##### 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 September 30, 2008
 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 0-23585.
 
 SM&A
  Delaware
    
    33-0080929(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)4695 MacArthur Court, 8thFloor, Newport Beach, California
    
    92660(Address of principal executive offices)
    
    (Zip Code)
 (949) 975-1550
 Not applicable
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  o þ




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##### 



SM&A
 INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Condensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Income
    
    
    4Condensed Consolidated Statements of Cash Flows
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 4.
    
    Controls and Procedures
    
    
    15PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    16Item 1A.
    
    Risk Factors
    
    
    16Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    16Item 3.
    
    Defaults Upon Senior Securities
    
    
    16Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    16Item 5.
    
    Other Information
    
    
    16Item 6.
    
    Exhibits
    
    
    16Signatures
    
    
    19EX-2.5EX-2.6EX-31.1EX-31.2EX-32




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 SM&A
CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)Assets:Current assets:Cash and cash equivalents
    
    $
    4,844
    
    
    $
    5,422Investments
    
    
    6,692
    
    
    
    10,610Accounts receivable, net
    
    
    25,193
    
    
    
    18,171Prepaid expenses and other current assets
    
    
    2,683
    
    
    
    2,011Total current assets
    
    
    39,412
    
    
    
    36,214Fixed assets, net
    
    
    3,343
    
    
    
    3,399Goodwill
    
    
    10,767
    
    
    
    8,278Intangibles, net
    
    
    1,558
    
    
    
    1,892Other assets
    
    
    840
    
    
    
    895$
    55,920
    
    
    $
    50,678Liabilities and Stockholders Equity:Current liabilities:Accounts payable
    
    $
    2,039
    
    
    $
    1,925Accrued compensation and related benefits
    
    
    5,158
    
    
    
    2,550Accrued contingent consideration
    
    
    3,859
    
    
    
    2,708Other current liabilities
    
    
    159
    
    
    
    127Total current liabilities
    
    
    11,215
    
    
    
    7,310Other liabilities
    
    
    663
    
    
    
    785Total liabilities
    
    
    11,878
    
    
    
    8,095Commitments and contingenciesStockholders equity:Preferred stock
    
    
    
    
    
    
    Common stock
    
    
    2
    
    
    
    2Additional paid-in capital
    
    
    47,121
    
    
    
    45,450Treasury stock
    
    
    (4,595
    )
    
    
    (1,506
    )Retained earnings (accumulated deficit)
    
    
    1,514
    
    
    
    (1,363
    )Total stockholders equity
    
    
    44,042
    
    
    
    42,583$
    55,920
    
    
    $
    50,678
 See accompanying notes to condensed consolidated financial statements.
 3




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SM&A
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    25,332
    
    
    $
    25,059
    
    
    $
    76,764
    
    
    $
    74,251Cost of revenue
    
    
    15,151
    
    
    
    14,941
    
    
    
    46,564
    
    
    
    45,021Gross margin
    
    
    10,181
    
    
    
    10,118
    
    
    
    30,200
    
    
    
    29,230Selling, general and administrative expenses
    
    
    7,968
    
    
    
    7,095
    
    
    
    25,478
    
    
    
    20,620Operating income
    
    
    2,213
    
    
    
    3,023
    
    
    
    4,722
    
    
    
    8,610Interest income, net
    
    
    41
    
    
    
    80
    
    
    
    158
    
    
    
    301Income before income taxes
    
    
    2,254
    
    
    
    3,103
    
    
    
    4,880
    
    
    
    8,911Income tax expense
    
    
    889
    
    
    
    1,268
    
    
    
    2,003
    
    
    
    3,622Net income
    
    $
    1,365
    
    
    $
    1,835
    
    
    $
    2,877
    
    
    $
    5,289Earnings per share:Basic
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.15
    
    
    $
    0.28Diluted
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.15
    
    
    $
    0.28Shares used in calculating earnings per share:Basic
    
    
    18,423
    
    
    
    18,874
    
    
    
    18,671
    
    
    
    18,758Diluted
    
    
    18,480
    
    
    
    19,021
    
    
    
    18,763
    
    
    
    18,930
 See accompanying notes to condensed consolidated financial statements.
 4




