##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended July 2, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-21682
 SPARTA, Inc.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    63-0775889(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 25531 Commercentre Drive, Suite 120, Lake Forest, CA
    
    92630-8874(Address of principal executive offices)
    
    (Zip Code)
 (949) 768-8161  (Registrants telephone number, including area code)
 Not Applicable  (Former name, former address and former fiscal year, if changed since last report)
 þ o
  o o þ
 o þ




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##### 



SPARTA, Inc.
   PART I FINANCIAL INFORMATIONItem 1.Financial StatementsConsolidated balance sheet  June 30, 2006 (unaudited) and December 31, 2005Consolidated statement of income  Three months ended June 30, 2006 and 2005
(unaudited); Six months ended June 30, 2006 and 2005 (unaudited)Consolidated statement of cash flows  Six months ended June 30, 2006 and 2005 (unaudited)Notes to consolidated financial statements  June 30, 2006 (unaudited)Item 2.Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3.Quantitative and Qualitative Disclosures About Market RiskItem 4.Controls and ProceduresPART II OTHER INFORMATIONItem 1.Legal ProceedingsItem 1A.Risk FactorsItem 2.Unregistered Sales of Equity Securities and Use of ProceedsItem 3.Defaults Upon Senior SecuritiesItem 4.Submission of Matters to a Vote of Security HoldersItem 5.Other InformationItem 6.ExhibitsSignaturesEXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
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PART I
 
 Item 1 Financial Statements
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SPARTA, Inc.
 
 CONSOLIDATED BALANCE SHEET
 June 30,2006
    
    
    December 31,(Unaudited)
    
    
    2005ASSETSCurrent AssetsCash and cash equivalents
    
    $
    27,494,000
    
    
    $
    29,254,000Short-term investments
    
    
    6,811,000
    
    
    
    Receivables, net
    
    
    53,120,000
    
    
    
    64,891,000Prepaid expenses
    
    
    2,828,000
    
    
    
    1,348,000Prepaid income taxes
    
    
    1,294,000
    
    
    
    2,112,000Assets of discontinued operations
    
    
    2,398,000
    
    
    
    Total current assets
    
    
    93,945,000
    
    
    
    97,605,000Equipment and improvements, net
    
    
    11,297,000
    
    
    
    10,725,000Intangible assets
    
    
    515,000
    
    
    
    858,000Other assets
    
    
    3,075,000
    
    
    
    3,358,000Total Assets
    
    $
    108,832,000
    
    
    $
    112,546,000LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccrued compensation
    
    $
    14,374,000
    
    
    $
    20,660,000Accounts payable and other accrued expenses
    
    
    10,046,000
    
    
    
    9,519,000Billings in excess of costs plus earnings
    
    
    3,132,000
    
    
    
    2,620,000Current portion of subordinated notes payable
    
    
    3,128,000
    
    
    
    2,432,000Deferred income taxes
    
    
    2,700,000
    
    
    
    2,700,000Liabilities of discontinued operations
    
    
    753,000
    
    
    
    Total current liabilities
    
    
    34,133,000
    
    
    
    37,931,000Subordinated notes payable
    
    
    7,063,000
    
    
    
    5,993,000Deferred income taxes
    
    
    580,000
    
    
    
    580,000Commitments and Contingencies (Note F)Stockholders EquityCommon stock, $.01 par value, 25,000,000 shares
authorized; 8,865,837 and 8,396,762 shares issued;
5,215,531 and 5,316,493 shares outstanding
    
    
    89,000
    
    
    
    84,000Additional paid-in capital
    
    
    117,283,000
    
    
    
    102,685,000Retained earnings
    
    
    60,239,000
    
    
    
    51,813,000Treasury stock, at cost
    
    
    (110,555,000
    )
    
    
    (86,540,000
    )Total stockholders equity
    
    
    67,056,000
    
    
    
    68,042,000Total Liabilities and Stockholders Equity
    
    $
    108,832,000
    
    
    $
    112,546,000
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SPARTA, Inc.
 
