Good day ladies and gentlemen and welcome to the first quarter FY2008 earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Senior Vice President of Investor Relations, Mr. Stuart Davis; please proceed sir.

Welcome everyone. Here today are Kenneth Dahlberg, our Chairman and CEO and Mark Sopp, our CFO. Lawrence Prior, our COO will join us for the Q&A session. During this call we will make forward-looking statements to assist you in understanding the company and our expectations about its future financial and operating performance. These statements are subject to a number of risks that could cause actual events to differ materially and I refer you to our SEC filings for a discussion of these risks. In addition the statements made represent our views as of today. We anticipate that subsequent events and developments will cause our views to change. We may elect to update the forward-looking statements at some point in the future but we specifically disclaim any obligation to do so. With that I’ll turn the call over to Kenneth.

Thanks Stuart and good afternoon everyone. While in my opinion and by every metric we’re off to a great start for the year. Building on last year’s momentum we continue to accelerate organic growth and improve our operating margin. We are also off to a strong start in generating cash and deploying it for shareholder returns. So far this year we closed both the Icon Systems and SM Consulting acquisitions and we significantly ramped up our share repurchase activity. We expect this year to be strong for our company based on our first quarter op earning results; our positive new business wins year-to-date and our expectation of a relatively stable near-term funding environment. Turning to government funding, there has been a lot of activity but not a lot of results since the last call. Congress has returned from the Memorial Day recess yesterday and the House is taking up the Senate Pass Supplemental Appropriations Bill which provided $165 billion for wartime operations and $10 billion in domestic spending. Both Houses of Congress realize that the army will soon run out of funds. While the Supplemental Spending Bill may follow a torturous path in the coming days, we do expect final agreement on a Bill that the President will sign prior to the July 4th holiday. We expect that this Supplemental Bill will fully fund the wartime expense for government fiscal year 2008 and also provide the new bridge funding to carry into the spring of 2009 which will remove the largest funding uncertainty through the remainder of our fiscal year. To date we have seen little if any impact from the delay and do not expect any as long as the Supplemental is approved before the July 4th recess. The House and Senate Arms Services Committees have separately approved defense…

Thanks Kenneth, as mentioned we are off to a solid start in fiscal 2009. Revenues and profits are above our operating plan through our first quarter which ended April 30th. We are particularly pleased that our performance and actions in the first quarter now puts us back on track for our annual earnings per share of growth target of 11% to 18%. I’ll cover this a little bit more later on. Getting right into the results revenues for the first quarter were $2.37 billion, that’s up 18% on a total growth basis over last year, up 14% on an internal growth basis over the first quarter last year. This growth was fueled as usual first by retaining our diverse contract base with re-compete wins, next by strongly executing and expanding work on existing contracts and finally of course winning new work. Now before I get into some of the specifics on revenue growth drivers this quarter, I want to note that our 14% internal growth metric comes over a fairly weak first quarter last year where we had internal growth as you may recall of about 2%. We then followed that up with internal revenue growth averaging 8% over quarters two through four last year. So while this by means dampens the strength of our revenue growth this quarter it does make it much harder to achieve a similar rate of growth for the rest of this fiscal year. That said for the rest of this year we expect to continue sequential growth in Q2 and again in Q3 with a slight pull-back in Q4 which is consistent with our historical trends. Notable drivers for internal revenue growth in Q1 were our two MRAP contracts that Kenneth discussed which together contributed about three percentage points of that 14% internal growth.…

Thanks Mark. Now before turning to your questions I want to emphasize how seriously we take the commitments that we make to our shareholders. Last quarter we had to warn that the drop in interest income could cause us not to meet the EPS range that we had previously guided. Having said that we did not stand idly by. We aggressively deployed our capital and stepped-up our execution to allow us to reconfirm our original guidance. This is what you can expect from us; candidly describing the risks in our business and working hard to keep our commitments. We are now ready to take questions.

(Operator Instructions) Your first question comes from the line of Edward Caso - Wachovia Securities

I was wondering Kenneth if you could give us some sense for your expectation on the contract wins and contract task funding as we get just before and just after the election, how you think that may differ this time then other Presidential election year cycles? I’m just trying to get the sense if this four year period will be different then other four year periods as far as maybe a decision making pause on both announcing contracts and also funding contracts.

That’s difficult to speculate and I care not to. I think we continued to state we’ve gained market share. We’ve aggressively pursued strong sub markets and the overall IT services market and you’re starting to see that result with these wins and the internal growth. The speculation that regardless of whether it’s a dem or republican that they will still have a strong defense budget, probably even more have a stronger homeland security budget. I don’t see that they’ll be much change early on in the process but every administration has their own agenda and I wouldn’t care to speculate what that would be.

Mark can you give us a sense on your assumptions and your tax rate and your share count for this year?

