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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the Quarterly Period Ended March 31, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------

For the transition period from  to

Commission File Number 0-30911





THE PBSJ CORPORATION

(Exact name of Registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 59-1494168                          
|(State or other jurisdiction of Incorporation or organization) |  | (I.R.S. Employer Identification No.)

5300 West Cypress Street, Suite 200

Tampa, Florida 33607

(Address of principal executive offices)

(813) 282-7275

(Registrants telephone number, including area code)





Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    x  Yes     ̈  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer
and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                           
|-------------------------- |  | --------------------------
| ̈  Large accelerated filer |  |  ̈  Accelerated filer      
|x  Non-accelerated filer   |  |  ̈  Small Reporting Company

(Do not check if Smaller Reporting Company)

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act).     ̈  Yes    x  No

As of April 30, 2008, there were 6,347,041 shares of Common Stock Class A, $.00067 par value per
share, outstanding.









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##### Table of Contents

THE PBSJ CORPORATION

Form 10-Q

For the Quarterly Period Ended March 31, 2008

Table of Contents



|            |  |                                                                                       |  |     
|----------- |  | ------------------------------------------------------------------------------------- |  | ----
|Item Number |  | CAPTION                                                                               |  | PAGE
|PART 1:     |  | FINANCIAL INFORMATION                                                                 |  |     
|            |  |                                                                                      
|Item 1.     |  | Condensed Consolidated Financial Statements (Unaudited)                               |  | 3   
|            |  |                                                                                      
|Item 2.     |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 19  
|            |  |                                                                                      
|Item 3.     |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 43  
|            |  |                                                                                      
|Item 4.     |  | Controls and Procedures                                                               |  | 43  
|            |  |                                                                                      
|PART II:    |  | OTHER INFORMATION                                                                     |  |     
|            |  |                                                                                      
|Item 1.     |  | Legal proceedings                                                                     |  | 45  
|            |  |                                                                                      
|Item 1A.    |  | Risk Factors                                                                          |  | 46  
|            |  |                                                                                      
|Item 2.     |  | Issuer Purchases of Equity Securities by Issuer and Affiliated Purchasers             |  | 47  
|            |  |                                                                                      
|Item 3.     |  | Defaults Upon Senior Securities                                                       |  | 47  
|            |  |                                                                                      
|Item 4.     |  | Submission of Matters to a Vote of Security Holders                                   |  | 47  
|            |  |                                                                                      
|Item 5.     |  | Other Information                                                                     |  | 47  
|            |  |                                                                                      
|Item 6.     |  | Exhibits                                                                              |  | 47  
|            | 
|SIGNATURES  |  |                                                                                      



2



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##### Table of Contents

PART 1 FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

THE PBSJ CORPORATION

Condensed Consolidated Balance Sheets (Unaudited)



|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ----------------- | - | ------- | -
|(Amounts in thousands, except share and per share amounts)                                                                                                  |  | March 31,2008 |         |   | September 30,2007 |  
|Assets                                                                                                                                                      |  |               |         |   |                   |   |         |  
|Current Assets:                                                                                                                                             |  |               |         |   |                   |   |         |  
|Cash and cash equivalents                                                                                                                                   |  | $             | 267     |   |                   | $ | 8,481   |  
|Accounts receivable, net                                                                                                                                    |  |               | 85,081  |   |                   |   | 83,485  |  
|Unbilled fees                                                                                                                                               |  |               | 105,146 |   |                   |   | 78,511  |  
|Other current assets                                                                                                                                        |  |               | 8,435   |   |                   |   | 3,183   |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total current assets                                                                                                                                        |  |               | 198,929 |   |                   |   | 173,660 |  
|Property and equipment, net                                                                                                                                 |  |               | 36,753  |   |                   |   | 34,932  |  
|Cash surrender value of life insurance                                                                                                                      |  |               | 11,297  |   |                   |   | 10,687  |  
|Deferred income taxes, non current                                                                                                                          |  |               |        |   |                   |   | 11,558  |  
|Goodwill                                                                                                                                                    |  |               | 23,652  |   |                   |   | 21,692  |  
|Intangible assets, net                                                                                                                                      |  |               | 694     |   |                   |   | 886     |  
|Other assets                                                                                                                                                |  |               | 4,844   |   |                   |   | 4,954   |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total assets                                                                                                                                                |  | $             | 276,169 |   |                   | $ | 258,369 |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Liabilities and Stockholders Equity                                                                                                                        |  |               |         |   |                   |   |         |  
|Current Liabilities:                                                                                                                                        |  |               |         |   |                   |   |         |  
|Accounts payable and accrued expenses                                                                                                                       |  | $             | 89,763  |   |                   | $ | 85,135  |  
|Stock redemption payable                                                                                                                                    |  |               | 12,323  |   |                   |   |        |  
|Accrued reimbursement liability                                                                                                                             |  |               | 3,390   |   |                   |   | 8,385   |  
|Current portion of long-term debt                                                                                                                           |  |               | 20,154  |   |                   |   | 512     |  
|Current portion of capital leases                                                                                                                           |  |               | 813     |   |                   |   | 347     |  
|Accrued vacation                                                                                                                                            |  |               | 11,992  |   |                   |   | 12,518  |  
|Billings in excess of costs                                                                                                                                 |  |               | 3,285   |   |                   |   | 3,943   |  
|Deferred income taxes, current                                                                                                                              |  |               | 832     |   |                   |   | 27,909  |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total current liabilities                                                                                                                                   |  |               | 142,552 |   |                   |   | 138,749 |  
|Deferred income taxes, non current                                                                                                                          |  |               | 7,236   |   |                   |   |        |  
|Long-term debt, less current portion                                                                                                                        |  |               | 6,141   |   |                   |   | 6,397   |  
|Capital leases, less current portion                                                                                                                        |  |               | 239     |   |                   |   | 358     |  
|Deferred compensation                                                                                                                                       |  |               | 14,639  |   |                   |   | 13,364  |  
|Other liabilities                                                                                                                                           |  |               | 35,239  |   |                   |   | 21,405  |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total liabilities                                                                                                                                           |  |               | 206,046 |   |                   |   | 180,273 |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Stockholders Equity:                                                                                                                                       |  |               |         |   |                   |   |         |  
|Common stock, par value $0.00067, 15,000,000 shares authorized, 6,862,009 shares issued and outstanding at September 30,
2007                               |  |               |        |   |                   |   | 5       |  
|Common stock Class A, par value $0.00067, 15,000,000 shares authorized, 6,348,829 shares issued and outstanding at March 31, 2008                           |  |               | 4       |   |                   |   |        |  
|Common stock Class B, non-voting, par value $0.00067, 5,000,000 shares authorized, no shares issued or outstanding at March 31, 2008 and
September 30, 2007 |  |               |        |   |                   |   |        |  
|Preferred stock, par value $0.001, 10,000,000 shares authorized, no shares issued or outstanding at March 31, 2008 and September 30,
2007                   |  |               |        |   |                   |   |        |  
|Retained earnings                                                                                                                                           |  |               | 73,872  |   |                   |   | 81,040  |  
|Accumulated other comprehensive loss                                                                                                                        |  |               | (1,209  | ) |                   |   | (1,246  | )
|Employee shareholders loans and receivables, unearned compensation and other                                                                               |  |               | (2,544  | ) |                   |   | (1,703  | )
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total stockholders equity                                                                                                                                  |  |               | 70,123  |   |                   |   | 78,096  |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  
|Total liabilities and stockholders equity                                                                                                                  |  | $             | 276,169 |   |                   | $ | 258,369 |  
|                                                                                                                                                            |  |               |         |   |                   |   |         |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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THE PBSJ CORPORATION

Condensed Consolidated Statements of Operations (Unaudited)



|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|---------------------------------------------------------------- |  | --------------------------- | ------- | - | ------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                 |  | Three Months EndedMarch 31, |         |   | Six Months EndedMarch 31, |  
|(Amounts in thousands, except per share amounts)                 |  | 2008                        |         |   | 2007                      |   |         | 2008 |  |   | 2007    |  
|Earned revenue:                                                  |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Engineering fees                                                 |  | $                           | 155,832 |   |                           | $ | 147,170 |      |  | $ | 300,209 |   |  | $ | 276,884 |  
|Direct reimbursable expenses                                     |  |                             | 37,491  |   |                           |   | 28,092  |      |  |   | 70,503  |   |  |   | 56,667  |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Net earned revenue                                               |  |                             | 118,341 |   |                           |   | 119,078 |      |  |   | 229,706 |   |  |   | 220,217 |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Costs and expenses:                                              |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Direct salaries and direct costs                                 |  |                             | 42,580  |   |                           |   | 44,262  |      |  |   | 82,157  |   |  |   | 81,599  |  
|General and administrative expenses, including indirect salaries |  |                             | 70,843  |   |                           |   | 65,206  |      |  |   | 138,371 |   |  |   | 128,682 |  
|Insurance proceeds and gain on recoveries                        |  |                             |        |   |                           |   | (2,000  | )    |  |   |        |   |  |   | (1,977  | )
|Investigation and related costs                                  |  |                             |        |   |                           |   | 1,218   |      |  |   |        |   |  |   | 3,239   |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Total costs and expenses                                         |  |                             | 113,423 |   |                           |   | 108,686 |      |  |   | 220,528 |   |  |   | 211,543 |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Operating income                                                 |  |                             | 4,918   |   |                           |   | 10,392  |      |  |   | 9,178   |   |  |   | 8,674   |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Other income (expense):                                          |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Interest expense                                                 |  |                             | (254    | ) |                           |   | (157    | )    |  |   | (361    | ) |  |   | (562    | )
|Other, net                                                       |  |                             | 26      |   |                           |   | 28      |      |  |   | 108     |   |  |   | 45      |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Total other income (expense)                                     |  |                             | (228    | ) |                           |   | (129    | )    |  |   | (253    | ) |  |   | (517    | )
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Income before income taxes                                       |  |                             | 4,690   |   |                           |   | 10,263  |      |  |   | 8,925   |   |  |   | 8,157   |  
|Provision for income taxes                                       |  |                             | 2,116   |   |                           |   | 4,815   |      |  |   | 4,227   |   |  |   | 4,126   |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Net income                                                       |  | $                           | 2,574   |   |                           | $ | 5,448   |      |  | $ | 4,698   |   |  | $ | 4,031   |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Net income per share:                                            |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                            |  | $                           | 0.42    |   |                           | $ | 0.88    |      |  | $ | 0.75    |   |  | $ | 0.65    |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                          |  | $                           | 0.41    |   |                           | $ | 0.82    |      |  | $ | 0.74    |   |  | $ | 0.60    |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Weighted average shares outstanding:                             |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                            |  |                             | 6,150   |   |                           |   | 6,162   |      |  |   | 6,239   |   |  |   | 6,218   |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                          |  |                             | 6,290   |   |                           |   | 6,618   |      |  |   | 6,382   |   |  |   | 6,682   |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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THE PBSJ CORPORATION

Condensed Consolidated Statements of Cash Flows (Unaudited)



|                                                                              |  |                           |         |   |      |   |          |  
|----------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | -------- | -
|                                                                              |  | Six Months EndedMarch 31, |        
|(Amounts in thousands)                                                        |  | 2008                      |         |   | 2007 |  
|Cash flows from operating activities:                                         |  |                           |         |   |      |   |          |  
|Net income                                                                    |  | $                         | 4,698   |   |      | $ | 4,031    |  
|Adjustments to reconcile net income to net cash used in operating activities: |  |                           |         |   |      |   |          |  
|Increase in cash surrender value of life insurance                            |  |                           |        |   |      |   | (114     | )
|Depreciation and amortization                                                 |  |                           | 4,797   |   |      |   | 5,664    |  
|Provision for bad debts and unbillable amounts                                |  |                           | 87      |   |      |   | 322      |  
|Provision for deferred income taxes                                           |  |                           | 7,383   |   |      |   | 9,922    |  
|Amortization of deferred compensation and other changes                       |  |                           | 1,690   |   |      |   | 926      |  
|Excess tax benefit on vesting of restricted stock                             |  |                           | (1,274  | ) |      |   |         |  
|Reversal of accrued reimbursement liability                                   |  |                           | (2,148  | ) |      |   | (551     | )
|Changes in:                                                                   |  |                           |         |   |      |   |          |  
|Operating working capital                                                     |  |                           | (28,441 | ) |      |   | (36,160  | )
|Non current assets and liabilities                                            |  |                           | (1,681  | ) |      |   | (1,273   | )
|                                                                              |  |                           |         |   |      |   |          |  
|Net cash used in operating activities                                         |  |                           | (14,889 | ) |      |   | (17,233  | )
|                                                                              |  |                           |         |   |      |   |          |  
|Cash flows from investing activities:                                         |  |                           |         |   |      |   |          |  
|Investment in life insurance policies                                         |  |                           | (610    | ) |      |   | (347     | )
|Acquisitions and purchase price adjustments, net of cash acquired             |  |                           | (1,999  | ) |      |   | (314     | )
|Proceeds from sales of property and equipment                                 |  |                           | 28      |   |      |   |         |  
|Purchases of property and equipment                                           |  |                           | (6,165  | ) |      |   | (5,136   | )
|                                                                              |  |                           |         |   |      |   |          |  
|Net cash used in investing activities                                         |  |                           | (8,746  | ) |      |   | (5,797   | )
|                                                                              |  |                           |         |   |      |   |          |  
|Cash flows from financing activities:                                         |  |                           |         |   |      |   |          |  
|Borrowings under line of credit                                               |  |                           | 45,956  |   |      |   | 134,771  |  
|Payments under line of credit                                                 |  |                           | (26,313 | ) |      |   | (107,409 | )
|Principal payments under mortgage note and capital lease obligations          |  |                           | (740    | ) |      |   | (447     | )
|Excess tax benefit on vesting of restricted stock                             |  |                           | 1,274   |   |      |   |         |  
|Common stock:                                                                 |  |                           |         |   |      |   |          |  
|Collection of employee shareholders loans                                    |  |                           | 3,027   |   |      |   | 15       |  
|Payments for repurchase of common stock                                       |  |                           | (7,783  | ) |      |   | (3,895   | )
|                                                                              |  |                           |         |   |      |   |          |  
|Net cash provided by financing activities                                     |  |                           | 15,421  |   |      |   | 23,035   |  
|                                                                              |  |                           |         |   |      |   |          |  
|Net increase (decrease) in cash and cash equivalents                          |  |                           | (8,214  | ) |      |   | 5        |  
|Cash and cash equivalents at beginning of period                              |  |                           | 8,481   |   |      |   | 10       |  
|                                                                              |  |                           |         |   |      |   |          |  
|Cash and cash equivalents at end of period                                    |  | $                         | 267     |   |      | $ | 15       |  
|                                                                              |  |                           |         |   |      |   |          |  
|Non-cash investing and financing activities:                                  |  |                           |         |   |      |   |          |  
|Property and equipment financed under capital leases                          |  | $                         | 831     |   |      | $ | 34       |  
|Payable to former shareholders for repurchase of stock                        |  | $                         |        |   |      | $ | 205      |  
|Notes payable issued in exchange for shares                                   |  | $                         |        |   |      | $ | 1,044    |  
|Stock redemption payable                                                      |  | $                         | 12,323  |   |      | $ |         |  
|Stock window subscription receivable                                          |  | $                         | 2,986   |   |      | $ |         |  
|Stock issued for 401k match                                                   |  | $                         | 5,093   |   |      | $ | 4,512    |  
|Stock issued for acquisition                                                  |  | $                         | 200     |   |      | $ |         |  
|Adoption of FIN 48, Accounting for Uncertainty in Income Taxes                |  | $                         | 2,743   |   |      | $ |         |  
|Change in income tax reporting method:                                        |  |                           |         |   |      |   |          |  
|Increase to other liabilities and accounts payable                            |  | $                         | 11,398  |   |      | $ |         |  
|Increase to deferred income taxes, current                                    |  | $                         | 18,596  |   |      | $ |         |  
|Decrease to deferred income taxes, non-current                                |  | $                         | 29,994  |   |      | $ |         |  
|Cash paid for interest                                                        |  | $                         | 567     |   |      | $ | 1,165    |  
|Cash paid for income taxes                                                    |  | $                         | 2,337   |   |      | $ | 1,759    |  

The accompanying notes are an integral part of these condensed consolidated financial
statements.



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The PBSJ Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Summary of Significant Accounting
Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the interim reporting rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form 10-Q.
Pursuant to such rules and regulations, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed
or omitted.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements of the interim period
contain all adjustments, which are of a normal and recurring nature, necessary to present fairly the financial position of The PBSJ Corporation (the Company) as of March 31, 2008, and the results of operations and cash flows for the
periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes to the consolidated financial statements included in the Companys Form 10-K
for the year ended September 30, 2007. The accounting policies followed for interim financial reporting are the same as disclosed in Note 1 of the notes to the consolidated financial statements included in the Companys Annual Report on
Form 10-K. The results of operations for the six-month periods ended March 31, 2008 and 2007 are not necessarily indicative of the results to be expected for the fiscal year.

Capital Structure

The bylaws of the Company require that common stock held by employee shareholders
who terminate employment with the Company be offered for sale at fair market value to the Company, which has a right of first refusal. Should the Company decline to purchase the shares, the shares must next be offered to the Companys profit
sharing and employee stock ownership plan at fair market value, and then ultimately to shareholders who are employees of the Company. The bylaws of the Company provide that the fair market value be determined by an appraisal. Other than agreements
with certain retired Directors, as of March 31, 2008 and September 30, 2007, there is no outstanding common stock held by individuals no longer employed by the Company.

On November 3, 2007, at a special shareholders meeting, the shareholders of the Company approved certain amendments to its Articles of Incorporation
and bylaws. The shareholders approved the proposal to reclassify the total existing authorized shares of common stock as Class A Common Stock, to create a new class of non-voting common stock with 5,000,000 authorized shares entitled Class B
Common Stock and to authorize the issuance of up to 10,000,000 shares of Preferred Stock, with designations, preferences, rights and limitations as adopted by the Board of Directors.

On January 19, 2008, at the Companys annual meeting, the shareholders of the Company approved certain amendments to the Companys bylaws
related to the procedures for the issuance, sale and redemption of stock. The shareholders also approved the Amended and Restated 2008 Employee Stock Ownership and Direct Purchase Plan, the 2008 Employee Payroll Stock Purchase Plan, 2008 Employee
Restricted Stock Plan and the election of Directors.

Pursuant to the terms of its credit agreement, the Company cannot declare or pay
dividends in excess of 50% of its net income. The Company has not previously paid cash dividends on its common stock and has no present intention of paying cash dividends on its common stock in the foreseeable future. All earnings are retained for
investment in its business.



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Other Employee Stock Sales and Purchases

The stock offering window usually takes place on an annual basis during the second fiscal quarter. The stock window allows full time and part time regular
employees to purchase shares of Class A common stock and existing shareholders to offer shares of common stock for sale to the Company. Under the corporate bylaws, the Company has the right of first refusal to purchase these shares. If the
Company declines to purchase the offered shares, they are offered to the Employee Profit Sharing and Stock Ownership Plan and Trust (ESOP) and then to all shareholders of the Company.

The Company cancelled the stock window for fiscal 2007 because the Company was not current in filing its quarterly reports for fiscal 2007 with the SEC.
Instead the Company authorized an internal market window (internal window) for employee shareholders to purchase and sell shares of the Company in July 2007. The Company facilitated this internal window by matching employee shareholders
who wished to purchase and sell shares. The Company had the option, but not the obligation, to purchase any unmatched sell shares that employee shareholders wished to sell and did not have a matching employee shareholder purchaser. Eligible buyers
were employees and directors of the Company and the Companys ESOP. At the end of the internal window, there were unmatched sell shares. The Company did not exercise its right to purchase the unmatched sell shares. The unmatched sell shares
were next offered to the Companys ESOP, which agreed to purchase all of the unmatched sell shares.