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SM&A
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine Months EndedSeptember 30,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    2,877
    
    
    $
    5,289Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    932
    
    
    
    907Loss on disposal of assets
    
    
    32
    
    
    
    Stock-based compensation expense
    
    
    1,276
    
    
    
    1,335Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    (118
    )Deferred income taxes
    
    
    69
    
    
    
    (291
    )Changes in operating assets and liabilities, net of business acquisitions:Accounts receivable
    
    
    (7,022
    )
    
    
    (6,272
    )Prepaid expenses and other assets
    
    
    (686
    )
    
    
    (451
    )Accounts payable
    
    
    114
    
    
    
    (847
    )Accrued compensation and related benefits
    
    
    2,608
    
    
    
    1,696Accrued contingent consideration
    
    
    1,151
    
    
    
    Other liabilities
    
    
    (90
    )
    
    
    386Net cash provided by operating activities
    
    
    1,261
    
    
    
    1,634Cash flows from investing activities:Purchases of fixed assets
    
    
    (574
    )
    
    
    (926
    )Purchases of marketable securities
    
    
    (12,969
    )
    
    
    (16,520
    )Proceeds from sale of marketable securities
    
    
    16,887
    
    
    
    10,000Cost of acquisitions, net of cash acquired
    
    
    (2,489
    )
    
    
    (6,455
    )Net cash provided by (used in) investing activities
    
    
    855
    
    
    
    (13,901
    )Cash flows from financing activities:Proceeds from issuance of common stock
    
    
    395
    
    
    
    666Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    118Payment for repurchase of shares
    
    
    (3,089
    )
    
    
    (842
    )Net cash used in financing activities
    
    
    (2,694
    )
    
    
    (58
    )Net decrease in cash and cash equivalents from continued operations
    
    
    (578
    )
    
    
    (12,325
    )Net cash used in discontinued operations by operating activities
    
    
    
    
    
    
    (42
    )Net decrease in cash and cash equivalents
    
    
    (578
    )
    
    
    (12,367
    )Cash and cash equivalents at beginning of period
    
    
    5,422
    
    
    
    15,143Cash and cash equivalents at end of period
    
    $
    4,844
    
    
    $
    2,776Supplemental informationcash paid for:Income taxes
    
    $
    2,691
    
    
    $
    4,057Supplemental disclosure of non-cash transactions:Common stock issued for an acquisition
    
    $
    
    
    
    $
    2,716Common stock issued to an employee
    
    $
    
    
    
    $
    50Common stock issued to non-employee directors
    
    $
    39
    
    
    $
    Assets acquired under a capital lease
    
    $
    
    
    
    $
    160
 See accompanying notes to condensed consolidated financial statements.
 5




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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30, 2008 and 2007
 Note 1. Basis of Presentation
    Reclassifications
  Recent Accounting Pronouncements
 Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active
 The
Hierarchy of Generally Accepted Accounting Principles The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.
 Business Combinations
 6




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##### Table of Contents



Note 2. Earnings Per Share
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands, except per share amounts)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Net income
    
    $
    1,365
    
    
    $
    1,835
    
    
    $
    2,877
    
    
    $
    5,289Denominator:Weighted average shares outstanding
    
    
    18,423
    
    
    
    18,874
    
    
    
    18,671
    
    
    
    18,758Effect of dilutive outstanding stock options
    
    
    57
    
    
    
    147
    
    
    
    92
    
    
    
    172Denominator for diluted income per share
    
    
    18,480
    
    
    
    19,021
    
    
    
    18,763
    
    
    
    18,930Basic earnings per share
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.15
    
    
    $
    0.28Dilutive earnings per share
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.15
    
    
    $
    0.28Anti-dilutive shares excluded from the
foregoing reconciliation
    
    
    2,429
    
    
    
    1,658
    
    
    
    2,425
    
    
    
    1,535
 Note 3. Investments in Marketable Securities
  Note 4. Stock-Based Compensation
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Stock price volatility
    
    
    40.6
    %
    
    
    42.0
    %
    
    
    35.6
    %
    
    
    59.0
    %Risk-free interest rate
    
    
    2.3
    %
    
    
    4.4
    %
    
    
    2.6
    %
    
    
    4.7
    %Expected life (in years)
    
