that Goba (Pty) Limited, one of South Africa`s leading
engineering firms, selected Deltek Vision to win more business, streamline their
back-office and successfully manage large, complex projects. Goba joins an
expanding group of customers in this region, demonstrating the momentum that
Deltek Vision is experiencing in the growing South African marketplace.
* Deltek announced that numerous customers, including ATK, Camber Corporation,
and Comprehensive Health Services, have purchased AppGRC for Deltek Costpoint
since the solution was released. Government contractors leverage the powerful
solution to automate the monitoring of key Costpoint data, making it easier to
provide persuasive audit evidence for DCAA, SOX and other regulatory compliance.
With the Federal Government`s growing emphasis on contractor transparency,
AppGRC enables Deltek customers to protect their information and respond to
auditor requests quickly, significantly reducing the overall cost of
compliance.

Impact of Common Stock Rights Offering on Historical Shares Outstanding

In accordance with ASC 260-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 June 2009 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 third 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 November 5, 2009 by
dialing 1-800-642-1687 in North America and 1-706-645-9291 outside North America
(pass code: 35743831). The replay also will be available through November 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 September 30, Nine Months Ended September 30,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
REVENUES:
Software license fees $ 12,711 $ 18,508 $ 39,695 $ 57,647
Consulting services 19,737 23,060 59,019 69,650
Maintenance and support services 31,648 29,324 93,232 85,675
Other revenues 18 58 3,530 4,697
Total revenues 64,114 70,950 195,476 217,669

COST OF REVENUES:
Cost of software license fees 1,198 1,672 4,421 4,939
Cost of consulting services 16,716 18,277 50,173 57,632
Cost of maintenance and support services 5,493 5,438 16,762 15,864
Cost of other revenues 26 39 4,674 5,146
Total cost of revenues 23,433 25,426 76,030 83,581
GROSS PROFIT 40,681 45,524 119,446 134,088

Research and development 10,854 11,761 32,498 34,710
Sales and marketing 10,396 13,637 32,568 39,353
General and administrative 8,712 8,753 26,029 24,693
Restructuring charge (benefit) 552 (61 ) 3,100 991
Total operating expenses 30,514 34,090 94,195 99,747

INCOME FROM OPERATIONS 10,167 11,434 25,251 34,341

Interest income 13 168 35 618
Interest expense (1,917 ) (2,454 ) (4,899 ) (8,408 )
Other expense, net (29 ) (60 ) (8 ) (261 )
INCOME BEFORE INCOME TAXES 8,234 9,088 20,379 26,290
Income tax expense 1,627 1,063 6,217 8,821

NET INCOME $ 6,607 $ 8,025 $ 14,162 $ 17,469

> 2008
Net (loss) income $ (5,835 ) $ 42,349 $ (30,829 ) $ 104,771
Depreciation of rental equipment and depreciation and amortization of non-rental equipment and intangibles 80,865 94,472 251,164 276,545
Interest expense, net 50,666 48,296 130,911 152,399
(Benefit) provision for income taxes (7,034 ) 19,325 (19,734 ) 59,235
EBITDA $ 118,662 $ 204,442 $ 331,512 $ 592,950

Adjustments:
Gain on extinguishment of debt, net (12,489 ) - (12,489 ) -
Share-based compensation 1,179 957 3,473 2,797
Other (income) expense, net (75 ) 327 335 (316 )
Adjusted EBITDA $ 107,277 $ 205,726 $ 322,831 $ 595,431
(Adjusted EBITDA as a percentage of total revenues) 34.0 % 44.1 % 32.5 % 44.5 %

Free Cash Flow GAAP Reconciliation
(in thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net cash provided by operating activities $ 107,033 $ 131,260 $ 230,217 $ 295,365

Purchases of rental equipment (15,151 ) (65,506 ) (33,488 ) (230,464 )
Purchases of property and equipment (708 ) (2,182 ) (2,597 ) (12,205 )
Proceeds from sales of rental equipment 31,384 29,357 123,757 86,043
Proceeds from sales of property and equipment 2,409 1,325 10,539 4,350
Insurance proceeds from rental equipment and property claims - - 3,086 -
Net capital inflows (expenditures) 17,934 (37,006 ) 101,297 (152,276 )

Free cash flow $ 124,967 $ 94,254 $ 331,514 $ 143,089

Statistical Measures

Utilization is defined as the average dollar value of equipment rented by
customers (based on original equipment cost) for the relevant period divided by
the aggregate dollar value of all equipment (based on original cost) for all
equipment.

Same store rental revenue growth is calculated as the year over year change in
rental revenue for locations that are open at the end of the period and have
been operating under the company`s direction for more than 12 months.

Employee count is given at the end of the period indicated and the data reflect
the actual head count as of each period.

Original Equipment Fleet Cost (OEC) is defined as the original dollar value of
equipment purchased from the original equipment manufacturer (OEM). Fleet
purchased from non-OEM sources is assigned a comparable OEC dollar value at the
time of purchase.

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

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