As a result of the internal
window, the Company loaned funds for those shares that were matched to those employee shareholders who wished to sell their shares for the full amount due. Employee shareholders that wished to purchase matched shares were required to execute
promissory notes (notes) and pledge share agreements as collateral for the notes. The notes were interest free and were due on December 28, 2007. At September 30, 2007, the outstanding balance of the notes was $1.9 million, of
which, approximately $332,000 was classified as other current assets and the remaining balance of $1.6 million was included as a reduction of stockholders equity in the accompanying condensed consolidated balance sheet. The outstanding balance
of the notes at December 31, 2007 was collected in January 2008.

During the second quarter of fiscal year 2008, the Company opened
the stock window for the purchase and/or redemption of shares by eligible employees and outside directors at a price of $29.68. Purchasers of shares were given several options for payment, including payroll deductions, balloon payments, up front
cash or some combination thereof. The last payroll deduction will be due on November 28, 2008. As a result of the stock window, the Company sold 140,197 shares for an aggregate amount of $4.2 million. At March 31, 2008, the outstanding
balance due to the Company on the shares sold was $3.0 million, of which, approximately $537,000 was classified as other current assets and the remaining balance of $2.5 million was included as a reduction of stockholders equity in the
accompanying condensed consolidated balance sheet. The Company issued stock in the amount of $5.1 and $4.5 million, in lieu of cash payment, for the matching contribution to the 401(k) plan for calendar years 2007 and 2006, respectively. The Company
agreed to redeem 415,187 shares for an aggregate amount of $12.3 million. As a result, the Company recorded a liability for this aggregate amount, which is reflected in stock redemption payable in the accompanying condensed consolidated balance
sheet as of March 31, 2008.



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Earnings Per Share

A reconciliation of the number of shares used in computing basic and diluted earnings per share follows:



|                                              |  |                             |  |                           |  |       |  |      
|--------------------------------------------- |  | --------------------------- |  | ------------------------- |  | ----- |  | -----
|                                              |  | Three Months EndedMarch 31, |  | Six Months EndedMarch 31,
|(Shares in thousands)                         |  | 2008                        |  | 2007                      |  | 2008  |  | 2007 
|Weighted average shares outstanding - Basic   |  | 6,150                       |  | 6,162                     |  | 6,239 |  | 6,218
|Effect of dilutive unvested restricted stock  |  | 12                          |  | 456                       |  | 21    |  | 464  
|                                              |  |                             |  |                           |  |       |  |      
|Weighted average shares outstanding - Diluted |  | 6,162                       |  | 6,618                     |  | 6,260 |  | 6,682
|                                              |  |                             |  |                           |  |       |  |      

Comprehensive Income

Comprehensive income consists of net income and the minimum pension liability adjustment that, under Generally Accepted Accounting Principles (GAAP), is excluded from net income.

The components of comprehensive income are as follows:



|                                                 |  |                             |       |                           |   |       |  |      |       |  |   |      
|------------------------------------------------ |  | --------------------------- | ----- | ------------------------- | - | ----- |  | ---- | ----- |  | - | -----
|(Dollars in thousands)                           |  | Three Months EndedMarch 31, |       | Six Months EndedMarch 31,
|                                                 |  | 2008                        |       | 2007                      |   | 2008  |  | 2007
|Net Income                                       |  | $                           | 2,574 |                           | $ | 5,448 |  | $    | 4,698 |  | $ | 4,031
|Other comprehensive income:                      |  |                             |       |                           |   |       |  |      |       |  |   |      
|Minimum pension liability adjustment, net of tax |  |                             | 34    |                           |   | 66    |  |      | 37    |  |   | 137  
|                                                 |  |                             |       |                           |   |       |  |      |       |  |   |      
|Total comprehensive income                       |  | $                           | 2,608 |                           | $ | 5,514 |  | $    | 4,735 |  | $ | 4,168
|                                                 |  |                             |       |                           |   |       |  |      |       |  |   |      

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 160 (SFAS 160), Noncontrolling Interests in Consolidated Financial
Statements an amendment of ARB No. 51. This standard requires specific financial disclosures of consolidated noncontrolling interest with the objective of improving the relevance, comparability, and transparency of the financial
information relating to noncontrolling interest in a consolidated subsidiary. The Company is required to adopt the recognition and related disclosure provisions of SFAS 160 beginning with interim periods of fiscal year ending September 30,
2010; earlier adoption is prohibited. The Company does not believe the adoption of SFAS 160 will have a material impact on its condensed consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007) (SFAS 141(R)), Business Combinations.The objective of
this Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. The Company is required to
adopt the recognition and related disclosure provisions of SFAS 141(R) beginning with interim periods of fiscal year ending September 30, 2010; earlier adoption is prohibited. The Company is currently evaluating the impact of this statement on
its condensed consolidated financial statements.



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##### Table of Contents

In July 2006, the FASB issued Interpretation (FIN) No. 48, Accounting for
Uncertainty in Income Taxes an interpretation of FASB No. 109 (FIN 48). This interpretation establishes guidelines and thresholds that must be met for the recognition and measurement of a tax position taken or expected to
be taken on a tax return. The Company adopted FIN 48 in the first quarter of fiscal 2008, beginning on October 1, 2007. As a result of the adoption of FIN 48, the Company has recognized a change in the liability for unrecognized tax benefits of
$2.5 million and an increase of approximately $200,000 in accrued interest, which was accounted for as a reduction to the October 1, 2007 balance of retained earnings in the accompanying condensed consolidated financial statements.

2. Misappropriation Loss and Accrued Reimbursement Liability

In connection with an investigation conducted by independent counsel in a prior year, it was revealed that at least $36 million was misappropriated between January 1, 1998 and the discovery of the
misappropriations in March 2005.

The Company determined that the misappropriation scheme led to the overstatement of overhead rates that
the Company used to determine billings in connection with certain of its government contracts. As a result, some government clients were overcharged for the Companys services

The Company determined corrected overhead rates considering the impact of the misappropriations and considering the impact of additional errors
identified and entered into settlement agreements for many of these clients and agencies, including without limitation, the Department of Justice, the State of Texas Department of Transportation and the Florida Department of Transportation. The
Company and its advisors have been working with its government clients to finalize any refundable amounts and estimates that the cumulative refund amount, before any payments, resulting from the overstated overhead rates is $35.6 million through
March 31, 2008, including interest.

Based on settlements to date and new information, the Company changed its estimate of the accrued
reimbursement liability and recorded a reduction in the liability with a corresponding increase in engineering fees in the amount of $552,000 and $2.0 million during the three-month and six-month periods ended March 31, 2008, respectively. At
March 31, 2008 and September 30, 2007, the accrued reimbursement liability was $3.4 million and $8.4 million, respectively, in the accompanying condensed consolidated balance sheets.



|                              |  |   |        |  
|----------------------------- |  | - | ------ | -
|(Dollars in thousands)        |  |   |        |  
|Balance at September 30, 2007 |  | $ | 8,385  |  
|Payments                      |  |   | (2,847 | )
|Interest and other            |  |   | (101   | )
|Adjustments                   |  |   | (2,047 | )
|                              |  |   |        |  
|Balance at March 31, 2008     |  | $ | 3,390  |  
|                              |  |   |        |  

The Company has incurred certain professional fees and other costs that relate to the
investigation of the misappropriations and the related recovery of assets. These expenses include legal fees, forensic audit fees and related costs, and other costs associated with the recovery and maintenance of misappropriated assets and are
stated as investigation and related costs in the accompanying condensed consolidated statements of operations.

During the three-month and
six-month periods ended March 31, 2007, the Company recognized $2.0 million in insurance proceeds related to a claim filed by the Company under its crime liability insurance policy. Additionally, in the three-month and six-month periods ended
March 31, 2007, the Company incurred $1.2 million and $3.2 million, respectively, in investigation and related costs.



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##### Table of Contents

The recorded gains and losses from recovered assets and the investigation and related costs have been
allocated to the segments based on the individual segments proportionate share of general and administrative costs to total Company general and administrative costs.

3. Acquisitions

On February 29, 2008, the Company acquired 100% of the stock of
EcoScience Corporation (EcoScience) for $2.25 million, comprised of $2.0 million in cash, 6,750 shares of the Companys common stock, Class A valued at approximately $200,000 and $50,000 held in escrow. The purchase price was
allocated to the respective assets and liabilities based on their estimated fair values as of the acquisition date. The Company is in the process of valuing the identified intangible assets. At March 31, 2008 the excess purchase price has been
included in goodwill. The allocation of the purchase price resulted in assets of $2.6 million, including approximately $2.0 million of goodwill, and liabilities of approximately $384,000. EcoScience specializes in the preparation of ecological
assessments and environmental impact statements, endangered species determinations, wetland delineations, stormwater master planning, hydrologic and hydraulic engineering and surface or groundwater modeling primarily in North Carolina, South
Carolina and the Southeastern region of the U.S. EcoScience greatly enhances technical strength in environmental, water and planning markets and solidifies the Companys general presence in the Southeast.

The primary factor that contributed to a purchase price that resulted in the recognition of goodwill in the acquisition is the intellectual capital of
the skilled professionals and senior technical personnel associated with the acquired entity which does not meet the criteria for recognition as an asset apart from goodwill. The results of operations of the above acquisition are included from the
date of acquisition. The pro forma impact of this acquisition is not material to reported historical operations.

4. Unbilled Fees

Unbilled fees are primarily related to work performed by the Company in the last month of a period for which revenues have been earned
and recognized. Billings usually occur in the month following the period where revenues have been recognized or in accordance with the specific contractual provisions, which dictate the timing of billing. Unbilled fees which are not invoiced the
month following the period of revenue recognition are normally invoiced within the following two months. Effective January 2008, the Company began the integration of several data sources and processes into an Enterprise Resource Planning
(ERP) system. The ERP integration included the conversion of several existing business systems, the use of multiple software and hardware components and the transfer of several data sources into a unified database to store data for the
various system modules. As a result of the conversion efforts, the Company experienced delays in generating invoices to clients, and is the primary reason for the significant increase in the amount of unbilled fees at March 31, 2008 compared
with September 30, 2007.



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##### Table of Contents

5. Long-Term Debt

The following table lists long-term debt including the respective current portions:



|                                                                                                                                                                                                                                                                                                                                                                   |  |               |        |                   |   |      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ------ | ----------------- | - | -----
|                                                                                                                                                                                                                                                                                                                                                                   |  | March 31,2008 |        | September 30,2007
|(Dollars in thousands)                                                                                                                                                                                                                                                                                                                                             |  |               |        |                   |   |      
|Line of credit                                                                                                                                                                                                                                                                                                                                                     |  | $             | 19,643 |                   | $ |     
|Mortgage note payable due in monthly installments starting on April 16, 2001, with interest, collateralized by real property; unpaid
principal due March 16, 2011. Interest at LIBOR plus the floating rate margin of not less than 65 basis points and not greater than 90 basis points (3.43% and 6.19% at March 31, 2008 and September 30, 2007,
respectively). |  |               | 6,652  |                   |   | 6,909
|Capital lease obligations                                                                                                                                                                                                                                                                                                                                          |  |               | 1,052  |                   |   | 705  
|                                                                                                                                                                                                                                                                                                                                                                   |  |               |        |                   |   |      
|                                                                                                                                                                                                                                                                                                                                                                   |  |               | 27,347 |                   |   | 7,614
|Less current portion of long-term debt                                                                                                                                                                                                                                                                                                                             |  |               | 20,154 |                   |   | 512  
|Less current portion of capital lease obligations                                                                                                                                                                                                                                                                                                                  |  |               | 813    |                   |   | 347  
|                                                                                                                                                                                                                                                                                                                                                                   |  |               |        |                   |   |      
|Long-term debt and capital lease obligations                                                                                                                                                                                                                                                                                                                       |  | $             | 6,380  |                   | $ | 6,755
|                                                                                                                                                                                                                                                                                                                                                                   |  |               |        |                   |   |      

In November 2007, the Company renegotiated its existing line of credit agreement with Bank of
America, N.A. (the Bank) to increase the line of credit from $58 million to $60 million and to extend the maturity date of June 30, 2008 to a new maturity date of October 2011. As part of the extension agreement, substantially all
the terms and conditions remained the same and the minimum levels of net worth requirement were eliminated from the agreement. The line of credit agreement provides for the issuance of letters of credit. The letters of credit reduce the maximum
amount available for borrowing. As of March 31, 2008 and September 30, 2007, the Company had letters of credit outstanding totaling $5.4 million and $1.9 million, respectively, including letters of credit for $1.8 million to guarantee
insurance payments. As a result of the issuance of these letters of credit and outstanding borrowings, the maximum amount available for borrowing under the line of credit was $34.9 million and $56.1 million as of March 31, 2008 and
September 30, 2007, respectively.

The interest rate (3.11% at March 31, 2008 and 5.85% at September 30, 2007) is, at the
Companys option either, LIBOR plus 50 basis points (currently in use) or prime minus 125 basis points if the Companys funded debt coverage ratio is less than 2.5. The rate increases to LIBOR plus 75 basis points or prime minus 100 basis
points if the Companys funded debt coverage ratio is between 2.5 to 3.0. The line of credit contains clauses requiring the maintenance of various covenants and financial ratios including a minimum coverage ratio of certain fixed charges and a
minimum leverage ratio of earnings before interest, taxes, depreciation and amortization to funded debt. The line of credit is collateralized by substantially all of the Companys assets. The Company was in compliance with all financial
covenants and ratios as of March 31, 2008.

On March 19, 2001, the Company entered into a mortgage note with an original
principal amount of $9.0 million due in monthly installments starting on April 16, 2001, with interest. Interest on the mortgage is LIBOR plus the floating rate margin of not less than 65 basis points and not greater than 90 basis points. A
balloon payment is due on the mortgage on March 16, 2011. The effective interest rate on the mortgage note was 3.43% and 6.19% at March 31, 2008 and September 30, 2007, respectively. The Companys adjustable rate mortgage calls
for an interest rate based on the 30 day LIBOR plus a margin of .065%. The mortgage agreement contains clauses requiring the maintenance of various covenants and financial ratios. In October 2007, the Company negotiated a modification to the
mortgage note by eliminating the minimum levels of net worth requirement from the mortgage note. The mortgage note is collateralized by the office building located in Maitland, Florida. The Company was in compliance with all financial covenants and
ratios as of March 31, 2008.

The Companys capital leases primarily relate to equipment. The interest rate used in computing the
minimum lease payments range from 2.72% to 5.23%. The leases were capitalized at the lower of the present value of minimum lease payments or the fair market value of the equipment at the inception of the lease.



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6. Income Taxes

The income tax provisions were $2.1 million and $4.8 million, and $4.2 million and $4.1 million which represented effective tax rates of 45.1% and 46.9% and 47.4% and 50.6%, for the three-month and six-month periods
ended March 31, 2008 and 2007, respectively.

During the quarter ended March 31, 2008, the Company had no changes to its
unrecognized tax benefits related to the current, or prior reporting periods, changes in settlements with taxing authorities, nor as a result of the lapse of any applicable statues of limitations. The Company believes it is reasonably possible that
the liability for unrecognized tax benefits at March 31, 2008 may decrease by approximately $2.6 million due to the completion of examinations or the expiration of the statute of limitations within 12 months of March 31, 2008.

The Company files tax returns with the U.S. Federal Government, various state and local jurisdictions, as well as Puerto Rico. The Company is subject
to periodic audits by the Internal Revenue Service as well as foreign, state and local taxing authorities. These audits may challenge certain of the Companys tax positions such as the timing and amount of income and deductions and the
allocation of taxable income to various tax jurisdictions. Income tax contingencies are accounted for in accordance with FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), and may require
significant management judgment in estimating final outcomes. Actual results could materially differ from these estimates and could significantly affect the Companys effective tax rate and cash flows in future years. With few exceptions, the
Company is no longer subject to U.S. Federal, State and Local, or Puerto Rico examination by tax authorities for tax years ending before October 1, 2004.

On February 21, 2008, the Company filed an application with the Internal Revenue Service to change its overall method of tax reporting from the cash method to the accrual method, effective with the tax year
ending September 30, 2008. The effect of this change is to increase the estimated current taxable income by approximately $101 million on a pro rata basis over the next four years. This method change has no impact on the Companys overall
provision for income taxes. The liability for the first year of the method change is included as a component in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheet as of March 31, 2008. The liability
for the second year of the method change is included in the current deferred tax liability and the liability for the third and fourth years of the method change are included in non-current deferred income tax liability, in the accompanying condensed
consolidated balance sheet as of March 31, 2008.



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7. Defined Benefit Retirement Plan

The Company uses a September 30 measurement date for its plans. The following table provides a summary of the Companys periodic costs related
to its defined benefit retirement plan:



|                                              |  |                             |     |                           |   |      |  |      |     |  |   |    
|--------------------------------------------- |  | --------------------------- | --- | ------------------------- | - | ---- |  | ---- | --- |  | - | ---
|(Dollars in thousands)                        |  | Three Months EndedMarch 31, |     | Six Months EndedMarch 31,
|                                              |  | 2008                        |     | 2007                      |   | 2008 |  | 2007
|Service benefits earned during period         |  | $                           | 116 |                           | $ | 123  |  | $    | 232 |  | $ | 246
|Interest cost on projected benefit obligation |  |                             | 208 |                           |   | 195  |  |      | 416 |  |   | 390
|Amortization:                                 |  |                             |     |                           |   |      |  |      |     |  |   |    
|Net loss from past experience                 |  |                             | 30  |                           |   | 109  |  |      | 60  |  |   | 218
|                                              |  |                             |     |                           |   |      |  |      |     |  |   |    
|Net periodic pension cost                     |  | $                           | 354 |                           | $ | 427  |  | $    | 708 |  | $ | 854
|                                              |  |                             |     |                           |   |      |  |      |     |  |   |    

8. Restricted Stock

Restricted stock awards are offered throughout the year, and are intended to provide long-term incentives to key employees. Awards of restricted stock are subject to transfer restrictions and risk of forfeiture until
they are earned. Shares of restricted stock become fully vested usually over a period of several years of continued employment and are subject to total forfeiture if the employee ceases to be employed prior to the restricted stock vesting date,
except in certain limited circumstances described in the individual restricted stock award agreement. During the restriction period, holders have the rights of shareholders, including the right to vote, but cannot transfer ownership of their shares.

Effective October 1, 2006, the Company adopted SFAS No.123 (revised 2004), Share-Based Payment, (SFAS
123(R)) using the modified prospective method. The adoption of SFAS 123(R) did not have a material impact on the Companys financial position, results of operations or cash flows. Restricted stock is recorded at fair value on the date of
issuance. Pursuant to Company guidelines, the Company may not issue restricted stock if, after issuing the shares, the total number of restricted shares outstanding would exceed ten percent of the total shares outstanding. The Company satisfies the
issuance of restricted stock with newly issued shares.

On January 19, 2008, at the Companys annual meeting, the shareholders
approved the 2008 Employee Restricted Stock Plan.

The Company issues restricted stock for the following purposes:

Retention

This program awards
restricted shares to key employees in middle management or higher positions for the purpose of providing long-term incentives. The awards are made on a case-by-case basis at the discretion of Senior Management. These awards are issued and become
fully vested usually after five years of continuous service with the Company.