    
    2.7
    
    
    
    3.6
    
    
    
    3.1
    
    
    
    3.7Forfeiture rate
    
    
    10.0
    %
    
    
    10.5
    %
    
    
    10.4
    %
    
    
    9.8
    %Stock dividend yield
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/AWeighted-average fair value per option granted
    
    $
    0.95
    
    
    $
    2.58
    
    
    $
    1.36
    
    
    $
    3.11
  Weighted-
    
    
    Weighted-Average
    
    
    AggregateAverage
    
    
    Fair Value of
    
    
    IntrinsicActivity
    
    Shares
    
    
    Exercise Price
    
    
    Options Granted
    
    
    ValueOutstanding at December 31, 2007
    
    
    2,272,448
    
    
    $
    7.43Granted
    
    
    637,428
    
    
    
    5.16
    
    
    $
    1.36Exercised
    
    
    250
    
    
    
    2.50Cancelled, Forfeited or Expired
    
    
    (255,350
    )
    
    
    7.74Outstanding at September 30, 2008
    
    
    2,654,276
    
    
    
    6.86
    
    
    
    
    
    
    $
    95,000Exercisable at September 30, 2008
    
    
    1,400,876
    
    
    $
    7.63
    
    
    
    
    
    
    $
    93,000
   7




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Note 5. Acquisitions
   Unaudited Pro Forma Financial Information
   Three Months Ended
    
    Nine Months Ended(in thousands, except per share amounts)
    
    September 30, 2007
    
    September 30, 2007Revenue
    
    $
    25,973
    
    
    $
    78,579Net income
    
    $
    1,824
    
    
    $
    5,256Pro forma earnings per share:Basic
    
    $
    0.10
    
    
    $
    0.28Diluted
    
    $
    0.10
    
    
    $
    0.28
 Note 6. Intangible Assets and Goodwill
  Note 7. Income Taxes
  Note 8. Credit Facility
  8




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Note 9. Stockholders Equity
   Common Stock and
    
    
    
    
    
    
    Retained EarningsCommon
    
    
    Additional Paid-In
    
    
    Treasury
    
    
    (Accumulated
    
    
    Stockholders(in thousands, except share data)
    
    Shares
    
    
    Capital
    
    
    Stock
    
    
    Deficit)
    
    
    EquityBalances at December 31, 2007
    
    
    18,998,110
    
    
    $
    45,452
    
    
    $
    (1,506
    )
    
    $
    (1,363
    )
    
    $
    42,583Proceeds from the issuance of
common stock
    
    
    82,161
    
    
    
    395
    
    
    
    
    
    
    
    
    
    
    
    395Stock-based compensation expense
    
    
    
    
    
    
    1,276
    
    
    
    
    
    
    
    
    
    
    
    1,276Repurchased treasury shares
    
    
    (654,236
    )
    
    
    
    
    
    
    (3,089
    )
    
    
    
    
    
    
    (3,089
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,877
    
    
    
    2,877Balances at September 30, 2008
    
    
    18,426,035
    
    
    $
    47,123
    
    
    $
    (4,595
    )
    
    $
    1,514
    
    
    $
    44,042
  Note 10. Commitments and Contingencies
    9




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##### Table of Contents



Note 11. Subsequent Events
  10




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statements
 
 How to Obtain SM&A SEC Filings
  Our Company
  Competition Management
 Program Services
  11




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##### Table of Contents



Results of Operations
 Three and Nine Months Ended September 30, 2008 and 2007
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in millions)
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeRevenue
    
    $
    25.3
    
    
    $
    25.1
    
    
    
    0.8
    %
    
    $
    76.8
    
    
    $
    74.2
    
    
    
    3.5
    %Cost of revenue
    
    
    15.1
    
    
    
    15.0
    
    
    
    0.7
    
    
    
    46.6
    
    
    
    45.0
    
    
    
    3.6Gross margin
    
    
    10.2
    
    
    
    10.1
    
    
    
    1.0
    
    
    
    30.2
    
    
    
    29.2
    
    
    
    3.4Selling, general and administrative expenses
    
    
    8.0
    
    
    
    7.1
    
    
    
    12.7
    
    
    
    25.5
    
    
    
    20.6
    
    
    