 CONSOLIDATED STATEMENT OF INCOME
 (Unaudited)
 Three Months ended June 30,
    
    
    Six Months ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Sales
    
    $
    72,115,000
    
    
    $
    67,832,000
    
    
    $
    140,469,000
    
    
    $
    130,264,000Costs and expenses:Labor costs and related benefits
    
    
    35,714,000
    
    
    
    34,459,000
    
    
    
    73,570,000
    
    
    
    67,554,000Subcontractor costs
    
    
    22,130,000
    
    
    
    19,190,000
    
    
    
    39,066,000
    
    
    
    35,525,000Facility costs
    
    
    4,095,000
    
    
    
    3,796,000
    
    
    
    8,163,000
    
    
    
    7,643,000Travel and general administrative costs
    
    
    3,108,000
    
    
    
    3,299,000
    
    
    
    5,742,000
    
    
    
    5,255,000Total costs and expenses
    
    
    65,047,000
    
    
    
    60,744,000
    
    
    
    126,541,000
    
    
    
    115,977,000Operating income
    
    
    7,068,000
    
    
    
    7,088,000
    
    
    
    13,928,000
    
    
    
    14,287,000Interest income
    
    
    (389,000
    )
    
    
    (218,000
    )
    
    
    (763,000
    )
    
    
    (390,000
    )Interest expense
    
    
    142,000
    
    
    
    131,000
    
    
    
    250,000
    
    
    
    218,000Income from continuing operations
before provision for taxes on income
    
    
    7,315,000
    
    
    
    7,175,000
    
    
    
    14,441,000
    
    
    
    14,459,000Provision for taxes on income
    
    
    3,105,000
    
    
    
    2,843,000
    
    
    
    6,039,000
    
    
    
    5,827,000Income from continuing operations
    
    
    4,210,000
    
    
    
    4,332,000
    
    
    
    8,402,000
    
    
    
    8,632,000Discontinued operations (Note E)Income from discontinued operations of
Sprial Technology, Inc. before income taxes
    
    
    27,000
    
    
    
    9,000
    
    
    
    39,000
    
    
    
    27,000Provision for taxes on income
    
    
    11,000
    
    
    
    3,000
    
    
    
    15,000
    
    
    
    11,000Income from discontinued operations
    
    
    16,000
    
    
    
    6,000
    
    
    
    24,000
    
    
    
    16,000Net income
    
    $
    4,226,000
    
    
    $
    4,338,000
    
    
    $
    8,426,000
    
    
    $
    8,648,000Earnings per share:Basic:Income from continuing operations
    
    $
    0.81
    
    
    $
    0.84
    
    
    $
    1.60
    
    
    $
    1.68Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.81
    
    
    $
    0.84
    
    
    $
    1.60
    
    
    $
    1.68Diluted:Income from continuing operations
    
    $
    0.76
    
    
    $
    0.75
    
    
    $
    1.50
    
    
    $
    1.51Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.76
    
    
    $
    0.75
    
    
    $
    1.50
    
    
    $
    1.51Weighted average common
equivalent shares:Basic
    
    
    5,192,509
    
    
    
    5,176,699
    
    
    
    5,257,676
    
    
    
    5,156,486Diluted
    
    
    5,524,186
    
    
    
    5,748,438
    
    
    
    5,625,648
    
    
    
    5,714,988
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SPARTA, Inc.
 
 CONSOLIDATED STATEMENT OF CASH FLOWS
 (Unaudited)
 Six Months ended June 30,2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    8,426,000
    
    
    $
    8,648,000Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    1,833,000
    
    
    
    1,625,000Loss on sale of equipment
    
    
    49,000
    
    
    
    Stock-based compensation
    
    
    5,918,000
    
    
    
    5,571,000Changes in assets and liabilities:Receivables, net
    
    
    9,554,000
    
    
    
    (4,500,000
    )Prepaid expenses
    
    
    (1,546,000
    )
    
    
    (689,000
    )Other assets
    
    
    278,000
    
    
    
    (565,000
    )Accrued compensation
    
    
    (5,562,000
    )
    
    
    (1,831,000
    )Accounts payable and other accrued expenses
    
    
    551,000
    
    
    
    (2,221,000
    )Billings in excess of costs plus earnings
    
    
    517,000
    
    
    
    (14,000
    )Income taxes receivable/payable
    
    
    818,000
    
    
    
    447,000Net cash provided by operating activities
    
    
    20,836,000
    
    
    