Acquisitions

When the Company acquires a business, restricted stock is awarded to retain key employees who are generally not the principal owners of the acquired
firm. Shares become fully vested usually after three to five years of continuous service with the Company.

KERP

The Key Employee Retention Program (KERP) provides an annual restricted stock award equal to five percent of the participants annual
gross salary for a period of up to ten years. Benefits vest at age 56 and after ten years of continuous service with the Company, or upon either retirement, or death, or disability.



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Other

The Company has one other plan under which no new grants have been awarded since fiscal year 1997. As of March 31, 2008, this plan had 119,935 shares outstanding with unrecognized compensation cost of
approximately $65,000 which will be recognized through 2017.

The following tables summarize information about restricted shares:



|                               |  |                       |   |  |                                     |      
|------------------------------ |  | --------------------- | - |  | ----------------------------------- | -----
|                               |  | RestrictedStock Units |   |  | WeightedAverageGrant-DateFair Value
|Unvested at September 30, 2007 |  | 381,237               |   |  | $                                   | 14.82
|Granted                        |  | 32,306                |   |  |                                     | 27.11
|Vested                         |  | (65,393               | ) |  |                                     | 11.50
|Forfeited                      |  | (25,360               | ) |  |                                     | 13.54
|                               |  |                       |   |  |                                     |      
|Unvested at March 31, 2008     |  | 322,790               |   |  | $                                   | 17.00
|                               |  |                       |   |  |                                     |      



|               |  |                       |  |                                     |       |                              |   |                                          |  |    
|-------------- |  | --------------------- |  | ----------------------------------- | ----- | ---------------------------- | - | ---------------------------------------- |  | ---
|March 31, 2008 |  | RestrictedStock Units |  | WeightedAverageGrant DateFair Value |       | UnrecognizedCompensationCost |   | RemainingWeightedAveragePeriod(in years)
|Retention      |  | 140,831               |  | $                                   | 23.21 |                              | $ | 2,007,724                                |  | 3.9
|Acquisition    |  | 26,558                |  |                                     | 26.06 |                              |   | 246,140                                  |  | 1.6
|KERP           |  | 49,236                |  |                                     | 24.05 |                              |   | 931,412                                  |  | 9.9
|Other          |  | 106,165               |  |                                     | 3.22  |                              |   | 53,939                                   |  | 4.6
|               |  |                       |  |                                     |       |                              |   |                                          |  |    
|               |  | 322,790               |  | $                                   | 17.00 |                              | $ | 3,239,215                                |  | 5.3
|               |  |                       |  |                                     |       |                              |   |                                          |  |    

The weighted average grant-date fair value of shares granted during the six-month periods ended
March 31, 2008 and 2007 was $29.68 and $24.34, respectively. The total fair value of shares vested, on the vesting dates, for the six-month periods ended March 31, 2008 and 2007 were $752,000 and $200,000, respectively. The total amount of
compensation expense recognized under these agreements during the three-month and six-month periods ended March 31, 2008 and 2007, was $112,000 and $219,000 and $342,000 and $467,000 respectively, and was included in general and administrative
expenses in the accompanying condensed consolidated statements of operations. The income tax benefit related to compensation expense under these agreements was $49,000 and $97,000 and $140,000 and $207,000, in the three-month and six-month periods
ended March 31, 2008 and 2007, respectively.

9. Commitments and Contingencies

The Company is obligated under various non cancelable leases for office facilities, furniture, and equipment. Certain leases contain renewal options,
escalation clauses and payment of certain other operating expenses of the properties. In the normal course of business, leases that expire are expected to be renewed or replaced by leases for other properties.



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As of March 31, 2008, there were various legal proceedings pending against the Company, where
plaintiffs allege damages resulting from the Companys engineering services. The plaintiffs allegations of liability in those cases seek recovery for damages caused by the Company based on various theories of negligence, contributory
negligence or breach of contract. Additionally, if a client were to make a claim against a subcontractor on a project for which the Company was the prime contractor, the Company would be liable if the subcontractor was not adequately insured or not
financially able to settle the claim. The Company accrues for contingencies when a loss is probable and the amounts can be reasonably estimated. During the six months period ended March 31, 2008, the Company settled two large cases and several
smaller ones and adjusted the reserve for several small claims that resulted in a reduction of the accrual of approximately $886,000. Additionally, the Company paid several large invoices as part of the settlement for the City of Frisco/Teel Road
claim, causing an additional reduction to the accrual of approximately $136,000. As of March 31, 2008 and September 30, 2007, the Company had accruals of $3.4 million and $4.4 million, respectively, for all potential and existing claims,
lawsuits and pending proceedings that, in managements opinion, are probable and can be reasonably estimated.

The Company expects to
pay these liabilities over the next one to three years. Management is of the opinion that the liabilities ultimately resulting from such existing and other pending proceedings, lawsuits and claims will not materially affect the Companys
financial position, results of operations or cash flows.

The Company maintains a full range of insurance coverage, including workers
compensation, commercial general liability (which includes property coverage) commercial auto and professional liability (which includes pollution coverage). This coverage would also cover the Company for a claim against a subcontractor of the
Company. The Companys insurance policies may offset the amount of loss exposure from legal actions.

In October 2007, the Federal
Election Commission advised the Company that it was commencing an investigation into alleged violations of the Federal Election Campaign Act of 1971, as amended, based on the improper campaign contributions including improper use of political action
committees. At the present time the Company is unable to predict the likely outcome of this investigation.

The United States SEC is also
conducting an investigation of the accounting irregularities and misappropriations of funds. The Company is fully cooperating with the investigation and has produced documents and other information to the commission. At the present time, the Company
is unable to predict the likely outcome of this investigation.

10. Segment Reporting

The Company operations are composed of six operating segments for which financial information is available and is evaluated on a regular basis by its
executive decision maker, who has authority to allocate resources and assess performance. The Company has aggregated these six operating segments into four reportable segments: Transportation Services, Construction Management, Civil Engineering and
Environmental Services.

Activities in the Transportation Services business segment generally involve planning, design, right of way
acquisition, development and design of intelligent transportation services and program construction management services for multiple transportation modes, including interstate and primary highways, toll roads, arterials, bridges, transit systems,
airports and port facilities. The Program Management group of the Transportation segment provides many of its governmental clients the necessary resources to manage large infrastructure programs from concept through construction. Services include
planning, programming and contract support.

The Construction Management segment provides a wide range of services as an agent for the
Companys clients, including contract administration, inspection, field-testing, scheduling/estimating, instituting project controls and quality assessment. The Company provides scheduling, cost estimating and construction observation services
for the project, or its services may be limited to providing construction consulting.



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The Civil Engineering segment, through its two operating segments, Facilities and Federal (formerly known
as Applied Technology), provides civil engineering as well as specialized services to public and private clients. Included in these services are: site engineering and surveys, infrastructure engineering, master planning, disaster mitigation planning
and response, asset assessment and management, emergency management and architectural and landscape design. The Company aggregated the Facilities and Applied Technologies operating segments into the Civil Engineering segment based on the
similarities of services and clients.

The Environmental Services business segment, through its two operating segments, Environmental
Sciences and Water focuses on the delivery of planning, design and construction management services for private and public sector clients related to air quality management, flood insurance studies, energy planning, hazardous and solid waste
management, ecological studies, wastewater treatment, water resources, environmental toxicology analysis, aquatic treatment systems, reclaimed water, and water supply and treatment. The Environmental Services segment aggregated the Environmental
Science and Water operating segments based on the affinity of clients and services provided. This aggregation will allow the consolidation of the three major markets where we provide environmental services, Water, Water Resources and Science into
one umbrella, where the Company can provide a full range of services to its common clients.



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Financial information relating to the Companys operations by segment is as follows:



|                                    |  |                        |         |                        |   |                  |  |   |                       |   |  |       |        |   |  |   |        
|----------------------------------- |  | ---------------------- | ------- | ---------------------- | - | ---------------- |  | - | --------------------- | - |  | ----- | ------ | - |  | - | -------
|(Dollars in thousands)              |  | TransportationServices |         | ConstructionManagement |   | CivilEngineering |  |   | EnvironmentalServices |   |  | Total
|Three Months Ended March 31, 2008  
|Engineering fees                    |  | $                      | 68,309  |                        | $ | 18,852           |  | $ | 37,847                |   |  | $     | 30,824 |   |  | $ | 155,832
|Net earned revenue                  |  |                        | 47,637  |                        |   | 15,825           |  |   | 31,187                |   |  |       | 23,692 |   |  |   | 118,341
|Operating income (loss)             |  |                        | 5,648   |                        |   | 1,817            |  |   | (1,644                | ) |  |       | (903   | ) |  |   | 4,918  
|Depreciation and amortization       |  |                        | 792     |                        |   | 220              |  |   | 926                   |   |  |       | 554    |   |  |   | 2,492  
|Purchases of property and equipment |  |                        | 1,138   |                        |   | 431              |  |   | 955                   |   |  |       | 716    |   |  |   | 3,240  
|Total assets as of March 31, 2008   |  |                        | 116,025 |                        |   | 35,983           |  |   | 67,778                |   |  |       | 56,383 |   |  |   | 276,169
|                                    |  |                        |         |                        |  
|Three Months Ended March 31, 2007   |  |                        |         |                        |   |                  |  |   |                       |   |  |       |        |   |  |   |        
|Engineering fees                    |  | $                      | 55,463  |                        | $ | 22,916           |  | $ | 36,948                |   |  | $     | 31,843 |   |  | $ | 147,170
|Net earned revenue                  |  |                        | 42,500  |                        |   | 19,445           |  |   | 30,755                |   |  |       | 26,378 |   |  |   | 119,078
|Operating income                    |  |                        | 3,433   |                        |   | 2,989            |  |   | 1,573                 |   |  |       | 2,397  |   |  |   | 10,392 
|Depreciation and amortization       |  |                        | 948     |                        |   | 313              |  |   | 954                   |   |  |       | 624    |   |  |   | 2,839  
|Purchases of property and equipment |  |                        | 955     |                        |   | 395              |  |   | 751                   |   |  |       | 613    |   |  |   | 2,714  
|Total assets as of March 31, 2007   |  |                        | 94,094  |                        |   | 38,654           |  |   | 60,203                |   |  |       | 53,394 |   |  |   | 246,345



|                                    |  |                        |         |                        |   |                  |  |   |                       |   |  |       |        |   |  |   |        
|----------------------------------- |  | ---------------------- | ------- | ---------------------- | - | ---------------- |  | - | --------------------- | - |  | ----- | ------ | - |  | - | -------
|(Dollars in thousands)              |  | TransportationServices |         | ConstructionManagement |   | CivilEngineering |  |   | EnvironmentalServices |   |  | Total
|Six Months Ended March 31, 2008     |  |                        |         |                        |   |                  |  |   |                       |   |  |       |        |   |  |   |        
|Engineering fees                    |  | $                      | 126,125 |                        | $ | 39,116           |  | $ | 73,678                |   |  | $     | 61,290 |   |  | $ | 300,209
|Net earned revenue                  |  |                        | 88,761  |                        |   | 32,901           |  |   | 60,847                |   |  |       | 47,197 |   |  |   | 229,706
|Operating income (loss)             |  |                        | 8,312   |                        |   | 2,627            |  |   | (929                  | ) |  |       | (832   | ) |  |   | 9,178  
|Depreciation and amortization       |  |                        | 1,519   |                        |   | 467              |  |   | 1,732                 |   |  |       | 1,079  |   |  |   | 4,797  
|Purchases of property and equipment |  |                        | 2,170   |                        |   | 863              |  |   | 1,754                 |   |  |       | 1,378  |   |  |   | 6,165  
|Total assets as of March 31, 2008   |  |                        | 116,025 |                        |   | 35,983           |  |   | 67,778                |   |  |       | 56,383 |   |  |   | 276,169
|                                    |  |                        |         |                        |  
|Six Months Ended March 31, 2007     |  |                        |         |                        |   |                  |  |   |                       |   |  |       |        |   |  |   |        
|Engineering fees                    |  | $                      | 105,758 |                        | $ | 43,446           |  | $ | 67,666                |   |  | $     | 60,014 |   |  | $ | 276,884
|Net earned revenue                  |  |                        | 79,544  |                        |   | 36,154           |  |   | 55,972                |   |  |       | 48,547 |   |  |   | 220,217
|Operating income (loss)             |  |                        | 3,715   |                        |   | 3,732            |  |   | (957                  | ) |  |       | 2,184  |   |  |   | 8,674  
|Depreciation and amortization       |  |                        | 1,887   |                        |   | 630              |  |   | 1,906                 |   |  |       | 1,241  |   |  |   | 5,664  
|Purchases of property and equipment |  |                        | 1,798   |                        |   | 752              |  |   | 1,435                 |   |  |       | 1,157  |   |  |   | 5,142  
|Total assets as of March 31, 2007   |  |                        | 94,094  |                        |   | 38,654           |  |   | 60,203                |   |  |       | 53,394 |   |  |   | 246,345

11. Related Party Transactions

At the annual meeting of the shareholders held on January 28, 2005, the shareholders approved a proposal to authorize the Company to execute an
agreement with Richard Wickett, the former Chairman of the Board from 2002 to February 2005 and former Chief Financial Officer from 1993 to 2004, to allow him to retain his 138,607 shares of the Companys stock, exclusive of his shares owned
through the Companys Employee Profit Sharing and Stock Ownership Plan and Trust (ESOP), upon retirement and offer for sale the shares, in blocks of 46,000, 46,000 and 46,607 shares in February 2005, 2006 and 2007, respectively, at
a price determined at the valuation at the fiscal year end immediately preceding the redemption period.

Pursuant to the Companys bylaws, the Company is permitted to repurchase stock by delivery of a promissory note to the employee. On February 23, 2006 the Company repurchased 46,000 shares and 3,400 shares,
respectively, of the Companys stock from Richard Wickett and Kathryn Wilson in the original principal amounts of $1.2 million and $92,000, respectively. The shares were repurchased for $27.00 per share which represents the September 30,
2004 share price, pending completion of the valuation of the Companys stock as of September 30, 2005. At December 31, 2006, the Company had an accrual of $49,400 for the difference between the purchase price and the
September 30, 2005 share value of $28.00. At March 31, 2008, the notes bear interest at the rate of 7.5% per annum and such rate is adjusted to the then current prime rate of Bank of America on December 31stof each year. Accrued interest and $1 of principal is due monthly on the notes with all remaining principal and accrued interest due and payable on the five
year anniversary of the date of issuance.



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On February 13, 2007, the Company repurchased
an additional 46,607 shares of the Companys stock from Richard Wickett in the original principal amount of approximately $1.0 million, by issuing a promissory note. The additional shares were purchased for $22.40 which represents 80% of the
September 30, 2005 share price, pending completion of the valuation of the Companys stock as of September 30, 2006. In May 2007, the September 30, 2006 valuation was completed establishing a valuation price of $24.34 per share.
The Company recorded an additional accrual for the difference between the purchase price and the September 30, 2006 valuation price. The adjusted accrual balance for the stock price differential is approximately $579,000 at March 31, 2008
and September 30, 2007, and is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets. At March 31, 2008, the note bears interest at the rate of 7.5% per annum and such rate is
adjusted to the then current prime rate of Bank of America on December 31stof each year. Accrued interest and $1 of principal is due monthly
on the note with all remaining principal and accrued interest due and payable on the five year anniversary of the date of issuance.

The
balances of the notes were $2.5 million at March 31, 2008 and September 30, 2007, and were included in other liabilities in the accompanying condensed consolidated balance sheets. Both notes are subject to the Companys right of set
off, which permits the Company to set off all claims it may have against the payee against amounts due and owing under the notes.

In July
2007, pursuant to the Companys bylaws, the Company did not exercise its right of first refusal to redeem the shares offered for redemption by John Shearer, the former National Service Director and Senior Vice President. In accordance with
the Companys bylaws, the shares were next offered to our ESOP plan; the ESOP plan has agreed to redeem the shares over the course of five years. The first annual installment of 54,567 shares was redeemed on July 8, 2007 at the
established valuation price of $24.34 for a total of $1.3 million. The ESOP redeemed the second annual installment of 10,940 shares, at the established valuation price of $29.68, on March 31, 2008. The remaining three equal annual
installments of 33,261 shares will be redeemed in the second quarter of each fiscal year beginning with fiscal year 2009 by the ESOP plan at a price per share established by future valuations of the Companys shares.



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##### Table of Contents

|ITEM 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion and analysis is provided to increase an understanding of, and should be read in conjunction with, the unaudited condensed
consolidated financial statements and accompanying notes included elsewhere in this Form 10-Q.

This Form 10-Q and the information
incorporated by reference in it include and are based on forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend these
forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in these sections. These statements can sometimes be identified by the fact that they do not relate strictly to historical or current facts and
they frequently are accompanied by words such as may, will, anticipate, estimate, expect, or intend and similar terms and expressions. All statements regarding our expected
financial position and operating results, our business strategy, our financing plans and forecasted demographic and economic trends relating to our industry, and statements relating to our ability to be awarded government contracts, the adoption of
certain laws by Congress, our ability to compete effectively with other firms that provide similar services, our ability to attract and retain clients, our ability to achieve future growth and success, our expectations for the public and private
sector economic growth, and the various on-going government investigations, are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results,
performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. We cannot assure you that our expectations in such forward-looking statements will turn out
to be correct. Factors that may impact such forward-looking statements include, among others, our ability to attract additional business, the timing of projects and the potential for contract cancellation by our customers, our ability to attract and
retain skilled employees, our ability to comply with new laws and regulations, our insurance coverage covering certain events, the timing and amount of the spending bills adopted by the federal government and the states, the outcome of the
investigations by the Securities and Exchange Commission and the Federal Election Commission, timely billings to our customers and delays in collections of accounts receivable, risks of competition, changes in general economic conditions and
interest rates, the risk that the Internal Revenue Service or the courts may not accept the amount or nature of one or more items of deduction, loss, income or gain we report for tax purposes and the possible outcome of pending litigation, legal
proceedings and governmental investigations and our actions in connection with such litigation, proceedings and investigations, as well as certain other risks including those set forth under the heading Risk Factors and elsewhere in this
Form 10-Q and in other reports filed by us with the Securities and Exchange Commission. All forward-looking statements included herein are only made as of the date such statements are made, and we do not undertake any obligation to update or revise
publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are qualified in their entirety
to the cautionary statements set forth above and elsewhere in this Form 10-Q and in other reports filed by us with the Securities and Exchange Commission.

Actual results could differ materially from those projected in these forward-looking statements as a result of these factors, among others, many of which are beyond our control.