    23.8Operating income
    
    
    2.2
    
    
    
    3.0
    
    
    
    (26.7
    )
    
    
    4.7
    
    
    
    8.6
    
    
    
    (45.3
    )Interest income, net
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    0.2
    
    
    
    0.3
    
    
    
    (33.3
    )Income tax expense
    
    
    0.9
    
    
    
    1.3
    
    
    
    (30.8
    )
    
    
    2.0
    
    
    
    3.6
    
    
    
    (44.4
    )Net income
    
    $
    1.4
    
    
    $
    1.8
    
    
    
    (22.2)
    %
    
    $
    2.9
    
    
    $
    5.3
    
    
    
    (45.3)
    %
 Revenue
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,(in millions)
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeRevenues by Service LineCompetition Management
    
    $
    10.2
    
    
    $
    13.6
    
    
    
    (25.0
    )%
    
    $
    34.1
    
    
    $
    42.9
    
    
    
    (20.5
    )%Program Services
    
    
    15.1
    
    
    
    11.5
    
    
    
    31.3
    
    
    
    42.7
    
    
    
    31.3
    
    
    
    36.4Total
    
    $
    25.3
    
    
    $
    25.1
    
    
    
    0.8
    %
    
    $
    76.8
    
    
    $
    74.2
    
    
    
    3.5
    %Revenues by Market VerticalAerospace and defense
    
    $
    20.1
    
    
    $
    18.1
    
    
    
    11.0
    %
    
    $
    60.7
    
    
    $
    58.0
    
    
    
    4.7
    %Non-aerospace and defense
    
    
    5.2
    
    
    
    7.0
    
    
    
    (25.7
    )
    
    
    16.1
    
    
    
    16.2
    
    
    
    (0.6
    )Total
    
    $
    25.3
    
    
    $
    25.1
    
    
    
    0.8
    %
    
    $
    76.8
    
    
    $
    74.2
    
    
    
    3.5
    %
    12




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Gross Margin
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    25.3
    
    
    $
    25.1
    
    
    $
    76.8
    
    
    $
    74.2Cost of revenue
    
    
    15.1
    
    
    
    15.0
    
    
    
    46.6
    
    
    
    45.0Gross margin
    
    $
    10.2
    
    
    $
    10.1
    
    
    $
    30.2
    
    
    $
    29.2Gross margin percentage
    
    
    40.2
    %
    
    
    40.4
    %
    
    
    39.3
    %
    
    
    39.4
    %
  Selling, General and Administrative Expenses (SG&A)
    13




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##### Table of Contents



Three Months Ended September 30,
    
    
    Nine Months Ended September 30,(in millions)
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeSG&A before the segregated expenses below
    
    $
    5.3
    
    
    $
    5.6
    
    
    
    (5.4
    )%
    
    $
    15.8
    
    
    $
    16.8
    
    
    
    (6.0
    )%Recurring SG&A:Stock-based compensation
    
    
    0.4
    
    
    
    0.4
    
    
    
    0.0
    
    
    
    1.3
    
    
    
    1.3
    
    
    
    0.0PPI and PMA SG&A
    
    
    1.1
    
    
    
    0.5
    
    
    
    120.0
    
    
    
    3.1
    
    
    
    1.2
    
    
    
    158.3Strategic Advisors SG&A
    
    
    0.2
    
    
    
    
    
    
    
    100.0
    
    
    
    0.7
    
    
    
    
    
    
    
    100.0Subtotal
    
    
    1.7
    
    
    
    0.9
    
    
    
    88.9
    
    
    
    5.1
    
    
    
    2.5
    
    
    
    104.0Non-recurring SG&A:Earn-out amount earned by the principal of PPI
    
    
    0.7
    
    
    
    
    
    
    
    100.0
    
    
    
    2.3
    
    
    
    
    
    
    
    100.0Transaction expenses
    
    
    0.3
    
    
    
    
    
    
    
    100.0
    
    
    
    0.3
    
    
    
    
    
    
    
    100.0Proxy contest expenses
    
    
    0.0
    
    
    
    
    
    
    
    100.0
    
    
    
    0.9
    
    
    
    
    
    
    
    100.0Company-wide offsite training conference fees
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    1.1
    