On the tax rate front we still have a full year expectation of in between 39 and 40 that has not changed. We did have some pick-up in the first quarter from some reversal of some contingencies but that’s not recurring. We continue to hold a view that the research tax credit will not be renewed if you will, which I think is a conservative measure. Maybe that will go in our favor but we are staying conservative on that. If that happens to come through that would be a pick-up of about 50 basis points. So 39 to 40 this year. On the share count the repurchase activity of 12 million in the first quarter will have full year affect of about a 10 million share count decline for the full year based on the timing using the weighted average approach. So as we entered the year, we had projected a [creep] of about 5 million in share count for the full year and now we’ve offset that by about 10 and over the rest of the year we’ll just have to see how it goes quarter-to-quarter in terms of any other activity and repurchases, share price, etc.

Your next question comes from the line of Joseph Nadol - JP Morgan

Can you give any more details on the AITS win, what that means, do you expect a protest and what it needs in terms of top line for next year?

Well we don’t expect a protest. The protest period has passed. This was a program before my time that the company had won and we’re delighted to now be able to service the National Guard and the army reserve. It’s a big contract. I wouldn’t guesstimate but its multiples hundreds of millions over a five year period. You can do the math; it’s a substantial revenue generator for us that will start a bit this year. It should be a good ramp up and then get to a sustainment level in the ensuing years.

Any more color available on what happened on the commercial side this quarter, was it the loss of a specific contract, was it lower volume on contracts, was it specific business area within commercial, just it seems like things are—happened relatively quickly there in terms of your disappointment.

By and large, we’re seeing a conundrum if you will, with our oil customers with the price of oil being as high as they are, they’re going the opposite way and retrenching in the project work, there’s more noble work that we continue to do year in and year out. So a couple of our key clients have really retrenched and I have to say that it was unexpected from our commercial business area and now we need to take a look going forward with that being the reality at least for the rest of the year, we just have more SG&A then we should for the revenue levels.

How many scanners did you deliver in the quarter versus last year and what was the positive impact on margins year-over-year?

This was a lower shipping quarter; we delivered seven units and two the prior year quarter.

But it did have a positive impact on margins and I guess that was offset a little bit by some of the commercial issues, is that a fair characterization?

It had a negligible effect on margins year-over-year, we do however expect those shipment volumes to increase in sequential quarters which will attribute to improving margins this fiscal year as we move through the year.

On the top line, you’re sticking with that 6% to 9% range obviously this was a really strong start to the year, I think you had said that you could move closer to the top end of the range if you got more visibility on the funding environment which it sounds like you have, why not bump that up a little bit?

Why not? Well because continuing resolution—there’s still some uncertainty in our Q4 so we feel confident with the good start that we have that we can guide in that range. If good things happen, better results will occur. But I think we’re doing what we should do as good stewards of the company and prudent.

Your next question comes from the line of Laura Lederman - William Blair & Company Laura Lederman - William Blair & Company: Looking at the commercial business again, would one of the things you do is potentially divest that or is that something you view as very strategic? Looking at your mix between civilian and DoD, if we end up with a democrat would you shift that more towards civil and where is that sitting now as percentage and final question, total revenue from the war fighter, as that starts to ramp down how much of the revenue is tied to that?

Well let me address the commercial, one quarter does not make a decision for me to divest the business. Everything goes through its cycles including our government business portfolio. This was unexpected and our team is focusing on returning to the kind of profitability that we expect in that business and I think as I highlighted in my earlier comments, we’re focusing on the more noble work in the commercial space where our customers see the value add of a science and engineering company like ours. Laura Lederman - William Blair & Company: The second question was civil versus DoD and thoughts on that mix going forward for you?

We’ve had some good state and local wins of recent note. That tends to be an area where if we can pick and select the appropriate contracts to compete for--we’ve done exceedingly well in the past and we will continue to do that in the future. It’s certainly an area that we want to stay focused on because under a new administration with perhaps some declines in a robust defense budget you want to look across the full range of the markets and I’m glad we’re in that fed civil space. We’ll continue to do well there. Laura Lederman - William Blair & Company: The war fighter, as that ramps down over time what percentage of revenue is fairly directly related to what’s going on with the war fighter in Iraq and Afghanistan?

We should make a distinction between what’s associated with our MRAP support and two contracts and some of that work is physically in Iraq, Kuwait and Afghanistan but a big portion of it is actually work being done in Charleston but supporting the war fighter. Roughly about $240 million, $250 million a year is associated with the MRAP support, probably less then $150 million for the rest of our work. We do believe that’s increased some year-to-year and we would expect even with a planned draw-down by the next administration you’ll see continued support for the logistics part of MRAP and you’ll see continued investment on the part of the next administration in the security—really needed for whatever scenario they put forward.

So as we approach $10 billion and we’re talking about $100 million to $200 million it’s rather insignificant.