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##### Table of Contents

1. Results of Operations

The following table sets forth the percentage of net earned revenue represented by the items in our condensed consolidated statements of operations for the three-month and six-month periods ended March 31, 2008
and 2007, respectively:



|                                                                 |  |                             |   |  |                           |   |  |       |   |  |       |  
|---------------------------------------------------------------- |  | --------------------------- | - |  | ------------------------- | - |  | ----- | - |  | ----- | -
|                                                                 |  | Three Months EndedMarch 31, |   |  | Six Months EndedMarch 31, |  
|                                                                 |  | 2008                        |   |  | 2007                      |   |  | 2008  |   |  | 2007  |  
|Engineering fees                                                 |  | 131.7                       | % |  | 123.6                     | % |  | 130.7 | % |  | 125.7 | %
|Direct reimbursable expenses                                     |  | 31.7                        |   |  | 23.6                      |   |  | 30.7  |   |  | 25.7  |  
|                                                                 |  |                             |   |  |                           |   |  |       |   |  |       |  
|Net earned revenue                                               |  | 100.0                       |   |  | 100.0                     |   |  | 100.0 |   |  | 100.0 |  
|                                                                 |  |                             |   | 
|Costs and expenses:                                              |  |                             |   |  |                           |   |  |       |   |  |       |  
|Direct salaries and direct costs                                 |  | 36.0                        |   |  | 37.2                      |   |  | 35.8  |   |  | 37.1  |  
|General and administrative expenses, including indirect salaries |  | 59.9                        |   |  | 54.8                      |   |  | 60.2  |   |  | 58.4  |  
|Insurance proceeds and gain on recoveries                        |  |                            |   |  | (1.7                      | ) |  |      |   |  | (0.9  | )
|Investigation and related costs                                  |  |                            |   |  | 1.0                       |   |  |      |   |  | 1.5   |  
|                                                                 |  |                             |   |  |                           |   |  |       |   |  |       |  
|Operating income                                                 |  | 4.1                         |   |  | 8.7                       |   |  | 4.0   |   |  | 3.9   |  
|Interest expense                                                 |  | (0.2                        | ) |  | (0.1                      | ) |  | (0.2  | ) |  | (0.3  | )
|Other, net                                                       |  |                            |   |  |                          |   |  |      |   |  |      |  
|                                                                 |  |                             |   |  |                           |   |  |       |   |  |       |  
|Income before income taxes                                       |  | 3.9                         |   |  | 8.6                       |   |  | 3.8   |   |  | 3.6   |  
|Provision for income taxes                                       |  | 1.8                         |   |  | 4.0                       |   |  | 1.8   |   |  | 1.9   |  
|                                                                 |  |                             |   |  |                           |   |  |       |   |  |       |  
|Net income                                                       |  | 2.1                         | % |  | 4.6                       | % |  | 2.0   | % |  | 1.7   | %
|                                                                 |  |                             |   |  |                           |   |  |       |   |  |       |  

A summary of our operating results for the three-month and six-month periods ended March 31,
2008 and 2007 is as follows:



|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|---------------------------------------------------------------- |  | --------------------------- | ------- | - | ------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|(Dollars in thousands)                                           |  | Three Months EndedMarch 31, |         |   | Six Months EndedMarch 31, |  
|                                                                 |  | 2008                        |         |   | 2007                      |   |         | 2008 |  |   | 2007    |  
|Engineering fees                                                 |  | $                           | 155,832 |   |                           | $ | 147,170 |      |  | $ | 300,209 |   |  | $ | 276,884 |  
|Direct reimbursable expenses                                     |  |                             | 37,491  |   |                           |   | 28,092  |      |  |   | 70,503  |   |  |   | 56,667  |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Net earned revenue                                               |  |                             | 118,341 |   |                           |   | 119,078 |      |  |   | 229,706 |   |  |   | 220,217 |  
|                                                                 |  |                             |         |  
|Costs and expenses:                                              |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Direct salaries and direct costs                                 |  |                             | 42,580  |   |                           |   | 44,262  |      |  |   | 82,157  |   |  |   | 81,599  |  
|General and administrative expenses, including indirect salaries |  |                             | 70,843  |   |                           |   | 65,206  |      |  |   | 138,371 |   |  |   | 128,682 |  
|Insurance proceeds and gain on recoveries                        |  |                             |        |   |                           |   | (2,000  | )    |  |   |        |   |  |   | (1,977  | )
|Investigation and related costs                                  |  |                             |        |   |                           |   | 1,218   |      |  |   |        |   |  |   | 3,239   |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Operating income                                                 |  |                             | 4,918   |   |                           |   | 10,392  |      |  |   | 9,178   |   |  |   | 8,674   |  
|Interest expense                                                 |  |                             | (254    | ) |                           |   | (157    | )    |  |   | (361    | ) |  |   | (562    | )
|Other, net                                                       |  |                             | 26      |   |                           |   | 28      |      |  |   | 108     |   |  |   | 45      |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Income before income taxes                                       |  |                             | 4,690   |   |                           |   | 10,263  |      |  |   | 8,925   |   |  |   | 8,157   |  
|Provision for income taxes                                       |  |                             | 2,116   |   |                           |   | 4,815   |      |  |   | 4,227   |   |  |   | 4,126   |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  
|Net income                                                       |  | $                           | 2,574   |   |                           | $ | 5,448   |      |  | $ | 4,698   |   |  | $ | 4,031   |  
|                                                                 |  |                             |         |   |                           |   |         |      |  |   |         |   |  |   |         |  



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Overview

Business Overview

We provide segment information on four reportable segments: Transportation Services, Construction
Management, Civil Engineering, and Environmental Services.

We provide services to both private and public sector clients, with the public
sector comprising approximately 77% of our engineering fees. During the six-month period ended March 31, 2008, all segments, experienced growth in engineering fees, except for the Construction Management segment. The Construction Management
segment experienced a decrease in engineering fees primarily due to the completion of projects in Texas and Mississippi in the first fiscal quarter of 2008 and less than desirable growth of projects in the Georgia and Florida markets. The Civil
Engineering segment continued to benefit from work assignments under several large contracts with the Mississippi Emergency Management Agency (MEMA) and the Department of Defense. This increase was partly offset by the continued softness
in business activity in the residential market, especially in the West and the Southeast markets. The increase in engineering fees for the Transportation Services segment was due primarily to incremental workload in the National Services Practice
group and several other projects that started in the first quarter of fiscal 2008. Our Environmental Services segment experienced a modest growth in engineering fees as a result of an economic slowdown which caused a softening of demand for their
services. As of March 31, 2008, our revenue backlog was about $587.1 million as compared to $557.5 million as of September 30, 2007, representing a 5.3% increase.

We earn revenue for time spent on projects, in addition to certain direct reimbursable expenses of our projects, such as subcontractors expenses,
blueprints and travel and lodging. The fluctuation in direct reimbursable expenses, specifically subcontractors costs, including travel and lodging expenses, will influence the fluctuation of our net earned revenue (NER). For instance,
our Transportation Services segment experienced an increase in direct reimbursable expenses during the six months ended March 31, 2008, as compared to the same period in 2007, resulting from a high usage of specialized subcontractors related to
several projects in the National Services Practice group. As a result, our Transportation Services segments NER grew at a lower rate than its engineering fees, because more work was being performed by subcontractors. During the six months
ended March 31, 2008, we experienced an increase in indirect salaries as a percentage of NER reflecting a decrease in chargeability. As chargeability of our technical professionals time decreases, engineering fees and direct salaries
decrease proportionately along with it, while indirect salary costs increase, as less of our technical staffs time worked is being charged back to our clients. Effective in January 2008, we began the integration of several data sources and
processes into an Enterprise Resource Planning (ERP) system. The ERP integration included the conversion of several existing business systems, the use of multiple software and hardware components and the transfer of several
data sources into a unified database to be used by the various system modules. As a result of this integration, our professional staff spent a significant amount of time in non chargeable activities related to the implementation of the ERP system
during the second fiscal quarter of 2008. This resulted in an increase in indirect salaries, which impacted the results of operations for the three-month period ended March 31, 2008 and to a lesser extent the six-month period ended
March 31, 2008.

Our NER is impacted by our mix of chargeable and non chargeable professional staff hours. As chargeability of our
technical professionals time decreases, engineering fees and direct salaries decrease along with it, while indirect salaries increase, as less of our technical staffs time worked is being charged back to our clients. The lower
utilization of our professional staff results in lower labor margin performance and a proportionately lower increase in NER. As chargeability increases, there is a corresponding decrease in indirect salaries and a proportional increase in
engineering fees and direct salaries.



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##### Table of Contents

Business Environment

The need to modernize and upgrade the transportation infrastructure in the United States has been a source of continued business for us through the last ten years. Fueling the initial growth in this market was the
Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) and subsequent legislation, the Transportation Equity Act for the 21st Century (TEA-21), the Safe, Accountable, Flexible, Efficient Transportation Act: A Legacy
for Users (SAFETEA-LU). The public is beginning to recognize the potential disasters that awaits should our nations acknowledged aging infrastructure not be addressed. Increasingly complex governmental regulations faced by our
clients mean additional opportunities for consultants with specialized knowledge. Despite the need for improvements, federal funds have been stretched, which when combined with the rising costs of construction materials has created some sluggishness
in our industry. Some rebounding took place in 2008 as the industry experienced a slight upturn in aviation and transit funding and as user-fee (toll road) projects continued to show strong growth nationally.

The decline in the residential housing market continued during 2008 as the sub-prime mortgage crisis resulted in tighter credit and lower prices, causing
builders and developers to curtail their operations substantially. The commercial development market, however remained reasonably stable, but may be affected for the remainder of 2008. This was offset by the increase in federal spending associated
with contracts from the Department of Defense for Base Realignment and Closure and U.S. Army Transformation activity, which our civil engineering services strongly support.

In recent years, significant environmental laws at the federal, state and local levels have been enacted in response to public concern over the health of
the nations air, water, and natural resources. Those laws and their implementation through regulations affect numerous industrial and governmental actions and form a key market driver for the services of our Environmental Services segment. Two
federal environmental laws, The Safe Drinking Water Act of 1974 and the Clean Water Act of 1972, continue to influence this segment of our business. Pursuant to these laws, Congress has authorized significant monies to assist state and local
governments. According to the EPA, as much as $23 billion a year will be needed for construction and upgrade of water and wastewater treatment facilities over the next 20 years.

Segment Results of Operations

Our operations are composed of four operating segments for which
financial information is available and is evaluated on a regular basis by its executive decision maker, who has authority to allocate resources and assess performance. We have aggregated these six operating segments into four reportable segments:
Transportation Services, Construction Management, Civil Engineering and Environmental Services. We evaluate performance based on operating income (loss) of the respective operating segment. The discussion that follows is a summary analysis of the
primary changes in operating results by reportable segment for the three-month and six-month periods ended March 31, 2008 as compared to the same periods in 2007.

Activities in the Transportation Services business segment generally involve planning, design, right of way acquisition, development and design of intelligent transportation services and program construction
management services for multiple transportation modes, including interstate and primary highways, toll roads, arterials, bridges, transit systems, airports and port facilities. The Program Management group of our Transportation segment provides many
of its governmental clients the necessary resources to manage large infrastructure programs from concept through construction. Services include planning, programming and contract support.

The Construction Management segment provides a wide range of services as an agent for our clients, including contract administration, inspection,
field-testing, scheduling/estimating, instituting project controls and quality assessment. We provide scheduling, cost estimating and construction observation services for the project, or its services may be limited to providing construction
consulting.



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##### Table of Contents

The Civil Engineering segment, through its two operating segments, Facilities and Federal (formerly known
as Applied Technologies) provides civil engineering as well as specialized services to public and private clients. Included in these services are: site engineering and surveys, infrastructure engineering, master planning, disaster mitigation
planning and response, asset assessment and management, emergency management and architectural and landscape design.

The Environmental
Services business segment, through its two operating segments Environment Sciences and Water, focuses on the delivery of planning, design and construction management services for private and public sector clients related to air quality management,
flood insurance studies, energy planning, hazardous and solid waste management, ecological studies, wastewater treatment, water resources, environmental toxicology analysis, aquatic treatment systems, reclaimed water, and water supply and treatment.

Net earned revenue represents the net effect of gross engineering fees less direct reimbursable expenses. Direct reimbursable expenses are
primarily comprised of subcontractor costs and other direct non-payroll reimbursable charges including travel and travel related costs, blueprints, and equipment where we are responsible for procurement and management of such cost components on
behalf of the our clients. These direct reimbursable expenses are principally passed through to our clients with minimal or no mark-up. Indirect salaries represent wages earned by technical personnel not assigned to client billable projects and
administrative and support personnel wages as well.



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|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|----------------------------------------- |  | ---------------------------- | ------ | - | -------------------------- | ----- | -- | ---- | - | ------ | ------- |  | ----- | ---- |  | - | ------- | - |  | ----- | -- |  | ------- | ------- | - |  | ----- | --
|                                          |  | Three Months Ended March 31, |        |   | Six Months Ended March 31, |      
|                                          |  | 2008                         |        |   | % ofNER                    |       |    | 2007 |   |        | % ofNER |  |       | 2008 |  |   | % ofNER |   |  | 2007  |    |  | % ofNER |        
|Transportation Services                   |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Engineering fees                          |  | $                            | 68,309 |   |                            | 143.4 | %  |      | $ | 55,463 |         |  | 130.5 | %    |  | $ | 126,125 |   |  | 142.1 | %  |  | $       | 105,758 |   |  | 133.0 | % 
|Direct reimbursable expenses              |  |                              | 20,672 |   |                            | 43.4  |    |      |   | 12,963 |         |  | 30.5  |      |  |   | 37,364  |   |  | 42.1  |    |  |         | 26,214  |   |  | 33.0  |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Net earned revenues (NER)                 |  |                              | 47,637 |   |                            | 100.0 |    |      |   | 42,500 |         |  | 100.0 |      |  |   | 88,761  |   |  | 100.0 |    |  |         | 79,544  |   |  | 100.0 |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Direct salaries and direct costs          |  |                              | 17,304 |   |                            | 36.3  |    |      |   | 16,252 |         |  | 38.2  |      |  |   | 32,030  |   |  | 36.1  |    |  |         | 30,032  |   |  | 37.8  |   
|Indirect salaries                         |  |                              | 9,783  |   |                            | 20.5  |    |      |   | 8,611  |         |  | 20.3  |      |  |   | 19,503  |   |  | 22.0  |    |  |         | 17,961  |   |  | 22.6  |   
|General and administrative costs          |  |                              | 14,902 |   |                            | 31.3  |    |      |   | 14,472 |         |  | 34.1  |      |  |   | 28,916  |   |  | 32.6  |    |  |         | 27,394  |   |  | 34.4  |   
|Insurance proceeds and gain on recoveries |  |                              |       |   |                            |      |    |      |   | (699   | )       |  | (1.6  | )    |  |   |        |   |  |      |    |  |         | (691    | ) |  | (0.9  | ) 
|Investigation and related costs           |  |                              |       |   |                            |      |    |      |   | 431    |         |  | 1.0   |      |  |   |        |   |  |      |    |  |         | 1,133   |   |  | 1.4   |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Total costs and expenses                  |  |                              | 41,989 |   |                            | 88.1  |    |      |   | 39,067 |         |  | 91.9  |      |  |   | 80,449  |   |  | 90.6  |    |  |         | 75,829  |   |  | 95.3  |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Operating income                          |  | $                            | 5,648  |   |                            | 11.9  | %  |      | $ | 3,433  |         |  | 8.1   | %    |  | $ | 8,312   |   |  | 9.4   | %  |  | $       | 3,715   |   |  | 4.7   | % 
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|                                          |  |                              |        |   |                            |       |    |     
|Construction Management                   |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Engineering fees                          |  | $                            | 18,852 |   |                            | 119.1 | %  |      | $ | 22,916 |         |  | 117.9 | %    |  | $ | 39,116  |   |  | 118.9 | %  |  | $       | 43,446  |   |  | 120.2 | % 
|Direct reimbursable expenses              |  |                              | 3,027  |   |                            | 19.1  |    |      |   | 3,471  |         |  | 17.9  |      |  |   | 6,215   |   |  | 18.9  |    |  |         | 7,292   |   |  | 20.2  |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Net earned revenues (NER)                 |  |                              | 15,825 |   |                            | 100.0 |    |      |   | 19,445 |         |  | 100.0 |      |  |   | 32,901  |   |  | 100.0 |    |  |         | 36,154  |   |  | 100.0 |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Direct salaries and direct costs          |  |                              | 5,768  |   |                            | 36.4  |    |      |   | 7,461  |         |  | 38.4  |      |  |   | 12,332  |   |  | 37.5  |    |  |         | 14,175  |   |  | 39.2  |   
|Indirect salaries                         |  |                              | 2,609  |   |                            | 16.5  |    |      |   | 3,126  |         |  | 16.1  |      |  |   | 6,442   |   |  | 19.6  |    |  |         | 6,599   |   |  | 18.3  |   
|General and administrative costs          |  |                              | 5,631  |   |                            | 35.6  |    |      |   | 5,985  |         |  | 30.8  |      |  |   | 11,500  |   |  | 35.0  |    |  |         | 11,463  |   |  | 31.7  |   
|Insurance proceeds and gain on recoveries |  |                              |       |   |                            |      |    |      |   | (292   | )       |  | (1.5  | )    |  |   |        |   |  |      |    |  |         | (289    | ) |  | (0.8  | ) 
|Investigation and related costs           |  |                              |       |   |                            |      |    |      |   | 176    |         |  | 0.9   |      |  |   |        |   |  |      |    |  |         | 474     |   |  | 1.3   |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Total costs and expenses                  |  |                              | 14,008 |   |                            | 88.5  |    |      |   | 16,456 |         |  | 84.6  |      |  |   | 30,274  |   |  | 92.0  |    |  |         | 32,422  |   |  | 89.7  |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Operating income                          |  | $                            | 1,817  |   |                            | 11.5  | %  |      | $ | 2,989  |         |  | 15.4  | %    |  | $ | 2,627   |   |  | 8.0   | %  |  | $       | 3,732   |   |  | 10.3  | % 
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|                                          |  |                              |        |   |                            |       |    |     
|Civil Engineering                         |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Engineering fees                          |  | $                            | 37,847 |   |                            | 121.4 | %  |      | $ | 36,948 |         |  | 120.1 | %    |  | $ | 73,678  |   |  | 121.1 | %  |  | $       | 67,666  |   |  | 120.9 | % 
|Direct reimbursable expenses              |  |                              | 6,660  |   |                            | 21.4  |    |      |   | 6,193  |         |  | 20.1  |      |  |   | 12,831  |   |  | 21.1  |    |  |         | 11,694  |   |  | 20.9  |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Net earned revenues (NER)                 |  |                              | 31,187 |   |                            | 100.0 |    |      |   | 30,755 |         |  | 100.0 |      |  |   | 60,847  |   |  | 100.0 |    |  |         | 55,972  |   |  | 100.0 |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Direct salaries and direct costs          |  |                              | 11,178 |   |                            | 35.8  |    |      |   | 11,405 |         |  | 37.1  |      |  |   | 21,604  |   |  | 35.5  |    |  |         | 20,779  |   |  | 37.1  |   
|Indirect salaries                         |  |                              | 9,137  |   |                            | 29.3  |    |      |   | 6,623  |         |  | 21.5  |      |  |   | 16,796  |   |  | 27.6  |    |  |         | 13,936  |   |  | 24.9  |   
|General and administrative costs          |  |                              | 12,516 |   |                            | 40.1  |    |      |   | 11,377 |         |  | 37.0  |      |  |   | 23,376  |   |  | 38.4  |    |  |         | 21,862  |   |  | 39.1  |   
|Insurance proceeds and gain on recoveries |  |                              |       |   |                            |      |    |      |   | (558   | )       |  | (1.8  | )    |  |   |        |   |  |      |    |  |         | (552    | ) |  | (1.0  | ) 
|Investigation and related costs           |  |                              |       |   |                            |      |    |      |   | 335    |         |  | 1.1   |      |  |   |        |   |  |      |    |  |         | 904     |   |  | 1.6   |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Total costs and expenses                  |  |                              | 32,831 |   |                            | 105.3 |    |      |   | 29,182 |         |  | 94.9  |      |  |   | 61,776  |   |  | 101.5 |    |  |         | 56,929  |   |  | 101.7 |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Operating income (loss)                   |  | $                            | (1,644 | ) |                            | (5.3  | )% |      | $ | 1,573  |         |  | 5.1   | %    |  | $ | (929    | ) |  | (1.5  | )% |  | $       | (957    | ) |  | (1.7  | )%
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|                                          |  |                              |        |   |                            |       |    |     
|Environmental Services                    |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Engineering fees                          |  | $                            | 30,824 |   |                            | 130.1 | %  |      | $ | 31,843 |         |  | 120.7 | %    |  | $ | 61,290  |   |  | 129.9 | %  |  | $       | 60,014  |   |  | 123.6 | % 
|Direct reimbursable expenses              |  |                              | 7,132  |   |                            | 30.1  |    |      |   | 5,465  |         |  | 20.7  |      |  |   | 14,093  |   |  | 29.9  |    |  |         | 11,467  |   |  | 23.6  |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Net earned revenues (NER)                 |  |                              | 23,692 |   |                            | 100.0 |    |      |   | 26,378 |         |  | 100.0 |      |  |   | 47,197  |   |  | 100.0 |    |  |         | 48,547  |   |  | 100.0 |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Direct salaries and direct costs          |  |                              | 8,330  |   |                            | 35.2  |    |      |   | 9,144  |         |  | 34.7  |      |  |   | 16,191  |   |  | 34.3  |    |  |         | 16,613  |   |  | 34.2  |   
|Indirect salaries                         |  |                              | 6,900  |   |                            | 29.1  |    |      |   | 5,722  |         |  | 21.7  |      |  |   | 13,480  |   |  | 28.6  |    |  |         | 11,853  |   |  | 24.4  |   
|General and administrative costs          |  |                              | 9,365  |   |                            | 39.5  |    |      |   | 9,290  |         |  | 35.2  |      |  |   | 18,358  |   |  | 38.9  |    |  |         | 17,614  |   |  | 36.3  |   
|Insurance proceeds and gain on recoveries |  |                              |       |   |                            |      |    |      |   | (451   | )       |  | (1.7  | )    |  |   |        |   |  |      |    |  |         | (445    | ) |  | (0.9  | ) 
|Investigation and related costs           |  |                              |       |   |                            |      |    |      |   | 276    |         |  | 1.0   |      |  |   |        |   |  |      |    |  |         | 728     |   |  | 1.5   |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Total costs and expenses                  |  |                              | 24,595 |   |                            | 103.8 |    |      |   | 23,981 |         |  | 90.9  |      |  |   | 48,029  |   |  | 101.8 |    |  |         | 46,363  |   |  | 95.5  |   
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   
|Operating income (loss)                   |  | $                            | (903   | ) |                            | (3.8  | )% |      | $ | 2,397  |         |  | 9.1   | %    |  | $ | (832    | ) |  | (1.8  | )% |  | $       | 2,184   |   |  | 4.5   | % 
|                                          |  |                              |        |   |                            |       |    |      |   |        |         |  |       |      |  |   |         |   |  |       |    |  |         |         |   |  |       |   