    
    
    
    
    
    
    100.0Management transition related expenses
    
    
    
    
    
    
    0.6
    
    
    
    (100.0
    )
    
    
    
    
    
    
    1.3
    
    
    
    (100.0
    )Subtotal
    
    
    1.0
    
    
    
    0.6
    
    
    
    66.7
    
    
    
    4.6
    
    
    
    1.3
    
    
    
    253.8Total SG&A
    
    $
    8.0
    
    
    $
    7.1
    
    
    
    12.7
    %
    
    $
    25.5
    
    
    $
    20.6
    
    
    
    23.8
    %
  Operating Income
  Income Tax Expense
  Liquidity and Capital Resources
  (in thousands)
    
    September 30, 2008
    
    December 31, 2007Cash, cash equivalents, and short-term investments
    
    $
    11,536
    
    
    $
    16,032Accounts receivable, net
    
    $
    25,193
    
    
    $
    18,171Prepaid expenses and other current assets
    
    $
    2,683
    
    
    $
    2,011Working capital
    
    $
    28,197
    
    
    $
    28,904
  14




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Controls
  15




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##### Table of Contents



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
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibits
 2.1
    
    Stock Purchase Agreement, by and among Project Planning, Inc., Richard Bowe, its Shareholder, and SM&A.
Filed on February 12, 2007 as Exhibit 99.2 to the registrants Current Report on Form 8-K and incorporated herein by
reference.2.2
    
    Stock Purchase Agreement, by and among Performance Management Associates, Inc., James A.
Wrisley and Paulette Wrisley, its Shareholders, and SM&A.
Filed on September 19, 2007 as Exhibit 10.1 to the registrants Current Report on Form 8-K and
incorporated herein by reference.2.3
    
    Amendment to Stock Purchase Agreement, by and among Performance Management Associates,
Inc., James A. Wrisley and Paulette Wrisley, its Shareholders, and SM&A.
Filed on March 7, 2008 as Exhibit 2.3 to the registrants Annual Report on Form 8-K and
incorporated herein by reference.2.4
    
    Amendment to Stock Purchase Agreement, by and among Project Planning, Inc., Richard Bowe,
its Shareholder, and SM&A.
Filed on May 9, 2008 as Exhibit 2.4 to the registrants report on Form 10-Q and incorporated
herein by reference.2.5
    
    Certificate of Merger of Foreign Corporation into a Domestic Corporation, as filed with
the Secretary of State of the State of Delaware on October 21, 2008, pursuant to which SM&As
wholly owned subsidiary Project Planning, Inc. was merged with and into SM&A, with SM&A
surviving.
Filed herewith.
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##### Table of Contents



2.6
    
    Certificate of Merger of Foreign Corporation into a Domestic Corporation, as filed with
the Secretary of State of the State of Delaware on October 21, 2008, pursuant to which SM&As
wholly owned subsidiary Performance Management Associates was merged with and into SM&A, with
SM&A surviving.
Filed herewith.2.7
    
    Agreement and Plan of Merger by and among SM&A, Project Victor Holdings, Inc. and Project Victor Merger Sub, Inc.
Filed on October 31, 2008 as Exhibit 2.1 to the registrants Current Report on Form 8-K and incorporated herein by
reference.3.1
    
    Certificate of Incorporation of SM&A, a Delaware corporation.
Filed on December 6, 2006 as Exhibit 3.1 to the registrants Current Report on Form 8-K and
incorporated herein by reference.3.2
    
    Bylaws of SM&A, a Delaware corporation.
Filed on December 6, 2006 as Exhibit 3.3 to the registrants Current Report on Form 8-K and
incorporated herein by reference.3.3
    
    Agreement and Plan of Merger, between SM&A, a California corporation, and SM&A, a Delaware corporation.
Filed on December 6, 2006 as Exhibit 2.1 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.1
    
    Amendment No. 1 to Employment Agreement of Cathy L. McCarthy.
Filed on January 17, 2008 as Exhibit 99.1 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.2
    
    Amendment No. 2 to Employment Agreement of Cathy L. McCarthy dated August 28, 2008 by and
between SM&A and Cathy L. McCarthy.
Filed on August 29, 2008 as Exhibit 10.1 to the registrants Current Report on Form 8-K and
incorporated herein by reference.10.3
    
