Press Releases

March 10, 2009

Vangent, Inc. Announces Fourth Quarter and Full Year 2008 Results

Arlington, VA, March 10, 2009 - Vangent, Inc., a leading global provider of information management and strategic business process outsourcing services, today announced its fourth quarter and full year 2008 results.

Vangent reported revenue of $558.3 million for the full year ended December 31, 2008, up $48.2 million or 9.5% compared to $510.1 million at year end 2007.  For the fourth quarter ended December 31, 2008 revenue grew $9.9 million, or 6.7% to $157.5 million, compared with $147.6 million in the fourth quarter of 2007.  Increased revenue primarily reflects growth in the Government Group, which for the full year increased 12.6% or $50.6 million over 2007. 

Vangent’s net loss was $26.5 million for the year ended December 31, 2008 compared to a net loss of $22.4 million for the comparable period a year ago.  The increase of $4.1 million in the net loss for 2008 reflects the goodwill impairment charge of $16.8 million for 2008 related to the Human Capital and International segments. Adjusted EBITDA increased 2.5% to $73 million for the full year 2008, compared with $71.2 million at year end 2007.  On a quarterly basis, Adjusted EBITDA was $20.8 million compared with $24.3 million in the fourth quarter of 2007. 

“Despite an unprecedented challenging economic environment, 2008 was a successful year for Vangent,” said Mac Curtis, President and Chief Executive Officer of Vangent.  “We continued to execute our strategic plan and delivered solid revenue growth. As we look ahead, we believe we are well positioned for continued success in 2009, especially as we identify and capitalize on significant opportunities with the new Administration, and as we continue to build on our successes in healthcare, education and international businesses.”

Contract Awards, Backlog & Operational Highlights

Vangent booked $253.4 million of new business in the fourth quarter. For the full year ended December 31, 2008, Vangent booked $545 million in new awards – the highest in the Company’s history. The Company’s current new business pipeline stands at a robust $3.2 billion.

Vangent’s total contract backlog, which is the amount of revenue the company expects to realize over the remaining term of the contracts, including the base period and all option years, was $1.7 billion at December 31, 2008.  Vangent’s funded backlog, which is the portion for which funding has been authorized, was $522.8 million at the end of 2008. 

During the fourth quarter, Vangent completed its most successful open enrollment period with the Centers for Medicare & Medicaid Services (“CMS”) customer.  In addition, Vangent won several key contracts:

• $64 million contract with Mexico’s Social Security agency to design, build and operate a full biometric identity management system;
• $61 million contract with the Department of State’s National Passport Information Center to design, build and operate a multi-channel customer contact center; and
• $30 million contract with the Department of Defense Military Health System called Traumatic Brain Injury and Behavioral Health to design, build and test a clinical IT system and to develop an electronic health record to track the progress and treatment of military personnel.

Mr. Curtis continued, “The fourth quarter capped a successful year for our Company with important new business wins and the successful completion of the CMS open enrollment period.  Importantly, we reached a record number of employees at the end of the year, which directly translates to impressive revenue growth for the business.”

Liquidity, Cash Flow and Balance Sheet Information

Total long-term debt decreased from $428.2 million at December 31, 2007 to $420.4 million at December 31, 2008.  Cash and cash equivalents were $21.1 million at December 31, 2008 compared to $26.1 million at December 31, 2007, a decrease of $5.0 million. Cash flow from operations for the year ended December 31, 2008 was $18.4 million, up from $12.0 million in 2007.  Vangent’s total liquidity, which includes $47.6 million available under its revolving credit facility, was $68.7 million. 

Q4 2008 and Fiscal 2008 Year-End Financial Results Conference Call:  Will take place on Tuesday, March 10 at 9:30 am ET.  Interested parties may call (877) 723-9509 and request the “Vangent Q4 and Fiscal 2008 Year-End Financial Results Conference Call,” conference ID # 1084682. 

Audio Replay:  A replay of the earnings call can be heard after 2 p.m. on March 10, 2009 until March 24, 2009.  To hear the replay, dial (888) 203-1112 and enter the same conference ID # 1084682.  For interested parties outside the U.S. and Canada, dial (719) 457-0820 and enter the same conference ID #.

Vangent’s fourth quarter and full-year 2008 financials including the Management Discussion and Analysis will be made available on the company’s website at www.vangent.com following the completion of the Vangent Q4 and Full Year 2008 Results Conference Call.

About Vangent, Inc.
With over 7,000 employees worldwide, Vangent, Inc. is a global provider of Consulting, Systems Integration, Human Capital Management and Strategic Business Process Outsourcing services to the U.S. federal and international governments, higher education institutions and corporations. Clients include the Centers for Medicare & Medicaid Services, the U.S. Departments of Defense, Education, Health and Human Services, Labor, State and the U.S. Office of Personnel Management, as well as Fortune 500 companies. Headquartered in Arlington, Virginia, the company has offices throughout the U.S. and in the U.K., Canada, Mexico, Venezuela and Argentina.
 
Forward-Looking Statements
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