    6,471,000Cash flows from investing activities:Purchases of equipment and improvements
    
    
    (2,201,000
    )
    
    
    (1,469,000
    )Purchase of assets
    
    
    
    
    
    
    (1,500,000
    )Purchase of short-term investments
    
    
    (6,811,000
    )
    
    
    Net cash used for investing activities
    
    
    (9,012,000
    )
    
    
    (2,969,000
    )Cash flows from financing activities:Proceeds from issuance of common stock
    
    
    7,083,000
    
    
    
    7,121,000Excess tax benefit from stock-based compensation
    
    
    1,602,000
    
    
    
    1,333,000Purchases of treasury stock
    
    
    (20,624,000
    )
    
    
    (14,146,000
    )Principal payments on subordinated notes payable
    
    
    (1,625,000
    )
    
    
    (1,667,000
    )Net cash used for financing activities
    
    
    (13,564,000
    )
    
    
    (7,359,000
    )Net decrease in cash and cash equivalents
    
    
    (1,740,000
    )
    
    
    (3,857,000
    )Cash and cash equivalents at beginning of period
    
    
    29,254,000
    
    
    
    29,455,000Cash and cash equivalents at end of period
    
    $
    27,514,000
    
    
    $
    25,598,000Supplemental disclosures of cash flow information:Cash paid during the period for:Interest
    
    $
    250,000
    
    
    $
    207,000Income taxes
    
    $
    3,640,000
    
    
    $
    4,064,000Non-cash investing and financing activities:Issuance of subordinated notes payable in connection
with purchases of treasury stock
    
    $
    3,391,000
    
    
    $
    1,129,000Receipt of notes receivable in exchange for exercise of
stock options
    
    $
    536,000
    
    
    $
    952,000
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SPARTA, Inc.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 Note A  Basis of Presentation
    Note B  Short-term Investments
 Accounting for Certain Investments in Debt and
Equity Securities
 Note C  Accounts Receivable
  June 30,2006
    
    
    December 31,2005Billed
    
    $
    28,382,000
    
    
    $
    33,729,000Unbilled
    
    
    25,598,000
    
    
    
    32,035,00053,980,000
    
    
    
    65,764,000Less allowances for unallowable contract costs
    
    
    (860,000
    )
    
    
    (873,000
    )$
    53,120,000
    
    
    $
    64,891,000
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SPARTA, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note D  Income Taxes
  Note E  Discontinued Operations
 Accounting for the Impairment or Disposal of
Long-Lived Assets
  Three months ended June 30,
    
    
    Six months ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Sales
    
    $
    3,033,000
    
    
    $
    2,639,000
    
    
    $
    5,856,000
    
    
    $
    5,324,000Costs and expenses
    
    
    (3,006,000
    )
    
    
    (2,630,000
    )
    
    
    (5,817,000
    )
    
    
    (5,297,000
    )Income before income taxes
    
    
    27,000
    
    
    
    9,000
    
    
    
    39,000
    
    
    
    27,000Income tax expense
    
    
    (11,000
    )
    
    
    (3,000
    )
    
    
    (15,000
    )
    
    
    (11,000
    )Income from discontinued operations
    
    $
    16,000
    
    
    $
    6,000
    
    
    $
    24,000
    
    
    $
    16,000
 Note F  Commitments and Contingencies
  Note G  Stockholders Equity
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SPARTA, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
    Note H  Share-Based Compensation
  Share-Based Payment Accounting for Stock Issued to Employees Accounting for Stock-Based
Compensation
  - 8 -




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SPARTA, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   1997 Stock Plan
   - 9 -




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SPARTA, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Six Months EndedKey Assumptions
    
    June 30, 2006Expected volatility factor
    
    6.9% - 9.2%Expected option term (in years)Short-term options
    
    0.125All other options
    
    3.0Risk-free interest rate
    
    4.2% - 5.1%Expected annual dividend yield
    
    
  Six Months Ended June 30, 2006Weighted AverageStock options subject to SFAS123(R)
    
    Number of Shares
    
    
    Exercise PriceOutstanding at January 1, 2006
    
    
    
    
    
    $
    Granted
    
    
    25,268
    
    
    