Your next question comes from the line of Jason Kupferberg - UBS Securities

You had mentioned that the large buybacks so far year-to-date are one of the reasons why you now expect to be in the annual target range on the EPS of 11% to 18%, I had always thought that that range excluded any buybacks. I just wanted to get a sense if you can clarify whether you would be in this range without the benefit of the buybacks as well as the penny or so of EPS that you got from the non-recurring non-operating income in the quarter?

The comment made was that the repurchases already done now have the affect of recouping interest income that we lost from the rate reductions. We’re not projecting in that statement any future repurchases as we’ve always done. So again, half of that recovery is you will, again loss from the reduced interest income which you will recall was $25 million on the interest income line was recovered by the repurchase activity if you will on an EPS basis through the first quarter and then also by stronger top line expectations at the margins that we had guided all along; the 20 to 30 basis points improvement year-over-year. So those two pieces collectively recover that lost income from the rate reductions as of now.

And just to be clear, we have the long-term model of 11% to 18% which really does not include any uptick in terms of the share repurchase but at the same time it doesn’t envision any down tick in interest income. So we were able to make those up. That’s not a sustaining part of our 11% to 18% model.

As far as the funded backlog, it seems like that’s been increasing as a percent of the total backlog, is that just kind of [inaudible] of quarter-to-quarter movement or should we interpret that as a sign of increasing visibility from your point of view?

In both cases I think for our business development team and our four group presidents, the pipelines improved, the backlog improved and both are just healthy signs of the business. In part it was Kenneth’s leadership driving us to those hundred million dollar opportunities. We now have 138 of those in some various stages of the pipeline. So we’re seeing a healthy improvement.

Just an update on the Deltek rollout in terms of how the latest deployments are going and your expectations for the rest of this fiscal year?

Right now we’re sticking to the plan that we had set out. We’re doing continuous improvement with the two business units and the corporate deployment. A good many lessons learned. [John Hartley] our Controller is doing continued improvement on all of the financial processes and our financial concept of operations and we’re looking to stay on plan.

Your next question comes from the line of Joseph Vafi - Jefferies & Company Joseph Vafi - Jefferies & Company: I was wondering if the book-to-bill or backlog, how that might have been affected if we took into account those single award IDIQs that sometimes you get and bill and generate revenue in a single quarter?

We’re very disciplined about our book-to-bill not including those. As you saw in the release and in our discussions there’s a very healthy contribution to the top line growth of this company through both the multiple award as well as the single award IDIQs. It will continue to be a very valuable top line driver for us. We have benefited from the task orders on many of those vehicles but as we report out to you in the conservative SAIC fashion we’re going to continue to keep those out. We will update however on a quarterly basis with some color around it and we’ll continue to improve that as we meet with you guys. Joseph Vafi - Jefferies & Company: So just trying to get a sense and looking at the momentum in the business and one of the things we look at is book-to-bill and funded and then another piece of the equation for you is that single award IDIQ input, is there a way that we should be looking at that to kind of help us gauge the momentum in the business as we look forward over say the next couple of quarters?

And one of the ways we’re trying to do it is when you see that our funded backlog improved about 15%, our total backlog by 5%, our overall pipeline has improved 8% and our $100 million pipeline again double-digit 11%. That will include some of the growth that we’ve had on the IDIQ wins. What we’ve begun to do and you’ll have seen the three press releases of larger wins. Those include the Guardian contract as well as one that was highlighted by the longest acronym known to man, the [C5-ISR] program. Those are great examples of single award IDIQ where we’ll do the press release, we’ll detail in those press releases what the revenue expectation is and if you marry that up with our book-to-bill it’ll start to give you, I think the color that you need to go ahead and forecast our top line growth. Joseph Vafi - Jefferies & Company: Mark, on the minority interest number, obviously it looks like you had some minority interest income this quarter, is that something that we should expect to continue moving forward and then I guess you also paid some debt down so how should we be looking at interest expense going forward?

We didn’t have minority interest income per se in the normal GAAP vernacular, but we did have income from a joint venture with Bechtel and our work at Yucca Mountain. That actually was about $3 million for the year. I would not consider it recurring. Our work there continues but we have award fee dates that come far apart and it’s kind of an all or nothing deal so we don’t project that we will get that each time and they’re pretty far spread apart. So we’ll probably have a little bit more the rest of this year but it’s not significant. As I mentioned we had some gains from the sale of investments in our venture capital area. In the past those have largely been impairments and losses but we were fortunate this period to pick up again, about $3 million. In this case $4 million for those activities. There is risk going forward in that whole category for further impairments. I think we’ve disclosed those risk amounts before. Joseph Vafi - Jefferies & Company: And then any change in the interest income outlook here? I know you paid some debt down and interest rates are coming in a bit.