    Executive Severance & Retention Agreement dated August 25, 2008 by and between SM&A and Cathy L. McCarthy.
Filed on August 29, 2008 as Exhibit 10.2 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.4
    
    Employment Agreement of Peter Pace.
Filed on January 24, 2008 as Exhibit 99.1 to the registrants Current Report on Form 8-K and
incorporated herein by reference.10.5
    
    Amendment No. 1 to Employment Agreement of Peter Pace dated August 28, 2008 by and between SM&A and Peter Pace.
Filed on August 29, 2008 as Exhibit 10.3 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.6
    
    Executive Severance & Retention Agreement dated August 25, 2008 by and between SM&A and Peter Pace.
Filed on August 29, 2008 as Exhibit 10.4 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.7
    
    Form of Executive Severance & Retention Agreement of SM&A.
Filed on August 29, 2008 as Exhibit 10.5 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.8
    
    Executive Retention Agreement of SM&A dated August 25, 2008 by and between SM&A and Daniel Hart.
Filed on August 29, 2008 as Exhibit 10.6 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.9
    
    Agreement entered into as of May 21, 2008 by and between Steven S. Myers and SM&A, a Delaware corporation.
Filed on May 23, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and incorporated herein by reference.10.10
    
    Amendment 1 to Settlement Agreement entered into as of August 6, 2008 by and between
Steven S. Myers and SM&A, a Delaware corporation.
Filed on August 8, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.10.11
    
    Amendment 2 to Settlement Agreement entered into as of September 30, 2008 by and between
Steven S. Myers and SM&A, a Delaware corporation.
Filed on October 1, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.10.12
    
    Amendment 3 to Settlement Agreement entered into as of October 17, 2008 by and between
Steven S. Myers and SM&A, a Delaware corporation.
Filed on October 20, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.10.13
    
    Credit Agreement dated May 1, 2008 between City National Bank and SM&A, a Delaware
corporation.
Filed on May 6, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.
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##### Table of Contents



10.14
    
    Amendment 4 to Settlement Agreement entered into as of October 28, 2008 by and between
Steven S. Myers and SM&A, a Delaware corporation.
Filed on October 31, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.31.1
    
    Certificate of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.31.2
    
    Certificate of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.32
    
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
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##### Table of Contents



SIGNATURES
  SM&A(Registrant)Dated: November 7, 2008
    
    By:
    
    /s/ JAMES R. ECKSTAEDTJames R. EckstaedtExecutive Vice President, Financeand Chief Financial OfficerDated: November 7, 2008
    
    By:
    
    /s/ CATHY MCCARTHYCathy McCarthyPresident and Chief Executive Officer
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##### Table of Contents



EXHIBIT INDEX
 Exhibits
    
    Description2.1
    
    Stock Purchase Agreement, by and among Project Planning, Inc., Richard Bowe, its Shareholder, and SM&A.
Filed on February 12, 2007 as Exhibit 99.2 to the registrants Current Report on Form 8-K and incorporated herein by
reference.2.2
    
    Stock Purchase Agreement, by and among Performance Management Associates, Inc., James A.
Wrisley and Paulette Wrisley, its Shareholders, and SM&A.
Filed on September 19, 2007 as Exhibit 10.1 to the registrants Current Report on Form 8-K and
incorporated herein by reference.2.3
    
    Amendment to Stock Purchase Agreement, by and among Performance Management Associates,
Inc., James A. Wrisley and Paulette Wrisley, its Shareholders, and SM&A.
Filed on March 7, 2008 as Exhibit 2.3 to the registrants Annual Report on Form 8-K and
incorporated herein by reference.2.4
    
    Amendment to Stock Purchase Agreement, by and among Project Planning, Inc., Richard Bowe,
its Shareholder, and SM&A.
Filed on May 9, 2008 as Exhibit 2.4 to the registrants report on Form 10-Q and incorporated
herein by reference.2.5
    
    Certificate of Merger of Foreign Corporation into a Domestic Corporation, as filed with
the Secretary of State of the State of Delaware on October 21, 2008, pursuant to which SM&As
wholly owned subsidiary Project Planning, Inc. was merged with and into SM&A, with SM&A
surviving.
Filed herewith.
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##### Table of Contents