    41.96Forfeited or Expired
    
    
    (2,875
    )
    
    
    42.41Exercised
    
    
    (4,281
    )
    
    
    42.24Outstanding at June 30, 2006
    
    
    18,112
    
    
    $
    41.83Exercisable at June 30, 2006
    
    
    6,069
    
    
    $
    41.61
   Six Months Ended June 30, 2006Weighted AverageNonvested stock options subject
    
    Number of
    
    
    Grant-Date Fairto SFAS 123(R)
    
    Shares
    
    
    ValueNonvested at January 1, 2006
    
    
    
    
    
    $
    Granted
    
    
    25,268
    
    
    
    3.34Vested
    
    
    (12,637
    )
    
    
    0.66Forfeited
    
    
    (588
    )
    
    
    5.93Nonvested at June 30, 2006
    
    
    12,043
    
    
    $
    6.02
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SPARTA, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   Six Months Ended June 30, 2006Stock options subject to
    
    
    
    
    
    Weighted AverageAPB 25
    
    Number of Shares
    
    
    Exercise PriceOutstanding at January 1, 2006
    
    
    2,490,869
    
    
    $
    30.80Forfeited or Expired
    
    
    (174,455
    )
    
    
    36.60Exercised
    
    
    (247,459
    )
    
    
    14.67Outstanding at June 30, 2006
    
    
    2,068,955
    
    
    $
    32.24Exercisable at June 30, 2006
    
    
    810,694
    
    
    $
    26.61
   Six Months Ended June 30, 2006Nonvested stock options subject to
    
    Number of
    
    
    Weighted AverageAPB 25
    
    Shares
    
    
    Exercise PriceNonvested at January 1, 2006
    
    
    1,594,352
    
    
    $
    34.71Vested
    
    
    (167,999
    )
    
    
    23.71Forfeited
    
    
    (168,092
    )
    
    
    36.60Nonvested at June 30, 2006
    
    
    1,258,261
    
    
    $
    35.86
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SPARTA, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  Stock Compensation Plan
   Six Months Ended June 30, 2006Weighted AverageGrant-Date FairShares of Restricted Stock
    
    Number of Shares
    
    
    ValueOutstanding at January 1, 2006
    
    
    60,937
    
    
    $
    14.60Granted
    
    
    1,880
    
    
    
    42.53Disbributed
    
    
    (7,489
    )
    
    
    19.80Forfeited
    
    
    (1,217
    )
    
    
    19.20Outstanding at June 30, 2006
    
    
    54,111
    
    
    $
    14.75Vested, undistributed at June 30, 2006
    
    
    33,875
    
    
    $
    6.64
   Six Months Ended June 30, 2006Weighted AverageGrant-Date FairNonvested Shares of Restricted Stock
    
    Number of Shares
    
    
    ValueNonvested at January 1, 2006
    
    
    28,441
    
    
    $
    24.14Granted
    
    
    1,880
    
    
    
    42.53Vested
    
    
    (8,868
    )
    
    
    19.16Forfeited
    
    
    (1,217
    )
    
    
    19.20Nonvested at June 30, 2006
    
    
    20,236
    
    
    $
    28.33
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##### Table of Contents



SPARTA, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note I  Computation of Earnings Per Share
 Three months ended June 30,
    
    
    Six months ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Basic EPSNet income
    
    $
    4,226,000
    
    
    $
    4,338,000
    
    
    $
    8,426,000
    
    
    $
    8,648,000Weighted average
shares outstanding
    
    
    5,192,509
    
    
    
    5,176,699
    
    
    
    5,257,676
    
    
    
    5,156,486Per share amounts
    
    $
    0.81
    
    
    $
    0.84
    
    
    $
    1.60
    
    
    $
    1.68Diluted EPSNet income
    
    $
    4,226,000
    
    
    $
    4,338,000
    
    
    $
    8,426,000
    
    
    $
    8,648,000Weighted average
shares outstanding
    
    
    5,192,509
    
    
    
    5,176,699
    
    
    
    5,257,676
    
    
    
    5,156,486Stock options
    
    
    313,321
    
    
    
    510,802
    
    
    
    347,419
    
    
    
    497,565Restricted stock
    
    
    18,356
    
    
    
    60,937
    
    
    