24



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##### Table of Contents

Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007

Engineering Fees



|                        |  |                              |         |      |   |          |  |   |          |   |  |       |  
|----------------------- |  | ---------------------------- | ------- | ---- | - | -------- |  | - | -------- | - |  | ----- | -
|                        |  | Three Months Ended March 31, |        
|                        |  | 2008                         |         | 2007 |   | $ Change |  |   | % Change |  
|(Dollars in thousands)  |  |                              |         |      |   |          |  |   |          |   |  |       |  
|Transportation Services |  | $                            | 68,309  |      | $ | 55,463   |  | $ | 12,846   |   |  | 23.2  | %
|Construction Management |  |                              | 18,852  |      |   | 22,916   |  |   | (4,064   | ) |  | -17.7 | %
|Civil Engineering       |  |                              | 37,847  |      |   | 36,948   |  |   | 899      |   |  | 2.4   | %
|Environmental Services  |  |                              | 30,824  |      |   | 31,843   |  |   | (1,019   | ) |  | -3.2  | %
|                        |  |                              |         |      |   |          |  |   |          |   |  |       |  
|Total Engineering Fees  |  | $                            | 155,832 |      | $ | 147,170  |  | $ | 8,662    |   |  | 5.9   | %
|                        |  |                              |         |      |   |          |  |   |          |   |  |       |  

Engineering fees for the three-month period ended March 31, 2008, were $155.8 million as
compared to $147.2 million in the same period in 2007, representing an increase of 5.9%. Part of the increase in engineering fees was due to a change in our estimate of the accrued reimbursement liability based on settlements to date and new
information. As a result, we have recorded a reduction in the liability with a corresponding increase in engineering fees in the amount of $552,000 during the three-month period ended March 31, 2008. The adjustment to engineering fees has been
allocated to our segments based on the individual segments proportionate share of engineering fees to total Company engineering fees. The backlog volumes increased by 3.1% in the three-month period ended March 31, 2008 from $569.7 million
at December 31, 2007 to $587.1 million at March 31, 2008.

In the Transportation Services segment, engineering fees increased
23.2% to $68.3 million in the three-month period ended March 31, 2008 from $55.5 million in the same period in 2007. The increase was due primarily from continued increases in workload in projects in aviation, tolls and structures. The increase
in engineering fees also resulted from several contracts, in various regions, which started during the first fiscal quarter of 2008 and have continued into the second fiscal quarter of 2008. The backlog volumes for the Transportation Services
segment at March 31, 2008 increased by 6.7% to $274.0 million from $256.9 million at December 31, 2007.

Engineering fees from
our Construction Management segment decreased 17.7% to $18.9 million in the three-month period ended March 31, 2008 from $22.9 million in the same period in 2007. The decrease in engineering fees in the three-month period ended March 31,
2008 when compared to the same period in 2007 was due primarily to the completion of jobs during the first fiscal quarter of 2008.

Engineering fees from Civil Engineering services increased 2.4% to $37.8 million in the three-month period ended March 31, 2008 from $36.9 million in the same period in 2007. The increase in engineering fees was due to additional work
within the Federal group, including another large contract with MEMA, which started during the first quarter of fiscal 2008, partly offset by the completion of the New Mexico FEMA project. Engineering fees for the facilities group were flat during
the current fiscal quarter in comparison to the same quarter last year. The Facilities group continued to benefit from contracts with the Department of Defense in the East Region, mostly offset by the continued weakening in the private sector
residential housing market, especially in the West and Southeast markets, which affected the engineering components of our private sector land development services. The backlog volumes for the Civil Engineering segment at March 31, 2008
increased by 20.9% to $114.9 million when compared to $95.0 million as of December 31, 2007.

Engineering fees in our Environmental
Services segment experienced a decrease of 3.2% to $30.8 million in the three-month period ended March 31, 2008 from $31.8 million in the same period in 2007. The Environmental Services segment experienced a decrease in engineering fees
resulting from delays in starting new work assignments and a softening of demand for services as a result of economic slowdown. The backlog volumes for the Environmental Services segment at March 31, 2008 decreased by 1.2% to $120.1 million
when compared to $121.5 million as of December 31, 2007.



25



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##### Table of Contents

Net Earned Revenue



|                          |  |                              |         |      |   |          |  |   |          |   |  |       |  
|------------------------- |  | ---------------------------- | ------- | ---- | - | -------- |  | - | -------- | - |  | ----- | -
|                          |  | Three Months Ended March 31, |        
|                          |  | 2008                         |         | 2007 |   | $ Change |  |   | % Change |  
|(Dollars in thousands)    |  |                              |         |      |   |          |  |   |          |   |  |       |  
|Transportation Services   |  | $                            | 47,637  |      | $ | 42,500   |  | $ | 5,137    |   |  | 12.1  | %
|Construction Management   |  |                              | 15,825  |      |   | 19,445   |  |   | (3,620   | ) |  | -18.6 | %
|Civil Engineering         |  |                              | 31,187  |      |   | 30,755   |  |   | 432      |   |  | 1.4   | %
|Environmental Services    |  |                              | 23,692  |      |   | 26,378   |  |   | (2,686   | ) |  | -10.2 | %
|                          |  |                              |         |      |   |          |  |   |          |   |  |       |  
|Total Net Earned Revenues |  | $                            | 118,341 |      | $ | 119,078  |  | $ | (737     | ) |  | -0.6  | %
|                          |  |                              |         |      |   |          |  |   |          |   |  |       |  

Net earned revenue was $118.3 million during the three-month period ended March 31, 2008 as
compared to $119.1 million in the same period in 2007, representing a decrease of 0.6%. This is principally due to growth in the number of prime contracts coupled with the roughly flat overall economic growth in the period.

Direct Reimbursable Expenses



|                                   |  |                              |        |          |      |   |      |   |          |  |      |  
|---------------------------------- |  | ---------------------------- | ------ | -------- | ---- | - | ---- | - | -------- |  | ---- | -
|                                   |  | Three Months Ended March 31, |       
|                                   |  | 2008                         |        | % of NER |      |   | 2007 |   | % of NER | 
|(Dollars in thousands)             |  |                              |        |          |      |   |      |   |          |  |      |  
|Transportation Services            |  | $                            | 20,672 |          | 43.4 | % |      | $ | 12,963   |  | 30.5 | %
|Construction Management            |  |                              | 3,027  |          | 19.1 | % |      |   | 3,471    |  | 17.9 | %
|Civil Engineering                  |  |                              | 6,660  |          | 21.4 | % |      |   | 6,193    |  | 20.1 | %
|Environmental Services             |  |                              | 7,132  |          | 30.1 | % |      |   | 5,465    |  | 20.7 | %
|                                   |  |                              |        |          |      |   |      |   |          |  |      |  
|Total Direct Reimbursable Expenses |  | $                            | 37,491 |          | 31.7 | % |      | $ | 28,092   |  | 23.6 | %
|                                   |  |                              |        |          |      |   |      |   |          |  |      |  

In addition, the change in our NER is affected by the fluctuation in our direct reimbursable
expenses. Direct reimbursable expenses are primarily comprised of subcontractor costs and other direct non-payroll reimbursable charges including travel and travel related costs, blueprints, and equipment where we are responsible for procurement and
management of such cost components on behalf of our clients. These direct reimbursable expenses are principally passed through to our clients with minimal or no mark-up. As a percentage of NER, direct reimbursable expenses increased by 8.1% to 31.7%
in the three-month period ended March 31, 2008 from 23.6% in the same period in 2007. The increase was principally driven by the Transportation Services segment.

In our Transportation Services segment, direct reimbursable expenses as a percentage of NER increased by 12.9% to 43.4% in the three-month period ended March 31, 2008 from 30.5% in the same period in 2007. The
increase is due to subconsultant participation on four large projects in the Highway Design, Aviation & Transit Sectors.

In our
Construction Management segment, direct reimbursable expenses decreased by 12.8% to $3.0 million in the three-month period ended March 31, 2008 when compared to $3.5 million in the same period in 2007. As a percentage of NER, direct
reimbursable expenses increased slightly by 1.2% to 19.1% in the three-month period ended March 31, 2008 from 17.9% in the same period in 2007.

Direct reimbursable expenses in the Civil Engineering segment increased by 7.5% in the three-month period ended March 31, 2008 as compared to the same period in 2007. As a percentage of NER, direct reimbursable
expenses increased by 1.3% to 21.4% in the three-month period ended March 31, 2008 from 20.1% in the same period in 2007. The increase was due to increases in subconsultants in connection with the Department of Defense and MEMA contracts,
partly offset by the decrease in subconsultants resulting from the winding down of the New Mexico FEMA contract.

The Environmental
Services segment experienced an increase in direct reimbursable expenses as a percentage of NER of 9.4% to 30.1% in the three-month period ended March 31, 2008 as compared to 20.7% in the same period in 2007. The increase was due primarily to
the increased usage of specialized subconsultants, primarily with clients in the Water market.



26



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##### Table of Contents

Operating Income



|                                                                                                                |  |                              |        |   |          |      |   |      |   |        |          |  |      |  
|--------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------ | - | -------- | ---- | - | ---- | - | ------ | -------- |  | ---- | -
|                                                                                                                |  | Three Months Ended March 31, |       
|                                                                                                                |  | 2008                         |        |   | % of NER |      |   | 2007 |   |        | % of NER | 
|(Dollars in thousands)                                                                                          |  |                              |        |   |          |      |   |      |   |        |          |  |      |  
|Transportation Services                                                                                         |  | $                            | 5,648  |   |          | 11.9 | % |      | $ | 3,433  |          |  | 8.1  | %
|Construction Management                                                                                         |  |                              | 1,817  |   |          | 11.5 | % |      |   | 2,989  |          |  | 15.4 | %
|Civil Engineering                                                                                               |  |                              | (1,644 | ) |          | -5.3 | % |      |   | 1,573  |          |  | 5.1  | %
|Environmental Services                                                                                          |  |                              | (903   | ) |          | -3.8 | % |      |   | 2,397  |          |  | 9.1  | %
|                                                                                                                |  |                              |        |   |          |      |   |      |   |        |          |  |      |  
|Total Operating Income                                                                                          |  |                              | 4,918  |   |          | 4.2  | % |      |   | 10,392 |          |  | 8.7  | %
|                                                                                                                |  |                              |        |  
|Insurance Proceeds and Gain on Recoveries                                                                       |  |                              |       |   |          | 0.0  | % |      |   | (2,000 | )        |  | -1.7 | %
|Investigation and Related Costs                                                                                 |  |                              |       |   |          | 0.0  | % |      |   | 1,218  |          |  | 1.0  | %
|                                                                                                                |  |                              |        |   |          |      |   |      |   |        |          |  |      |  
|Total Operating Income before Insurance Proceeds and Gain on Recoveries, net of Investigation and Related Costs |  | $                            | 4,918  |   |          | 4.2  | % |      | $ | 9,610  |          |  | 8.1  | %
|                                                                                                                |  |                              |        |   |          |      |   |      |   |        |          |  |      |  

Operating income was $4.9 million during the three-month period ended March 31, 2008 as
compared to 10.4 million in the same period in 2007. The decrease in total operating income in the three-month period ended March 31, 2008 when compared to the same period in 2007 was principally due to a decrease in NER resulting from a
higher usage of subconsultants in relation to the increase in engineering fees in the current quarter, as previously explained, and a less than desirable utilization of our professional staff resulting in lower margin performance, which contributed
to a decrease in NER and an increase in indirect expenses. Part of the increase in indirect salaries was related to non chargeable activities in connection with the ERP implementation, as previously explained. The decrease in operating income in the
three-month period ended March 31, 2008 when compared to the same period last year was partly offset by the $2.0 million insurance proceeds collected in the second fiscal quarter of 2007, partly offset by $1.2 million in investigation and
related costs incurred in the three-month period ended March 31, 2007. Operating income, as a percentage of NER, decreased by 4.5% to 4.2% in the three-month period ended March 31, 2008 from 8.7% in the same period in 2007. Insurance
proceeds and gain on recoveries, net of investigation and related costs are treated as corporate overhead costs, and as such, are allocated to each respective segment. The allocation is based on the segments proportionate share of general and
administrative costs to our total general and administrative costs.

We believe that operating income before gains and losses on recoveries
and investigation and related costs is a useful measure in evaluating our results of operations because the gains and losses on recoveries and investigation and related costs are unusual items which do not reflect the costs or revenues of our
provision of services in the given year. While the misappropriation occurred over a long period, the recoveries and investigation costs are realized when recovered or incurred and not in relation to the period when the misappropriation occurred. We
believe this measure is helpful for us and for our investors to evaluate the results of our operations and make comparisons between periods.

Operating income before insurance proceeds and gain on recoveries, net of investigation and related costs, was $4.9 million during the three-month period ended March 31, 2008 as compared to $9.6 million in the same period in 2007.
Operating income before insurance proceeds and gain on recoveries, net of investigation and related costs, as a percentage of NER, decreased by 3.9% to 4.2% in the three-month period ended March 31, 2008 from 8.1% in the same period in 2007.
The decrease in total operating income before insurance proceeds and gain on recoveries, net of investigation and related costs in the three-month period ended March 31, 2008 when compared to the same period in 2007 was principally due to a
decrease in NER resulting from a higher usage of subconsultants in relation to the increase in engineering fees in the current quarter, as previously explained, and a less than desirable utilization of our professional staff resulting in lower
margin performance, which contributed to a decrease in NER and an increase in indirect expenses. Part of the increase in indirect salaries was related to non-chargeable activities in connection with the ERP implementation, as previously explained.



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As a percentage of NER, the Transportation Services segments operating income increased by 3.8% to
11.9% in the three-month period ended March 31, 2008 from 8.1% in the same period in 2007. The increase in operating income in the three-month period ended March 31, 2008 was due to the increase in engineering fees, as previously
explained, combined with improvements in labor margin performance. As a percentage of NER, the Transportation Services segments operating income before insurance proceeds and gain on recoveries, net of investigation and related costs increased
by 4.5% to 11.9% in the three-month period ended March 31, 2008 from 7.4% in the same period in 2007. This increase represents strong performance in labor utilization fueled by robust project schedules and the resulting increase in NER.

As a percentage of NER, the Construction Management segments operating income decreased by 3.9% to 11.5% in the three-month period
ended March 31, 2008 from 15.4% in the same period in 2007. This decrease was primarily due to the decrease in engineering fees caused by the completion of projects during the first fiscal quarter of 2008. As a percentage of NER, operating
income before insurance proceeds and gain on recoveries, net of investigation and related costs decreased by 3.3% to 11.5% in the three-month period ended March 31, 2008 from 14.8 % in the same period in 2007.

The Civil Engineering segment experienced a loss of $(1.6) million in the three-month period ended March 31, 2008 as compared to operating income of
$1.6 million in the same period in 2007. This decrease was primarily driven by a decrease in labor utilization, which resulted in a significant increase in indirect labor costs. During the current fiscal quarter, the Civil Engineering segment added
marketing resources to enhance its participation in the Federal market and design build projects and spent time on non-chargeable activities relating to the ERP implementation. Operating income before insurance proceeds and gain on recoveries, net
of investigation and related costs was a loss of $(1.6) million in the three-month period ended March 31, 2008 when compared to operating income of $1.4 million in the same period in 2007.

The Environmental Services segment experienced a loss of approximately $(900,000) in the three-month period ended March 31, 2008 as compared to
operating income of $2.4 million in the same period in 2007. This decrease was primarily due to a decrease in NER resulting from a higher usage of specialized subconsultants in relation to the increase in engineering fees in the current fiscal
quarter and lower utilization of the professional staff in the current fiscal quarter created by the softening demand for services, increased non-chargeable activities relating to the ERP implementation and acquisition activities. Operating income
before insurance proceeds and gain on recoveries, net of investigation and related costs was a loss of approximately $(900,000) in the three-month period ended March 31, 2008 when compared to operating income of $2.2 million in the same period
in 2007.

Costs

Costs consist principally of direct salaries that are chargeable to clients and overhead and general and administrative expenses.