Exhibits
    
    Description2.6
    
    Certificate of Merger of Foreign Corporation into a Domestic Corporation, as filed with
the Secretary of State of the State of Delaware on October 21, 2008, pursuant to which SM&As
wholly owned subsidiary Performance Management Associates was merged with and into SM&A, with
SM&A surviving.
Filed herewith.2.7
    
    Agreement and Plan of Merger by and among SM&A, Project Victor Holdings, Inc. and Project Victor Merger Sub, Inc.
Filed on October 31, 2008 as Exhibit 2.1 to the registrants Current Report on Form 8-K and incorporated herein by
reference.3.1
    
    Certificate of Incorporation of SM&A, a Delaware corporation.
Filed on December 6, 2006 as Exhibit 3.1 to the registrants Current Report on Form 8-K and
incorporated herein by reference.3.2
    
    Bylaws of SM&A, a Delaware corporation.
Filed on December 6, 2006 as Exhibit 3.3 to the registrants Current Report on Form 8-K and
incorporated herein by reference.3.3
    
    Agreement and Plan of Merger, between SM&A, a California corporation, and SM&A, a Delaware corporation.
Filed on December 6, 2006 as Exhibit 2.1 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.1
    
    Amendment No. 1 to Employment Agreement of Cathy L. McCarthy.
Filed on January 17, 2008 as Exhibit 99.1 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.2
    
    Amendment No. 2 to Employment Agreement of Cathy L. McCarthy dated August 28, 2008 by and
between SM&A and Cathy L. McCarthy.
Filed on August 29, 2008 as Exhibit 10.1 to the registrants Current Report on Form 8-K and
incorporated herein by reference.10.3
    
    Executive Severance & Retention Agreement dated August 25, 2008 by and between SM&A and Cathy L. McCarthy.
Filed on August 29, 2008 as Exhibit 10.2 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.4
    
    Employment Agreement of Peter Pace.
Filed on January 24, 2008 as Exhibit 99.1 to the registrants Current Report on Form 8-K and
incorporated herein by reference.10.5
    
    Amendment No. 1 to Employment Agreement of Peter Pace dated August 28, 2008 by and between SM&A and Peter Pace.
Filed on August 29, 2008 as Exhibit 10.3 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.6
    
    Executive Severance & Retention Agreement dated August 25, 2008 by and between SM&A and Peter Pace.
Filed on August 29, 2008 as Exhibit 10.4 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.7
    
    Form of Executive Severance & Retention Agreement of SM&A.
Filed on August 29, 2008 as Exhibit 10.5 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.8
    
    Executive Retention Agreement of SM&A dated August 25, 2008 by and between SM&A and Daniel Hart.
Filed on August 29, 2008 as Exhibit 10.6 to the registrants Current Report on Form 8-K and incorporated herein by
reference.10.9
    
    Agreement entered into as of May 21, 2008 by and between Steven S. Myers and SM&A, a Delaware corporation.
Filed on May 23, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and incorporated herein by reference.10.10
    
    Amendment 1 to Settlement Agreement entered into as of August 6, 2008 by and between
Steven S. Myers and SM&A, a Delaware corporation.
Filed on August 8, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.10.11
    
    Amendment 2 to Settlement Agreement entered into as of September 30, 2008 by and between
Steven S. Myers and SM&A, a Delaware corporation.
Filed on October 1, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.10.12
    
    Amendment 3 to Settlement Agreement entered into as of October 17, 2008 by and between
Steven S. Myers and SM&A, a Delaware corporation.
Filed on October 20, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.10.13
    
    Credit Agreement dated May 1, 2008 between City National Bank and SM&A, a Delaware
corporation.
Filed on May 6, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.
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##### Table of Contents



Exhibits
    
    Description10.14
    
    Amendment 4 to Settlement Agreement entered into as of October 28, 2008 by and between
Steven S. Myers and SM&A, a Delaware corporation.
Filed on October 31, 2008 as Exhibit 10.1 to the registrants current report on Form 8-K and
incorporated herein by reference.31.1
    
    Certificate of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.31.2
    
    Certificate of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.32
    
    Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
 22