Interest income as I said which was eight for the quarter will be halved going forward based on our current estimates from lower cash balances and lower rates. On the expense side the $100 million brings our interest expense down by rough 10 for the year. And that was well projected in our IPO due diligence and so forth.

Your next question comes from the line of Cai von Rumohr - Cowen and Company

Quick follow-up on the commercial, if you made 8% margins in government, by my calculation unless corporate expense was [deminimus] commercial was near breakeven on sales of about $140 million. Is that correct? So it was really down a fair amount from the fourth quarter.

It’s a little north of that and you’ll see that in the Q, it’s in the order of 3% plus.

The government segment you’ll see is 7.8%; the commercial is about 3% when we disclose the segment numbers in the Q tomorrow.

You mentioned I think 14% internal organic growth that would imply close to 3% acquisitions, that number looks high. Where did all that acquisition revenue come from? Is that correct? You’re up almost 18%.

Benham’s a large company, it’s roughly $200 million run rate. We picked it up last early August and growing well.

Which one was that?

Our Benham operation, the energy management business that we acquired.

So really it was about $50 million from acquisitions, that’s essentially—the math is correct.

That’s correct.

Could you go over the number, the bid you had outstanding going into the quarter? Bids awaiting decisions.

If you look at the total number, right now if you give it a dollar item, there’s $13.5 billion of total submits that are under evaluation. If you’re looking at the $100 million jobs or larger, we have 27 submitted today. That dollar item actually includes more then just the $100 million bids, but I thought it would be good to give the color.

So the $13.5 billion, is that as of the end of the quarter?

And that’s all in, yes sir.

Your next question comes from the line of William Loomis - Stifel, Nicolaus & Company William Loomis - Stifel, Nicolaus & Company: Looking at the organic growth in the quarter, the 14% was that about in line with what you—I know you don’t give quarterly guidance, but is that about what you expected when you gave guidance last quarter?

The revenue results were ahead of our expectations coming into the quarter. William Loomis - Stifel, Nicolaus & Company: And what were the key drivers there, because bookings were about as you projected at one times revenue they wouldn’t add as much revenue anyway in the quarter. You knew what you wanted in the prior quarter so what were kind of the deltas that gave you that upside?

One thing to help, it was more broad based then we expected so if you look at our 20 plus units, 15 of them were well within that growth range and six of our business units were actually doing double-digit growth. So there was broad based performance, great leadership by all our group presidents and it was very positive to see this early in the year. William Loomis - Stifel, Nicolaus & Company: Is there anything that’s going to change in the back half that would lower it down to the kind of mid-single-digits to keep it in your full year guidance range or again, you mentioned could be conservative, do you think that’s a conservative number?

I think Kenneth was appropriately cautious that we had hoped to see a supplemental before Memorial Day. We’re now hoping to see it before the fourth of July. And then there’s still always the unknown and the uncertainty of how they play out the appropriations and the continuing resolution.

More importantly we’ll more then likely be under a CR for most of our fourth quarter which means the government will fund existing contracts not new contracts. And our Q4 historically has been a less revenue generator then the prior three quarters.

And just remember as I said earlier, while we do expect to grow sequentially from here, those prior year numbers are much bigger comparables as a base to compare against in Q2 through Q4. And that has a slowing effect on the rate as I said. William Loomis - Stifel, Nicolaus & Company: And Mark you mentioned that $8 million other income, how about on the award fees or stuff that’s above the other income line, was there anything unusual in the quarter in terms of a big award fee that’s kind of outside the normal?

There was nothing.

Your next question comes from the line of Gregory Wowkun – Banc of America Securities Gregory Wowkun – Banc of America Securities: Ken one initiative that you laid out last quarter was to create a significant business in the cyber security area, any notable wins or traction being made in this area that you can speak to?

Not yet. Lots of traction around building our program team. Lots of beginning to bid opportunities but momentum really will occur in the cyber space I think more in Q3 and Q4.

Your final question comes from the line of Erik Olbeter – Pacific Crest Securities Erik Olbeter – Pacific Crest Securities: Can you provide us the breakdown and talk about bid and proposal activity and the expenditures there and how you view them going through the rest of the year?

B&P was actually up in the first quarter over last by quite a bit, that was slightly offset not totally, by a little bit less in IR&D and the reason for that is some of the technical folks we used for IR&D are needed on the bid and proposal front and that’s a trade-off we make all the time. But our trends on SG&A we had pretty low result in the quarter—6% of revenue actually expect that percent to rise a little bit in the second quarter. We have some expenses we’ll deal with partially related to the commercial area we discussed earlier but then staying in the low 6% range thereafter.

I’m showing you have no further questions at this time.

I’m going to go ahead and close the call for today. On behalf of the team, I really want to thank all of you for your interest in the company and hope to see you out on the road soon.