Direct Salaries and Direct Costs



|                                       |  |                              |        |          |      |   |      |   |          |  |      |  
|-------------------------------------- |  | ---------------------------- | ------ | -------- | ---- | - | ---- | - | -------- |  | ---- | -
|                                       |  | Three Months Ended March 31, |       
|                                       |  | 2008                         |        | % of NER |      |   | 2007 |   | % of NER | 
|(Dollars in thousands)                 |  |                              |        |          |      |   |      |   |          |  |      |  
|Transportation Services                |  | $                            | 17,304 |          | 36.3 | % |      | $ | 16,252   |  | 38.2 | %
|Construction Management                |  |                              | 5,768  |          | 36.4 | % |      |   | 7,461    |  | 38.4 | %
|Civil Engineering                      |  |                              | 11,178 |          | 35.8 | % |      |   | 11,405   |  | 37.1 | %
|Environmental Services                 |  |                              | 8,330  |          | 35.2 | % |      |   | 9,144    |  | 34.7 | %
|                                       |  |                              |        |          |      |   |      |   |          |  |      |  
|Total Direct Salaries and Direct Costs |  | $                            | 42,580 |          | 36.0 | % |      | $ | 44,262   |  | 37.2 | %
|                                       |  |                              |        |          |      |   |      |   |          |  |      |  

Direct salaries and direct costs primarily include direct salaries and to a lesser extent
unreimburseable direct costs. Direct salaries and direct costs were $42.6 million in the three-month period ended March 31, 2008 as compared to $44.3 million in the same period in 2007, representing a decrease of 3.8%. As a percentage of NER,
direct salaries and direct costs decreased by 1.2% to 36.0% in the three-month period ended March 31, 2008 from 37.2% in the same period in 2007.



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##### Table of Contents

Direct salaries and direct costs in the Transportation Services segment increased by 6.5% to $17.3
million in the three-month period ended March 31, 2008 from $16.3 million in the same period in 2007. Direct salaries and direct costs increased as a result of additional workload and is reflected in the increase in NER. As a percentage of NER,
direct salaries and direct costs decreased by 1.9% to 36.3% in the three-month period ended March 31, 2008 from 38.2% in the same period in 2007. This decrease was due primarily to improvements in labor utilization.

Direct salaries and direct costs in the Construction Management segment decreased 22.7% to $5.8 million in the three-month period ended March 31,
2008 from $7.5 million in the same period in 2007. This decrease was due primarily to headcount reductions in response to the completions of projects, as previously explained. As a percentage of NER, direct salaries and direct costs decreased by
2.0% to 36.4% in the three-month period ended March 31, 2008 from 38.4% in the same period in 2007.

Direct salaries and direct costs
in the Civil Engineering segment decreased 2.0% to $11.2 million in the three-month period ended March 31, 2008 from 11.4 million in the same period in 2007. As a percentage of NER, direct salaries and direct costs decreased by 1.3% to
35.8% in the three-month period ended March 31, 2008 from 37.1% in the same period in 2007. This decrease was due to headcount reductions in response to weakening demand for services.

Direct salaries and direct costs in the Environmental Services segment decreased 8.9% to $8.3 million in the three-month period ended March 31, 2008
from $9.1 million in the same period in 2007 reflecting the softening in demand for our services. As a percentage of NER, direct salaries and direct costs increased by 0.5% to 35.2% in the three-month period ended March 31, 2008 from 34.7% in
the same period in 2007.

General and Administrative Costs, including Indirect Salaries

The other component of costs is indirect costs, which include indirect salaries, and general and administrative costs.

Indirect Salaries



|                        |  |                              |        |          |      |   |      |   |          |  |      |  
|----------------------- |  | ---------------------------- | ------ | -------- | ---- | - | ---- | - | -------- |  | ---- | -
|                        |  | Three Months Ended March 31, |       
|                        |  | 2008                         |        | % of NER |      |   | 2007 |   | % of NER | 
|(Dollars in thousands)  |  |                              |        |          |      |   |      |   |          |  |      |  
|Transportation Services |  | $                            | 9,783  |          | 20.5 | % |      | $ | 8,611    |  | 20.3 | %
|Construction Management |  |                              | 2,609  |          | 16.5 | % |      |   | 3,126    |  | 16.1 | %
|Civil Engineering       |  |                              | 9,137  |          | 29.3 | % |      |   | 6,623    |  | 21.5 | %
|Environmental Services  |  |                              | 6,900  |          | 29.1 | % |      |   | 5,722    |  | 21.7 | %
|                        |  |                              |        |          |      |   |      |   |          |  |      |  
|Total Indirect Salaries |  | $                            | 28,429 |          | 24.0 | % |      | $ | 24,082   |  | 20.2 | %
|                        |  |                              |        |          |      |   |      |   |          |  |      |  

Indirect salaries increased 18.1% to $28.4 million in the three-month period ended March 31,
2008 from $24.1 million in the same period in 2007. Indirect salaries, as a percentage of NER, increased by 3.8% to 24.0% in the three-month period ended March 31, 2008 from 20.2% in the same period in 2007.

The Transportation Services segment experienced an increase in indirect salaries of 13.6% to $9.8 million in the three-month period ended March 31,
2008 from $8.6 million in the same period in 2007. As a percentage of NER, indirect salaries increased slightly by 0.2% to 20.5% in the three-month period ended March 31, 2008 from 20.3% in the same period in 2007. This was primarily due to
increased non-chargeable activities related to the ERP implementation and increased marketing activity.

The Construction Management
segment experienced a decrease in indirect salaries of 16.5% to $2.6 million in the three-month period ended March 31, 2008 from $3.1 million in the same period in 2007. As a percentage of NER, indirect salaries increased by 0.4% to 16.5% in
the three-month period ended March 31, 2008 from 16.1% in the same period in 2007. The overall decrease is associated with the reduction in headcount consistent with the reduction in engineering fees.



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##### Table of Contents

The Civil Engineering segment experienced an increase in indirect salaries of 38.0% to $9.1 million in
the three-month period ended March 31, 2008 from $6.6 million in the same period in 2007. As a percentage of NER, indirect salaries increased by 7.8% to 29.3% in the three-month period ended March 31, 2008 from 21.5% in the same period in
2007. This increase in indirect salaries was primarily due to additional expenditures for business development and less than desirable chargeability of the labor staff in the three-month period ended March 31, 2008 as compared to the same
period in 2007, including time spent on non-chargeable activities relating to the ERP implementation.

Indirect salaries in our
Environmental Services segment increased by 20.6% to $6.9 million in the three-month period ended March 31, 2008 from $5.7 million in the same period in 2007. Indirect salaries, as a percentage of NER increased by 7.4% to 29.1% in the
three-month period ended March 31, 2008 from 21.7% in the same period in 2007. This increase was due primarily to lower utilization of the professional staff in the current fiscal quarter when compared to the same fiscal quarter a year ago,
resulting from time spent on non-chargeable activities relating to the ERP implementation and acquisition activities.

General &
Administrative Costs



|                                     |  |                              |        |          |      |   |      |   |          |  |      |  
|------------------------------------ |  | ---------------------------- | ------ | -------- | ---- | - | ---- | - | -------- |  | ---- | -
|                                     |  | Three Months Ended March 31, |       
|                                     |  | 2008                         |        | % of NER |      |   | 2007 |   | % of NER | 
|(Dollars in thousands)               |  |                              |        |          |      |   |      |   |          |  |      |  
|Transportation Services              |  | $                            | 14,902 |          | 31.3 | % |      | $ | 14,472   |  | 34.1 | %
|Construction Management              |  |                              | 5,631  |          | 35.6 | % |      |   | 5,985    |  | 30.8 | %
|Civil Engineering                    |  |                              | 12,516 |          | 40.1 | % |      |   | 11,377   |  | 37.0 | %
|Environmental Services               |  |                              | 9,365  |          | 39.5 | % |      |   | 9,290    |  | 35.2 | %
|                                     |  |                              |        |          |      |   |      |   |          |  |      |  
|Total General & Administrative Costs |  | $                            | 42,414 |          | 35.8 | % |      | $ | 41,124   |  | 34.5 | %
|                                     |  |                              |        |          |      |   |      |   |          |  |      |  

General and administrative costs increased 3.1% to $42.4 million in the three-month period ended
March 31, 2008 from $41.1 million in the same period in 2007. The majority of the increase is primarily related to increases in legal fees of $1.7 million, including legal expenses incurred in connection with our lawsuit against our insurance
carrier under our crime liability insurance, building rent expense of $739,000 from new and renewal of lease obligations, expense for software and computer supplies of $580,000 and travel and related expenses of $440,000 in connection with the ERP
implementation. These increases were partly offset by a decrease in incentive compensation of $1.9 million resulting from a decrease in profitability in the current fiscal quarter when compared to the same period last year. Most of these costs are
generally considered corporate costs which benefit all segments and are allocated to the respective segments based on the individual segments proportionate share of general and administrative costs as compared to total general and
administrative costs. General and administrative costs, as a percentage of NER, increased by 1.3% to 35.8% in the three-month period ended March 31, 2008 from 34.5% in the same period in 2007.

(Gain)Loss on Recoveries and Investigation and Related Costs

During the three-month period ended March 31, 2008, there were no gains or losses on recovered assets nor any investigation and related costs. During the three-month period ended March 31, 2007, we
recognized $2.0 million in insurance proceeds related to a claim filed by us under our crime liability insurance policy. Additionally, in the three-month period ended March 31, 2007, we incurred $1.2 million in investigation and related costs.
The insurance proceeds and the investigation and related costs have been allocated to our segments based on the individual segments proportionate share of general and administrative costs to our total general and administrative costs.



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##### Table of Contents

Six months Ended March 31, 2008 Compared to Six months Ended March 31, 2007

Engineering Fees



|                        |  |                            |         |      |   |          |  |   |          |   |  |       |  
|----------------------- |  | -------------------------- | ------- | ---- | - | -------- |  | - | -------- | - |  | ----- | -
|                        |  | Six Months Ended March 31, |        
|                        |  | 2008                       |         | 2007 |   | $ Change |  |   | % Change |  
|(Dollars in thousands)  |  |                            |         |      |   |          |  |   |          |   |  |       |  
|Transportation Services |  | $                          | 126,125 |      | $ | 105,758  |  | $ | 20,367   |   |  | 19.3  | %
|Construction Management |  |                            | 39,116  |      |   | 43,446   |  |   | (4,330   | ) |  | -10.0 | %
|Civil Engineering       |  |                            | 73,678  |      |   | 67,666   |  |   | 6,012    |   |  | 8.9   | %
|Environmental Services  |  |                            | 61,290  |      |   | 60,014   |  |   | 1,276    |   |  | 2.1   | %
|                        |  |                            |         |      |   |          |  |   |          |   |  |       |  
|Total Engineering Fees  |  | $                          | 300,209 |      | $ | 276,884  |  | $ | 23,325   |   |  | 8.4   | %
|                        |  |                            |         |      |   |          |  |   |          |   |  |       |  

Engineering fees for the six-month period ended March 31, 2008, were $300.2 million as
compared to $276.9 million in the same period in 2007, representing an increase of 8.4%. The Transportation Services and Civil Engineering segments principally accounted for the increase in engineering fees in the six-month period ended
March 31, 2008. These increases were partly offset by a decrease in engineering fees experienced by the Construction Management segment. A portion of the increase in engineering fees was due to a change in our estimate of the accrued
reimbursement liability estimate based on settlements to date and new information. As a result, we have recorded a reduction in the liability with a corresponding increase in engineering fees in the amount of $2.0 million during the six-month period
ended March 31, 2008. The adjustment to engineering fees has been allocated to our segments based on the individual segments proportionate share of engineering fees to total Company engineering fees. The backlog volumes increased by 5.3%
in the six-month period ended March 31, 2008 from $557.5 million at September 30, 2007 to $587.1 million at March 31, 2008.

In the Transportation Services segment, engineering fees increased by 19.3% to $126.1 million in the six-month period ended March 31, 2008 from $105.8 million in the same period in 2007. The increase was due primarily from continued
increases in workload in projects in aviation, tolls and structures. The increase in engineering fees also resulted from several contracts, in various regions, which started during the first fiscal quarter of fiscal 2008 and have continued into the
second fiscal quarter of 2008. The backlog volumes for the Transportation Services segment at March 31, 2008 increased by 4.9% to $274.0 million from $261.2 million at September 30, 2007.

Engineering fees from our Construction Management segment decreased by 10.0% to $39.1 million in the six-month period ended March 31, 2008 from
$43.4 million in the same period in 2007. The decrease in engineering fees in the six-month period ended March 31, 2008 when compared to the same period in 2007 was due primarily to the completion of projects during the first fiscal quarter of
2008. The backlog volumes for the Construction Management segment at March 31, 2008 decreased by 18.6% to $78.1 million when compared to $95.9 million as of September 30, 2007.

Engineering fees from Civil Engineering services increased 8.9% to $73.7 million in the six-month period ended March 31, 2008 from $67.7 million in
the same period in 2007. The increase in engineering fees was primarily attributable to additional assignments in the Facilities group from contracts with the Department of Defense in the East Region. Also contributing to the increase in engineering
fees was additional work within the Federal group, including another large contract with MEMA, which started during the first quarter of fiscal 2008. The increase in engineering fees was partly offset by the completion of the New Mexico FEMA project
and the continued weakening in the private sector residential housing market, especially in the West and Southeast markets, which affected the engineering components of our private sector land development services. The backlog volumes for the Civil
Engineering segment at March 31, 2008 increased by 38.7% to $114.9 million when compared to $82.8 million as of September 30, 2007.



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##### Table of Contents

Engineering fees in our Environmental Services segment experienced an increase of 2.1% to $61.3 million
in the six-month period ended March 31, 2008 from $60.0 million in the same period in 2007. The Environmental Services segment experienced a slight increase in engineering fees resulting from a slowdown in demand for services in the six-month
period ended March 31, 2008 when compared to the same period last year. The backlog volumes for the Environmental Services segment at March 31, 2008 increased by 2.1% to $120.1 million when compared to $117.6 million as of
September 30, 2007.

Net Earned Revenue



|                          |  |                            |         |      |   |          |  |   |          |   |  |      |  
|------------------------- |  | -------------------------- | ------- | ---- | - | -------- |  | - | -------- | - |  | ---- | -
|                          |  | Six Months Ended March 31, |        
|                          |  | 2008                       |         | 2007 |   | $ Change |  |   | % Change |  
|(Dollars in thousands)    |  |                            |         |      |   |          |  |   |          |   |  |      |  
|Transportation Services   |  | $                          | 88,761  |      | $ | 79,544   |  | $ | 9,217    |   |  | 11.6 | %
|Construction Management   |  |                            | 32,901  |      |   | 36,154   |  |   | (3,253   | ) |  | -9.0 | %
|Civil Engineering         |  |                            | 60,847  |      |   | 55,972   |  |   | 4,875    |   |  | 8.7  | %
|Environmental Services    |  |                            | 47,197  |      |   | 48,547   |  |   | (1,350   | ) |  | -2.8 | %
|                          |  |                            |         |      |   |          |  |   |          |   |  |      |  
|Total Net Earned Revenues |  | $                          | 229,706 |      | $ | 220,217  |  | $ | 9,489    |   |  | 4.3  | %
|                          |  |                            |         |      |   |          |  |   |          |   |  |      |  

Net earned revenue was $229.7 million in the six-month period ended March 31, 2008, as
compared to $220.2 million in the same period in 2007, representing an increase of 4.3%. This increase was directly related to the increase in engineering fess, as previously explained, partly offset by the increase in direct reimbursable expenses,
as explained below.

Direct Reimbursable Expenses



|                                   |  |                            |        |          |      |   |      |   |          |  |      |  
|---------------------------------- |  | -------------------------- | ------ | -------- | ---- | - | ---- | - | -------- |  | ---- | -
|                                   |  | Six Months Ended March 31, |       
|                                   |  | 2008                       |        | % of NER |      |   | 2007 |   | % of NER | 
|(Dollars in thousands)             |  |                            |        |          |      |   |      |   |          |  |      |  
|Transportation Services            |  | $                          | 37,364 |          | 42.1 | % |      | $ | 26,214   |  | 33.0 | %
|Construction Management            |  |                            | 6,215  |          | 18.9 | % |      |   | 7,292    |  | 20.2 | %
|Civil Engineering                  |  |                            | 12,831 |          | 21.1 | % |      |   | 11,694   |  | 20.9 | %
|Environmental Services             |  |                            | 14,093 |          | 29.9 | % |      |   | 11,467   |  | 23.6 | %
|                                   |  |                            |        |          |      |   |      |   |          |  |      |  
|Total Direct Reimbursable Expenses |  | $                          | 70,503 |          | 30.7 | % |      | $ | 56,667   |  | 25.7 | %
|                                   |  |                            |        |          |      |   |      |   |          |  |      |  

In addition, the change in our NER is affected by the fluctuation in our direct reimbursable
expenses. Direct reimbursable expenses are primarily comprised of subcontractor costs and other direct non-payroll reimbursable charges including travel and travel related costs, blueprints and equipment where we are responsible for procurement and
management of such cost components on behalf of our clients. These direct reimbursable expenses are principally passed through to our clients with minimal or no mark-up. As a percentage of NER, direct reimbursable expenses increased by 5.0% to 30.7%
in the six-month period ended March 31, 2008 from 25.7% in the same period in 2007. The increase was driven principally by the Transportation Services segment.

In our Transportation Services segment, direct reimbursable expenses increased by 42.5% in the six-month period ended March 31, 2008 as compared to the same period in 2007. As a percentage of NER, direct
reimbursable expenses increased by 9.1% to 42.1% in the six-month period ended March 31, 2008 from 33.0% in the same period in 2007. This increase was due primarily to the high usage of specialized subconsultants with projects in the National
Services Practice group.

In our Construction Management segment, direct reimbursable expenses decreased by 14.8% to $6.2 million in the
six-month periods ended March 31, 2008 from $7.3 million in the same period in 2007. As a percentage of NER, direct reimbursable expenses decreased by 1.2% to 18.9% in the six-month period ended March 31, 2008 from 20.2% in the same period
in 2007. This is consistent with the overall reduction of project fees.



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##### Table of Contents

In our Civil Engineering segment direct reimbursable expenses increased by 9.7% to $12.8 million in the
six-month period ended March 31, 2008 from $11.7 million in the same period in 2007. The increase was due to increases in subconsultants in connection with the Department of Defense and MEMA contracts, partly offset by a decrease in
subconsultants resulting from the winding down of the New Mexico FEMA contracts. As a percentage of NER, direct reimbursable expenses increased by 0.2% to 21.1% in the six-month period ended March 31, 2008 from 20.9% in the same period in 2007.

Our Environmental Services segment experienced an increase of 22.9% in direct reimbursable expenses in the six-month period ended
March 31, 2008 when compared to the same period in fiscal 2007. The increase was due primarily to the high usage of specialized subconsultants, primarily with clients in the Water group. As a percentage of NER, direct reimbursable expenses
increased by 6.3% to 29.9% in the six-month period ended March 31, 2008 from 23.6% in the same period in 2007, reflecting a proportionately lower growth in engineering fees in proportion to the increase in direct reimbursable expenses.