    20,553
    
    
    
    60,9375,524,186
    
    
    
    5,748,438
    
    
    
    5,625,648
    
    
    
    5,714,988Per share amounts
    
    $
    0.76
    
    
    $
    0.75
    
    
    $
    1.50
    
    
    $
    1.51
 Note J  Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes
 Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards
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Item 2 Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Results of Operations
    Operating Results(amounts in thousands, except percentages)Three months ended June 30,
    
    Six months ended June 30,2006
    
    2005
    
    2006
    
    2005Sales
    
    
    
    
    
    $
    72,115
    
    
    $
    67,832
    
    
    $
    140,469
    
    
    $
    130,264Sales by business area, as a
percentage of total sales:Ballistic Missile Defense (BMD)
    
    
    
    
    
    
    49
    %
    
    
    46
    %
    
    
    47
    %
    
    
    47
    %Other Dept of Defense (DoD)
    
    
    
    
    
    
    48
    %
    
    
    51
    %
    
    
    50
    %
    
    
    50
    %Non-DoD
    
    
    
    
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %Operating Income
    
    
    
    
    
    $
    7,068
    
    
    $
    7,088
    
    
    $
    13,928
    
    
    $
    14,287Operating Margin
    
    
    
    
    
    
    9.8
    %
    
    
    10.4
    %
    
    
    9.9
    %
    
    
    11.0
    %Income from Continuing Operations
    
    
    
    
    
    $
    4,210
    
    
    $
    4,332
    
    
    $
    8,402
    
    
    $
    8,632Income from Discontinued Operations
    
    
    
    
    
    $
    16
    
    
    $
    6
    
    
    $
    24
    
    
    $
    16Net income
    
    
    
    
    
    $
    4,226
    
    
    $
    4,338
    
    
    $
    8,426
    
    
    $
    8,648
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Backlog
   - 15 -




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##### Table of Contents



June 30,
    
    December 31,
    
    June 30,2006
    
    2005
    
    2005(amounts in thousands)Annualized funded contract backlog
    
    $
    122,200
    
    
    $
    78,100
    
    
    $
    129,200Annualized unfunded contract backlog
    
    
    59,000
    
    
    
    110,700
    
    
    
    70,900Total annualized contract backlog
    
    
    181,200
    
    
    
    188,800
    
    
    
    200,100Expected 12-month value of future
funding on proposals with high
probability of winning procurement
    
    
    99,300
    
    
    
    84,800
    
    
    
    54,500Total annualized Company-defined
backlog
    
    $
    280,500
    
    
    $
    273,600
    
    
    $
    254,600Total multi-year contract backlog
    
    $
    506,600
    
    
    $
    535,200
    
    
    $
    503,100Expected value of future funding on
proposals with high probability of
winning procurement
    
    
    440,000
    
    
    
    302,700
    
    
    
    130,300Total multi-year Company-defined
backlog
    
    $
    946,600
    
    
    $
    837,900
    
    
    $
    633,400Annualized Company-defined backlog
(by business area):BMD
    
    $
    134,500
    
    
    $
    128,000
    
    
    $
    111,600Other DoD
    
    
    138,700
    
    
    
    137,800
    
    
    
    135,000Non-DoD
    
    
    7,300
    
    
    
    7,800
    
    
    
    8,000Total annualized Company-defined
backlog
    
    $
    280,500
    
    
    $
    273,600
    
    
    $
    254,600
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##### Table of Contents



Liquidity and Capital Resources
  Balance atJune 30,
    
    
    December 31,
    
    
    June 30,2006
    
    
    2005
    
    
    2005Cash and cash equivalents
    
    $
    27,494,000
    
    
    $
    29,254,000
    
    
    $
    25,598,000Short-term investments
    
    $
    6,811,000
    
    
    $
    
    
    
    $
    Stockholders equity
    
    $
    67,056,000
    
    
    $
    68,042,000
    
    
    $
    58,125,000Subordinated notes payable
    
    $
    10,191,000
    
    
    $
    8,425,000
    
    
    $
    9,869,000Borrowings under line of credit
    
    $
    
    
    
    $
    
    
    
    $
    Current ratio
    
    
    2.8
    
    
    
    2.6
    
    
    
    2.6
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##### Table of Contents



Overview
      - 18 -




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##### Table of Contents



Cash Flow Information
      - 19 -




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##### Table of Contents



Payments Due by Period(amounts in thousands)Total
    
    
    Less than 1
    
    
    1-3 years
    
    
    4-5 years
    
    
    More than 5Year
    
    
    
    
    
    
    
    
    
    
    YearsSubordinated Promissory Notes
    
    $
    10,191
    
    
    $
    3,128
    
    
    $
    5,660
    
    
    $
    1,403
    
    
    $
    Operating Leases
    
    
    50,986
    
    
    
    10,069
    
    
    
    27,668
    
    
    
    5,544
    
    
    
    7,705Total Contractual Obligations
    
    $
    61,177
    
    
    $
    13,197
    
    
    $
    33,328
    
    
    $
    6,947
    
    
    $
    7,705
 Effects of Federal Funding for Defense Programs
   Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes
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##### Table of Contents



Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards
 Forward-Looking Statements
  
 Item 3 Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4 Controls and Procedures
 (a)
    
    Evaluation of Disclosure Controls and Procedures
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##### Table of Contents



Changes in Internal Controls
  
 PART II OTHER INFORMATION
 
 Item 1 Legal Proceedings
  
 Item 1A Risk Factors
  
 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
  Issuer Purchases of Equity Securities
 Maximum Number (orTotal
    
    
    
    
    
    Total Number of Shares
    
    Approximate Dollar Value)Number of
    
    Average
    
    Purchased as Part of Publicly
    
    of Shares that May Yet BeShares
    
    Price Paid
    
    Announced Plans or
    
    Purchased Under the PlansPeriod
    
    Purchased
    
    per Share
    
    Programs
    
    or ProgramsApril (4/3/06 -
4/30/06)
    
    
    208,043
    
    
    
    42.51
    
    
    
    80,654
    
    
    
    May (5/1/06 -
5/28/06)
    
    
    85,819
    
    
    
    41.25
    
    
    
    29,468
    
    
    
    $2,764,000June (5/29/06 -
7/2/06)
    
    
    60,302
    
    
    
    41.25
    
    
    
    
    
    
    
    Total
    
    
    354,164
    
    
    
    41.99
    
    
    
    110,122
    
    
    
    $2,764,000
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##### Table of Contents



Item 3 Defaults Upon Senior Securities
  
 Item 4 Submission of Matters to a Vote of Security Holders
    (1)
    
    The election of the following directors by the votes set forth below:
 Number of Votes of Common StockFor
    
    Against/WithheldWayne R. Winton
    
    
    3,167,312
    
    
    
    156,830Robert C. Sepucha
    
    
    3,185,926
    
    
    
    138,216William E. Cook
    
    
    3,165,818
    
    
    
    119,904Rockell N. Hankin
    
    
    3,165,818
    
    
    
    119,904Gen. John L. Piotrowski (USAF Ret.)
    
    
    3,166,202
    
    
    
    120,288Gerald A. Zionic
    
    
    3,169,158
    
    
    
    154,984
 (2)
    
    The ratification, by the votes set forth below, of the appointment of Ernst &
Young LLP as the Companys independent registered public accounting firm for the year
ending December 31, 2006:
 For:
    
    
    3,168,618Against:
    
    
    90Abstain:
    
    
    155,434
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##### Table of Contents



Item 5 Other Information
  
 Item 6 Exhibits
 Exhibit 31.1
    
    Certification of Chief Executive Officer
Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002Exhibit 31.2
    
    Certification of Chief Financial Officer
Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002Exhibit 32.1
    
    Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.Exhibit 32.2
    
    Certification of Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
 - 24 -




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##### Table of Contents



Signature
  SPARTA, INC.(Registrant)Date: August 11, 2006
    
    By:
    
    /s/ David E. SchreimanDavid E. SchreimanVice President andChief Financial Officer(Principal Accounting Officer)
 - 25 -




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##### Table of Contents



Exhibit Index
 Exhibit 31.1
    
    Certification of Chief Executive Officer
Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002Exhibit 31.2
    
    Certification of Chief Financial Officer
Adopted Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002Exhibit 32.1
    
    Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.Exhibit 32.2
    
    Certification of Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
 - 26 -