Operating Income



|                                                                                                                |  |                            |       |   |          |      |   |      |   |        |          |  |      |  
|--------------------------------------------------------------------------------------------------------------- |  | -------------------------- | ----- | - | -------- | ---- | - | ---- | - | ------ | -------- |  | ---- | -
|                                                                                                                |  | Six Months Ended March 31, |      
|                                                                                                                |  | 2008                       |       |   | % of NER |      |   | 2007 |   |        | % of NER | 
|(Dollars in thousands)                                                                                          |  |                            |       |   |          |      |   |      |   |        |          |  |      |  
|Transportation Services                                                                                         |  | $                          | 8,312 |   |          | 9.4  | % |      | $ | 3,715  |          |  | 4.7  | %
|Construction Management                                                                                         |  |                            | 2,627 |   |          | 8.0  | % |      |   | 3,732  |          |  | 10.3 | %
|Civil Engineering                                                                                               |  |                            | (929  | ) |          | -1.5 | % |      |   | (957   | )        |  | -1.7 | %
|Environmental Services                                                                                          |  |                            | (832  | ) |          | -1.8 | % |      |   | 2,184  |          |  | 4.5  | %
|                                                                                                                |  |                            |       |   |          |      |   |      |   |        |          |  |      |  
|Total Operating Income                                                                                          |  |                            | 9,178 |   |          | 4.0  | % |      |   | 8,674  |          |  | 3.9  | %
|                                                                                                                |  |                            |       |  
|Insurance Proceeds and Gain on Recoveries                                                                       |  |                            |      |   |          | 0.0  | % |      |   | (1,977 | )        |  | -0.9 | %
|Investigation and Related Costs                                                                                 |  |                            |      |   |          | 0.0  | % |      |   | 3,239  |          |  | 1.5  | %
|                                                                                                                |  |                            |       |   |          |      |   |      |   |        |          |  |      |  
|Total Operating Income before Insurance Proceeds and Gain on Recoveries, net of Investigation and Related Costs |  | $                          | 9,178 |   |          | 4.0  | % |      | $ | 9,936  |          |  | 4.5  | %
|                                                                                                                |  |                            |       |   |          |      |   |      |   |        |          |  |      |  

Operating income increased by 5.8% in the six-month period ended March 31, 2008 to $9.2
million, as compared to $8.7 million in the same period in 2007. The increase in operating income in the six-month period ended March 31, 2008 when compared to the same period in 2007 was due primarily to a decrease in investigation and related
costs of $3.2 million, partly offset by $2.0 million insurance proceeds and gain on recoveries. The increase in operating income in the six-month period ended March 31, 2008 when compared to the same period in 2007 was partly offset by a
decrease in the utilization of our professional staff, which caused less than desirable labor margins and increased indirect salaries. Part of the increase in indirect salaries was related to non-chargeable activities in connection with the ERP
implementation, as previously explained. Operating income, as a percentage of NER, increased slightly by 0.1% to 4.0% in the six-month periods ended March 31, 2008 from 3.9% in the same period in 2007. Insurance proceeds and gain on recoveries,
net of investigation and related costs are treated as corporate overhead costs, and as such, are allocated to each respective segment. The allocation is based on the segments proportionate share of general and administrative
(G&A) costs to total Company G&A costs.

We believe that operating income before insurance proceeds and gain on
recoveries, net of investigation and related costs, is a useful measure in evaluating our results of operations because the insurance proceeds and recoveries and investigation and related costs are unusual items which do not reflect the costs or
revenues of our provision of services in the given year. While the misappropriation occurred over a long period, the insurance proceeds and the recoveries and investigation and costs are realized when recovered or incurred and not in relation to the
period when the misappropriation occurred. We believe this measure is helpful for us and for our investors to evaluate the results of our operations and make comparisons between periods.



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Operating income before insurance proceeds and gain on recoveries, net of investigation and related costs
was $9.2 million in the six-month period ended March 31, 2008, as compared to $9.9 million in the same period in 2007, representing a decrease of 7.6%. Operating income before insurance proceeds and gain on recoveries, net of investigation and
related costs, as a percentage of NER, decreased by 0.5% to 4.0% in the six-month period ended March 31, 2008 from 4.5% in the same period in 2007. The decrease in operating income was due primarily to a decrease in the utilization of our
professional staff, which caused less than desirable labor margins and increased indirect salaries. Part of the increase in indirect salaries was related to non-chargeable activities in connection with the ERP implementation, as previously
explained.

As a percentage of NER, the Transportation Services segments operating income increased by 4.7% to 9.4% in the six-month
period ended March 31, 2008 from 4.7% in the same period in 2007. The increase in operating income in the six-month period ended March 31, 2008 was due to the increase in engineering fees, as previously explained, combined with improvement
in labor utilization. This increase in operating income also benefitted by a decrease in the allocation of investigation and related costs of $1.1 million, net of insurance proceeds and gain on recoveries of approximately $690,000 in the six-month
period ended March 31, 2008 when compared to the same period in 2007. As a percentage of NER, the Transportation Services segments operating income before insurance proceeds and gain on recoveries, net of investigation and related costs
increased by 4.2% to 9.4% in the six-month period ended March 31, 2008 from 5.2% in the same period in 2007.

The Construction
Management segment experienced a decrease in operating income, as a percentage of NER of 2.3% to 8.0% in the six-month period ended March 31, 2008 from 10.3% in the same period in 2007. This decrease was primarily driven by a reduction in
engineering fees, as previously explained. As a percentage of NER, the Construction Management segments operating income before insurance proceeds and gain on recoveries, net of investigation and related costs decreased by 2.8% to 8.0% in the
six-month period ended March 31, 2008 from 10.8% in the same period in 2007.

As a percentage of NER, the Civil Engineering segment
operating (loss) increased by 0.2% to a loss of (1.5)% in the six-month period ended March 31, 2008 from an operating loss of (1.7)% in the same period in 2007. The reduction of the operating (loss) was due primarily to the increase in
engineering fees, as previously explained, and a decrease in the allocation of investigation and related costs of approximately $900,000, net of insurance proceeds and gain on recoveries of approximately of $550,000 in the six-month period ended
March 31, 2008 when compared to the same period in 2007. The improvement in the operating (loss) was mostly offset by additional investment in business development and less than desirable chargeability of the labor staff, including time spent
on non-chargeable activities relating to the ERP implementation. As a percentage of NER, the Civil Engineering segment operating (loss) before insurance proceeds and gain on recoveries, net of investigation and related costs increased by 0.4% to a
loss of (1.5)% in the six-month period ended March 31, 2008 from a loss of (1.1%)% in the same period in 2007.

The Environmental
Services segments operating income (loss) decreased by $3.0 million to a loss of approximately ($830,000) in the six-month period ended March 31, 2008 from $2.2 million in the same period in 2007. The decrease in operating income was
primarily due to a decrease in NER resulting from a higher increase in direct reimbursable expenses as a result of a high usage of specialized subconsultants in the Water group over the modest increase in engineering fees caused by the softening in
demand for our services. Also contributing to the decrease in operating income for the six-month period ended March 31, 2008 over the same period last year was an increase in indirect salaries resulting from lower utilization of our labor staff
caused by the softening in demand for our services and increased non-chargeable activities, primarily the ERP implementation and acquisition activities. The decrease in operating income was partly offset by a decrease in the allocation of
investigation and related costs of approximately $725,000, net of insurance proceeds and gain on recoveries of approximately $445,000 in the six-month period ended March 31, 2008 when compared to the same period in 2007. As a percentage of NER,
the Environmental Services segment operating income before insurance proceeds and gain on recoveries, net of investigation and related costs decreased by 6.9% to a loss of (1.8%)% in the six-month period ended March 31, 2008 from 5.1% in the
same period in 2007.



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Costs

Costs consist principally of direct salaries that are chargeable to clients and overhead and general and administrative expenses.

Direct Salaries and Direct Costs



|                                       |  |                            |        |          |      |   |      |   |          |  |      |  
|-------------------------------------- |  | -------------------------- | ------ | -------- | ---- | - | ---- | - | -------- |  | ---- | -
|                                       |  | Six Months Ended March 31, |       
|                                       |  | 2008                       |        | % of NER |      |   | 2007 |   | % of NER | 
|(Dollars in thousands)                 |  |                            |        |          |      |   |      |   |          |  |      |  
|Transportation Services                |  | $                          | 32,030 |          | 36.1 | % |      | $ | 30,032   |  | 37.8 | %
|Construction Management                |  |                            | 12,332 |          | 37.5 | % |      |   | 14,175   |  | 39.2 | %
|Civil Engineering                      |  |                            | 21,604 |          | 35.5 | % |      |   | 20,779   |  | 37.1 | %
|Environmental Services                 |  |                            | 16,191 |          | 34.3 | % |      |   | 16,613   |  | 34.2 | %
|                                       |  |                            |        |          |      |   |      |   |          |  |      |  
|Total Direct Salaries and Direct Costs |  | $                          | 82,157 |          | 35.8 | % |      | $ | 81,599   |  | 37.1 | %
|                                       |  |                            |        |          |      |   |      |   |          |  |      |  

Direct salaries and direct costs primarily include direct salaries and to a lesser extent
unreimburseable direct costs. Direct salaries and direct costs were $82.2 million in the six-month period ended March 31, 2008, as compared to $81.6 million in the same period in 2007, representing an increase of 0.7%. Direct salaries and
direct costs, as a percentage of NER, decreased by 1.3% to 35.8% in the six-month period ended March 31, 2008 from 37.1% in the same period in 2007.

Direct salaries and direct costs in the Transportation Services segment increased by 6.7% to $32.0 million in the six-month period ended March 31, 2008 from $30.0 million in the same period in 2007. Direct
salaries and direct costs increased as a result of additional workload and is reflected in the increase in NER. As a percentage of NER, direct salaries and direct costs decreased by 1.7% to 36.1% in the six-month period ended March 31, 2008
from 37.8% in the same period in 2007. This decrease was due primarily to improvements in labor utilization.

Direct salaries and direct
costs in the Construction Management segment decreased by 13.0% to $12.3 million in the six-month period ended March 31, 2008 from $14.2 million in the same period in 2007. As a percentage of NER, direct salaries and direct costs decreased by
1.7% to 37.5% in the six-month period ended March 31, 2008 from 39.2% in the same period in 2007. This decrease was primarily due to headcount reductions in response to the completion of projects during the first fiscal quarter of 2008.

Direct salaries and direct costs in the Civil Engineering segment increased 4.0% to $21.6 million in the six-month period ended
March 31, 2008 from $20.8 million in the same period in 2007. As a percentage of NER, direct salaries and direct costs decreased by 1.6% to 35.5% in the six-month period ended March 31, 2008 from 37.1% in the same period in 2007. This
decrease was due to the efficient utilization of the professional staff, which resulted in higher increase in NER in proportion to the increase in direct salaries and direct costs.

Direct salaries and direct costs in the Environmental Services segment decreased by 2.5% to $16.2 million in the six-month period ended March 31,
2008 from $16.6 million in the same period in 2007. As a percentage of NER, direct salaries and direct costs increased slightly by 0.1% to 34.3% in the six-month period ended March 31, 2008 from 34.2% in the same period in 2007.



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General and Administrative Costs, including Indirect Salaries

The other component of costs is indirect costs, which include indirect salaries, and general and administrative costs.



|                        |  |                            |        |          |      |   |      |   |          |  |      |  
|----------------------- |  | -------------------------- | ------ | -------- | ---- | - | ---- | - | -------- |  | ---- | -
|                        |  | Six Months Ended March 31, |       
|                        |  | 2008                       |        | % of NER |      |   | 2007 |   | % of NER | 
|(Dollars in thousands)  |  |                            |        |          |      |   |      |   |          |  |      |  
|Transportation Services |  | $                          | 19,503 |          | 22.0 | % |      | $ | 17,961   |  | 22.6 | %
|Construction Management |  |                            | 6,442  |          | 19.6 | % |      |   | 6,599    |  | 18.3 | %
|Civil Engineering       |  |                            | 16,796 |          | 27.6 | % |      |   | 13,936   |  | 24.9 | %
|Environmental Services  |  |                            | 13,480 |          | 28.6 | % |      |   | 11,853   |  | 24.4 | %
|                        |  |                            |        |          |      |   |      |   |          |  |      |  
|Total Indirect Salaries |  | $                          | 56,221 |          | 24.5 | % |      | $ | 50,349   |  | 22.9 | %
|                        |  |                            |        |          |      |   |      |   |          |  |      |  

Indirect salaries increased 11.7% to $56.2 million in the six-month period ended March 31,
2008 from $50.3 million in the same period in 2007. Indirect salaries, as a percentage of NER, increased by 1.6% to 24.5% in the six-month period ended March 31, 2008 from 22.9% in the same period in 2007.

The Transportation Services segment experienced an increase in indirect salaries of 8.6% to $19.5 million in the six-month period ended March 31,
2008 from $18.0 million in the same period in 2007. As a percentage of NER, indirect salaries decreased by 0.6% to 22.0% in the six-month period ended March 31, 2008 from 22.6% in the same period in 2007. The decrease in indirect salaries, as a
percentage of NER, was due primarily to efficient utilization of the labor staff.

The Construction Management segment experienced a
decrease in indirect salaries of 2.4% to $6.4 million in the six-month period ended March 31, 2008 from $6.6 million in the same period in 2007. As a percentage of NER, indirect salaries increased by 1.3% to 19.6% in the six-month period ended
March 31, 2008 from 18.3% in the same period in 2007. This increase was due primarily to non-chargeable activities relating to the ERP implementation.

The Civil Engineering segment experienced an increase in indirect salaries of 20.5% to $16.8 million in the six-month period ended March 31, 2008 from $13.9 million in the same period in 2007. As a percentage of
NER, indirect salaries increased by 2.7% to 27.6% in the six-month period ended March 31, 2008 from 24.9% in the same period in 2007. This increase in indirect salaries was primarily due to additional investment in business development and less
than desirable chargeability of the labor staff, including time spent on non-chargeable activities relating to the ERP implementation.

Indirect salaries in our Environmental Services segment increased by 13.7% to $13.5 million in the six-month period ended March 31, 2008 from $11.9 million in the same period in 2007. Indirect salaries, as a percentage of NER increased
by 4.2% to 28.6% in the six-month period ended March 31, 2008 from 24.4% in the same period in 2007. This increase was primarily due to less than desirable utilization of the professional staff resulting from a slowdown in demand for services
and increased non-chargeable activities related to the ERP implementation.



|                                     |  |                            |        |          |      |   |      |   |          |  |      |  
|------------------------------------ |  | -------------------------- | ------ | -------- | ---- | - | ---- | - | -------- |  | ---- | -
|                                     |  | Six Months Ended March 31, |       
|                                     |  | 2008                       |        | % of NER |      |   | 2007 |   | % of NER | 
|(Dollars in thousands)               |  |                            |        |          |      |   |      |   |          |  |      |  
|Transportation Services              |  | $                          | 28,916 |          | 32.6 | % |      | $ | 27,394   |  | 34.4 | %
|Construction Management              |  |                            | 11,500 |          | 35.0 | % |      |   | 11,463   |  | 31.7 | %
|Civil Engineering                    |  |                            | 23,376 |          | 38.4 | % |      |   | 21,862   |  | 39.1 | %
|Environmental Services               |  |                            | 18,358 |          | 38.9 | % |      |   | 17,614   |  | 36.3 | %
|                                     |  |                            |        |          |      |   |      |   |          |  |      |  
|Total General & Administrative Costs |  | $                          | 82,150 |          | 35.8 | % |      | $ | 78,333   |  | 35.6 | %
|                                     |  |                            |        |          |      |   |      |   |          |  |      |  

G&A costs increased 4.9% to $82.2 million in the six-month period ended March 31, 2008
from $78.3 million in the same period in 2007. The majority of the increase is primarily related to increases in building rent expense of $ 1.6 million from new and



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renewal of lease obligations, legal fees of $1.4 million, including legal expenses incurred in connection with our lawsuit against our insurance carrier
under our crime liability insurance, expense for software and computer supplies of $400,000 and travel and related expenses of $650,000 in connection with the ERP implementation. Most of these costs are generally considered corporate costs which
benefit all segments and are allocated to the respective segments based on the individual segments proportionate share of G&A costs as compared to total Company G&A costs. G&A as a percentage of NER increased by 0.2% to 35.8% in
the six-month period ended March 31, 2008 from 35.6% in the same period in 2007.

Insurance Proceeds and Gain on Recoveries and Investigation
and Related Costs

During the six-month period ended March 31, 2008, there were no gains or losses on recovered assets nor any
investigation and related costs. During the six-month period ended March 31, 2007, we recognized $2.0 million in insurance proceeds related to a claim filed by us under our crime liability insurance policy. Also during the six-month period
ended March 31, 2007, we recorded a net loss on recoveries of $23,000, consisting of approximately $111,000 of additional losses on disposal of assets held for sale, offset by $88,000 in recoveries of embezzled funds. Additionally, in the
six-month period ended March 31, 2007, we incurred $3.2 million in investigation and related costs. The insurance proceeds, net loss on recoveries and the investigation and related costs have been allocated to our segments based on the
individual segments proportionate share of general and administrative costs to our total general and administrative costs.

Income Taxes

The income tax provisions were $2.1 million and $4.8 million, and $4.2 million and $4.1 million which represented effective tax
rates of 45.1% and 47.0% and 47.4% and 50.6%, for the three-month and six-month periods ended March 31, 2008 and 2007, respectively.

During the quarter ended March 31, 2008, the Company had no changes to its unrecognized tax benefits related to the current, or prior reporting periods, changes in settlements with taxing authorities, nor as a result of the lapse of
any applicable statues of limitations. The Company believes it is reasonably possible that the liability for unrecognized tax benefits at March 31, 2008 may decrease by approximately $2.6 million due to the completion of examinations or the
expiration of the statute of limitations within 12 months of March 31, 2008.

The Company files tax returns with the U.S. Federal
Government, various state and local jurisdictions, as well as Puerto Rico. The Company is subject to periodic audits by the Internal Revenue Service as well as foreign, state and local taxing authorities. These audits may challenge certain of the
Companys tax positions such as the timing and amount of income and deductions and the allocation of taxable income to various tax jurisdictions. Income tax contingencies are accounted for in accordance with FASB Interpretation No. 48,
Accounting for Uncertainty in Income Taxes (FIN 48), and may require significant management judgment in estimating final outcomes. Actual results could materially differ from these estimates and could significantly affect the
Companys effective tax rate and cash flows in future years. With few exceptions, the Company is no longer subject to U.S. Federal, State and Local, or Puerto Rico examination by tax authorities for tax years ending before October 1, 2004.

On February 21, 2008, the Company filed an application with the Internal Revenue Service to change its overall method of tax
reporting from the cash method to the accrual method, effective with the tax year ending September 30, 2008. The effect of this change is to increase the estimated current taxable income by approximately $101 million on a pro rata basis over
the next four years. This method change has no impact on the Companys overall provision for income taxes. The liability for the first year of the method change is included as a component in accounts payable and accrued expenses in the
accompanying condensed consolidated balance sheet as of March 31, 2008. The liability for the second year of the method change is included in the current deferred tax liability and the liability for the third and fourth years of the method
change are included in non-current deferred income tax liability, in the accompanying condensed consolidated balance sheet as of March 31, 2008.



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2. Financial Condition and Capital Resources

Cash Flows from Operating Activities

Net cash used in operating activities totaled $14.9 million in
the six-month period ended March 31, 2008 as compared to net cash used in operating activities of $17.2 million in the same period in 2007. The reduction in net cash used in operations resulted primarily from a decrease in settlement payments
related to the accrued reimbursement liability made to clients of $9.5 million for the six months ended March 31, 2008 as compared to the same period of last year. Also contributing to the reduction in cash used in operating activities was a
larger increase in accounts payable and accrued expenses at March 31, 2008 from September 30, 2007 in comparison to a decrease in accounts payable and accrued expenses in the comparable periods in 2007. This increase in accounts payable
and accrued expenses was primarily due to the implementation of the new accounts payable system in the second fiscal quarter of fiscal 2008. Also contributing to the decrease in net cash used in operating activities during the six-month period ended
March 31, 2008 as compared to the same period in 2007 was a reduction in investigation and related costs of $3.2 million, partly offset by proceeds from an insurance claim of $2.0 million. The reduction in net cash used in operating activities
during the six-month period ended March 31, 2008 when compared to the same period in 2007 was mostly offset by a reduction in cash flows from projects resulting from a larger increase in unbilled fees at March 31, 2008 from
September 30, 2007 in comparison to a smaller increase in unbilled fees in the comparable period in 2007. As more fully explained in footnote No 4 to the Notes to Condensed Consolidated Financial Statements, effective in January 2008, we began
the integration of several existing systems into an Enterprise Resource Planning (ERP) system. As a result of the ERP conversion process, we experienced delays in capturing data required to be included in billings for work performed to
our customers. These delays caused our billings to customers to be late, which accounted for the significant increase in unbilled fees as of March 31, 2008 compared to September 30, 2007.

Our operating cash flows are heavily influenced by changes in the levels of accounts receivables, unbilled fees and billings in excess of cost. Unbilled
fees are created when we recognize revenue. The unbilled fees are normally invoiced the month after the revenue is recognized unless there are contractual provisions which dictate the timing of billing. Unbilled fees which are not invoiced the month
following the revenue are normally invoiced within the following two months. These account balances as well as days sales outstanding (DSO) in accounts receivable and unbilled fees, net of billings in excess of cost, can vary based on
contract terms and contractual milestones and the timing and size of cash receipts. DSO increased to 113 days for the six months period ended March 31, 2008, from 99 days for the fiscal year ended September 30, 2007. We calculate DSO by
dividing accounts receivables, net and unbilled fees less billings in excess of cost by average daily gross revenue for the applicable period. The increase in DSO was driven by the increase in unbilled fees as explained above.

Accounts receivable increased by 1.9% to $85.1 million at March 31, 2008 from $83.5 million at September 30, 2007. This increase was primarily
driven by delays in billing customers due to the implementation of the ERP system. The allowance for doubtful accounts increased by 4.9% to $1.9 million, or 2.2% of accounts receivable, at March 31, 2008 from $1.8 million, or 2.1% of accounts
receivable, at September 30, 2007. Overall the aging of accounts receivable at March 31, 2008 has remained comparable to the aging of accounts receivable at September 30, 2007. The increase in the allowance for doubtful accounts
relates to several specific accounts receivable balances which aged during the current fiscal quarter. We continuously monitor collection efforts and assess the allowance for doubtful accounts. Based on this assessment at March 31, 2008, we
have deemed the allowance for doubtful accounts to be adequate. Unbilled fees increased by 33.9% to $105.1 million at March 31, 2008 from $78.5 million at September 30, 2007. Historically, unbilled fees are primarily related to work
performed in the last month of the fiscal period. Billings usually occur in the month after we recognize the revenue or in accordance with the specific contractual provisions. As previously stated, the increase in unbilled fees relates to the delays
in billing to customers due to the implementation of the ERP system. As of the date of this filing, we have substantially brought our billings to clients current. Approximately 64% of the unbilled fees at March 31, 2008 were billed as of
April 30, 2008. The remainder is expected to be billed within the next two months.



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Cash Flows from Investing Activities

Net cash used in investing activities was $8.7 million and $5.8 million for the six-month periods ended March 31, 2008 and 2007, respectively. Investing activities relating to purchases of property and equipment,
such as survey equipment, computer systems, software applications, furniture and equipment and leasehold improvements were $6.2 million and $5.1 million during the six-month periods ended March 31, 2008 and 2007, respectively.

On February 29, 2008, we acquired 100% of the stock of EcoScience for a price of $2.25 million of which $2.0 million was paid in cash.

Cash Flows from Financing Activities

Net cash
provided by financing activities for the six-month period ended March 31, 2008 was $15.4 million as compared to cash provided by financing activities of $23.0 million in the same period in 2007. The decrease in net cash provided by financing
activities was due primarily to a $7.7 million decrease in net borrowings between the six-month period ended March 31, 2008 and the same period in 2007. This decrease consisted of $27.4 million in net borrowings during the six-month period
ended March 31, 2007, which was used primarily to fund operations and to reduce our accrued reimbursement liability and $19.6 millions in net borrowings during the six-month period ended March 31, 2008, which was used to fund the cash
flows shortfall from projects caused by the increase in unbilled fees, as explained above. Also contributing to the decrease in net cash provided by financing activities for the six-month period ended March 31, 2008 when compared to the same
period last year was an increase of $3.9 million in payments to repurchase common stock from employees, partly offset by the collection of $3.0 million in shareholders loans.

Capital Resources

In November 2007, the Company renegotiated our existing line of credit agreement
with Bank of America, N.A. (the Bank) to increase the line of credit from $58 million to $60 million and to extend the maturity date of June 30, 2008 to a new maturity date of October 2011. As part of the extension agreement,
substantially all the terms and conditions remained the same and the minimum levels of net worth requirement was eliminated from the agreement. The line of credit agreement provides for the issuance of letters of credit. The letters of credit reduce
the maximum amount available for borrowing. As of March 31, 2008 and September 30, 2007, we had letters of credit outstanding totaling $5.4 million and $1.9 million, respectively, including letters of credit for $1.8 million to guarantee
insurance payments. As a result of the issuance of these letters of credit and outstanding borrowings, the maximum amount available for borrowing under the line of credit was $34.9 million and $56.1 million as of March 31, 2008 and
September 30, 2007, respectively.

The interest rate (3.11% at March 31, 2008 and 5.85% at September 30, 2007) is, at our
option, either LIBOR plus 50 basis points (currently in use) or prime minus 125 basis points if our funded debt coverage ratio is less than 2.5. The rate increases to LIBOR plus 75 basis points or prime minus 100 basis points if our funded debt
coverage ratio is between 2.5 to 3.0. The line of credit contains clauses requiring the maintenance of various covenants and financial ratios including a minimum coverage ratio of certain fixed charges and a minimum leverage ratio of earnings before
interest, taxes, depreciation and amortization to funded debt. The line of credit is collateralized by substantially all of our assets. We were in compliance with all financial covenants and ratios as of March 31, 2008.



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On March 19, 2001, we entered into a mortgage note with an original principal amount of $9.0 million
due in monthly installments starting on April 16, 2001, with interest. Interest on the mortgage is LIBOR plus the floating rate margin of not less than 65 basis points and not greater than 90 basis points. A balloon payment is due on the
mortgage on March 16, 2011. The effective interest rate on the mortgage note was 3.43% and 6.19% at March 31, 2008 and September 30, 2007, respectively. Our adjustable rate mortgage calls for an interest rate based on the 30 day LIBOR
plus a margin of .065%. The mortgage agreement contains clauses requiring the maintenance of various covenants and financial ratios. In October 2007, we negotiated a modification to the mortgage note by eliminating the minimum levels of net worth
requirement from the mortgage note. The mortgage note is collateralized by the office building located in Maitland, Florida. We were in compliance with all financial covenants and ratios as of March 31, 2008.

Our capital expenditures are generally for purchases of property and equipment. We spent $6.2 million and $5.1 million on such expenditures for the
six-month periods ended March 31, 2008 and 2007, respectively.

We carry insurance to cover fiduciary and crime liability. These
policies are renewed on an annual basis and were in effect for the periods in which the Participants misappropriated funds. We filed a claim under the annual crime policy for the period ending in April 2005 (the 2005 Policy), to
recover some of the misappropriation losses which resulted from the embezzlement. In January 2007, we received $2.0 million, the stated limit under the 2005 Policy. In August 2007, we filed suit seeking a declaration that the insurance
carrier is obligated to us for losses suffered as a result of the embezzlement for policy years 1991 through 2004. The amount of recovery sought for those policy years is $17 million. At the present time, we are unable to predict the likely outcome
of this legal action and accordingly have not recorded any insurance receivable or reserve.

The stock offering window usually takes place
on an annual basis during the second fiscal quarter. The stock window allows full time and part time regular employees to purchase shares of Class A common stock and existing shareholders to offer shares of common stock for sale to us. Under
our corporate bylaws, we have the right of first refusal to purchase these shares. If we decline to purchase the offered shares, they are offered to the Employee Profit Sharing and Stock Ownership Plan and Trust (ESOP) and then to
all shareholders of the Company.

We cancelled the stock window for fiscal 2007 because we were not current in filing our quarterly reports
for fiscal 2007 with the SEC. Instead we authorized an internal market window (internal window) for employee shareholders to purchase and sell shares of the Company in July 2007. We facilitated this internal window by matching employee
shareholders who wished to purchase and sell shares. We had the option, but not the obligation, to purchase any unmatched sell shares that employee shareholders wished to sell and which did not have a matching employee shareholder purchaser.
Eligible buyers were employees and directors of the Company and the Companys ESOP. At the end of the internal window, there were unmatched sell shares. We did not exercise our right to purchase the unmatched sell shares. The unmatched sell
shares were next offered to the Companys ESOP, which agreed to purchase all of the unmatched sell shares.

As a result of the
internal window, we loaned funds for those shares that were matched, to those employee shareholders who wished to sell their shares for the full amount due. Employee shareholders that wished to purchase matched shares were required to execute
promissory notes (notes) and pledge share agreements as collateral for the notes. The notes were interest free and were due on December 28, 2007. At September 30, 2007, the outstanding balance of the notes was $1.9 million, of
which, approximately $332,000 was classified as other current assets and the remaining balance of $1.6 million was included as a reduction of stockholders equity in the accompanying condensed consolidated balance sheet. As of March 31,
2008, all outstanding notes were collected from employee shareholders.



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During the second quarter of fiscal year 2008, the Company opened the stock window for the purchase
and/or redemption of shares by eligible employees and outside directors at a price of $29.68. Purchasers of shares were given several options for payment, including payroll deductions, balloon payments, up front cash or some combination thereof. The
last payroll deduction will be due on November 28, 2008. As a result of the stock window, the Company sold 140,197 shares for an aggregate amount of $4.2 million. At March 31, 2008, the outstanding balance due to the Company on the shares
sold was $3.0 million, of which, approximately $537,000 was classified as other current assets and the remaining balance of $2.5 million was included as a reduction of stockholders equity in the accompanying condensed consolidated balance
sheet. The Company issued stock in the amount of $5.1 and $4.5 million, in lieu of cash payment, for the matching contribution to the 401(k) plan for calendar years 2007 and 2006, respectively. The Company agreed to redeem 415,187 shares for an
aggregate amount of $12.3 million. As a result, the Company recorded a liability for this aggregate amount, which is reflected in stock redemption payable in the accompanying condensed consolidated balance sheet as of March 31, 2008.

We believe that our existing financial resources, together with our cash flow from operations and availability under our line of credit,
will provide sufficient capital to fund our operations for fiscal year 2008 and beyond.

Inflation

The rate of inflation has not had a material impact on our operations. Moreover, if inflation remains at its recent levels, it is not expected to have a
material impact on our operations for the foreseeable future.

3. Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements other than operating leases for most of our office facilities and certain equipment.

4. Related Party Transactions

At the annual meeting
of the shareholders held on January 28, 2005, the shareholders approved a proposal to authorize the Company to execute an agreement with Richard Wickett, our former Chairman of the Board from 2002 to February 2005 and former Chief Financial
Officer from 1993 to 2004, to allow him to retain his 138,607 shares of the Companys stock, exclusive of his shares owned through the Companys Employee Profit Sharing and Stock Ownership Plan and Trust (ESOP), upon retirement
and offer for sale the shares, in blocks of 46,000, 46,000 and 46,607 shares in February 2005, 2006 and 2007, respectively, at a price determined at the valuation at the fiscal year end immediately preceding the redemption period.

Pursuant to the Companys bylaws, we are permitted to repurchase stock by delivery of a
promissory note to the employee. On February 23, 2006 we repurchased 46,000 shares and 3,400 shares, respectively, of the Companys stock from Richard Wickett and Kathryn Wilson in the original principal amounts of $1.2 million and
$92,000, respectively. The shares were repurchased for $27.00 per share which represents the September 30, 2004 share price, pending completion of the valuation of the Companys stock as of September 30, 2005. At December 31,
2006, we had an accrual of $49,400 for the difference between the purchase price and the September 30, 2005 share value of $28.00. At March 31, 2008, the notes bear interest at the rate of 7.5% per annum and such rate is adjusted to
the then current prime rate of Bank of America on December 31stof each year. Accrued interest and $1 of principal is due monthly on the notes
with all remaining principal and accrued interest due and payable on the five year anniversary of the date of issuance.



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On February 13, 2007, we repurchased an
additional 46,607 shares of the Companys stock from Richard Wickett in the original principal amount of approximately $1.0 million, by issuing a promissory note. The additional shares were purchased for $22.40 which represents 80% of the
September 30, 2005 share price, pending completion of the valuation of the Companys stock as of September 30, 2006. In May 2007, the September 30, 2006 valuation was completed establishing a valuation price of $24.34 per share.
We recorded an additional accrual for the difference between the purchase price and the September 30, 2006 valuation price. The adjusted accrual balance for the stock price differential is approximately $579,000 at March 31, 2008 and
September 30, 2007, and is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets. At March 31, 2008, the note bears interest at the rate of 7.5% per annum and such rate is adjusted
to the then current prime rate of Bank of America on December 31stof each year. Accrued interest and $1 of principal is due monthly on the
note with all remaining principal and accrued interest due and payable on the five year anniversary of the date of issuance.

The balances
of the notes were $2.5 million at March 31, 2008 and September 30, 2007, and were included in other liabilities in the accompanying condensed consolidated balance sheets. Both notes are subject to our right of set off, which permits us to
set off all claims we may have against the payee against amounts due and owing under the notes.

In July 2007, pursuant to the
Companys bylaws, we did not exercise our right of first refusal to redeem the shares offered for redemption by John Shearer, our former National Service Director and Senior Vice President. In accordance with the Companys bylaws, the
shares were next offered to our ESOP plan; the ESOP plan has agreed to redeem the shares over the course of five years. The first annual installment of 54,567 shares was redeemed on July 8, 2007 at the established valuation price of $24.34
for a total of $1.3 million. The ESOP redeemed the second annual installment of 10,940 shares, at the established valuation price of $29.68, on March 31, 2008. The remaining three equal annual installments of 33,261 shares will be redeemed
in the second quarter of each fiscal year beginning with fiscal year 2009 by our ESOP plan at a price per share established by future valuations of the Companys shares.

5. Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards
Board (FASB) issued SFAS No. 160 (SFAS 160), Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No. 51. This standard requires specific financial disclosures of
consolidated noncontrolling interest with the objective of improving the relevance, comparability, and transparency of the financial information relating to non-controlling interest in a consolidated subsidiary. We are required to adopt the
recognition and related disclosure provisions of SFAS 160 beginning with interim periods of fiscal year ending September 30, 2010; earlier adoption is prohibited. The Company does not believe the adoption of SFAS 160 will have a material impact
on its condensed consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007) (SFAS
141(R)), Business Combinations.The objective of this Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about
a business combination and its effects. The Company is required to adopt the recognition and related disclosure provisions of SFAS 141(R) beginning with interim periods of fiscal year ending September 30, 2010; earlier adoption is
prohibited. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements.

In July
2006, the FASB issued Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB No. 109 (FIN 48). This interpretation establishes guidelines and thresholds
that must be met for the recognition and measurement of a tax position taken or expected to be taken on a tax return. The Company adopted FIN 48 in our first quarter of fiscal 2008, beginning on October 1, 2007. As a result of the adoption of
FIN 48, we have recognized a change in the liability for unrecognized tax benefits of $2.5 million and an increase of approximately $200,000 in accrued interest, which was accounted for as a reduction to the October 1, 2007 balance of retained
earnings.



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6. Critical Accounting Policies

For a discussion of our critical accounting policies, see Managements Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the fiscal year ended
September 30, 2007.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

We are subject to interest rate risk through outstanding balances on our variable rate debt. We may mitigate this risk by paying down additional outstanding balances on our variable rate loans, refinancing with fixed
rate permanent debt, or obtaining cash flow hedges. We do not hold market-risk sensitive instruments for trading purposes. We do not hold financial instruments or derivative commodity instruments to hedge any market risk, nor do we currently plan to
employ them in the near future.

The interest rate on the mortgage note was 3.43% and 6.19% at March 31, 2008 and September 30,
2007, respectively. Our adjustable rate mortgage calls for an interest rate based on the 30 day LIBOR plus a margin of .065%.

The interest
rate (3.11% at March 31, 2008 and 5.85% at September 30, 2007) on our revolving line of credit is at our option, either, LIBOR plus 50 basis points (currently in use) or Prime minus 125 basis points if our funded debt coverage ratio is
less than 2.5. The rate increases to LIBOR plus 75 basis points or Prime minus 100 basis points if our funded debt coverage ratio is between 2.5 to 3.0. We mitigate interest rate risk by continually monitoring interest rates and electing the lower
of the LIBOR or prime rate option available under the line of credit. As of March 31, 2008, the fair value of the debt approximates the outstanding principal balance due to the variable rate nature of such instruments.

The interest rates under our revolving line of credit and mortgage note are variable and accordingly we have exposure to market risk. To the extent that
we have borrowings outstanding, there is market risk relating to the amount of such borrowings. We estimate that a one-percentage point increase in interest rates for debt outstanding of $26.3 million as of March 31, 2008 would have resulted in
additional annualized interest costs of approximately $263,000. As of April 30, 2008, debt outstanding has increased to $33.1 million primarily due to cash flows shortfall from operations resulting from delays in billings to our customers,
which slow downed the collections of accounts receivable. We estimate that a one-percentage point increase in interest rates for this outstanding debt would have resulted in additional annualized interest costs of approximately $331,000.

The sensitivity analysis, described above, contains certain simplifying assumptions (for example, it does not consider the impact of changes in
prepayment risk or credit spread risk). Therefore, although it gives an indication of our exposure to changes in interest rates, it is not intended to predict future results and our actual results will likely vary.



|Item 4. | Controls and Procedures
|------- | -----------------------

Attached as exhibits to this Form 10-Q are certifications of our Chief Executive Officer and Chief Financial Officer, which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the Exchange
Act).

Evaluation of disclosure controls and procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities and Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required financial disclosure.

As of the end of the period covered by this report, we
carried out an evaluation, under the supervision and with the participation of the Audit Committee and management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures pursuant to Exchange Act Rule 13a-15(e). Based upon, and as of the date of, this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and



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procedures were effective. Accordingly, management believes that the financial statements included in this Quarterly Report fairly present in all material
respects our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

During the quarter the Company implemented an ERP system in order, among other benefits, to improve the Companys internal
controls over financial reporting. In connection with the implementation, the company experienced an enhancement in its general computer controls relating to segregation of duties and system access privileges. In addition, the company incurred
delays in its billing process relating to the conversion of project data, generated certain invoices outside of its normal control structure, and accrued certain revenue outside of its normal revenue recognition process. We employed additional
procedures to ensure that the client billings and revenues were reasonably reflected in the financial statements. Management expects these adverse changes in its control structure to return to a normal state during the next quarter as the
implementation of the ERP system is finalized and the implementation of Sarbanes Oxley internal controls over financial reporting continues.

Inherent
Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not
expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance
that the control systems objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the
inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our Company have been
detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any systems
design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of a systems control effectiveness into future periods are subject to risks. Over time, controls may become inadequate
because of changes in conditions or deterioration in the degree of compliance with policies or procedures.



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PART II. Other Information



|ITEM 1. | Legal Proceedings
|------- | -----------------

We are
party to several pending legal proceedings arising from our operations. Additionally, if a client were to make a claim against a subcontractor on a project for which the Company was the prime contractor, the Company would be liable if the
subcontractor was not adequately insured or not financially able to settle the claim. We believe that we have sufficient professional liability insurance such that the outcome of any of these proceedings, individually and in the aggregate, will not
have a material adverse effect on our financial position or results of operations. However, if our insurance company were to deny coverage for a significant judgment or if a judgment were entered against us in an amount greater than our coverage, it
could adversely affect our results of operations and financial position.

We maintain a full range of insurance coverage, including
workers compensation, commercial general liability (which includes property coverage), commercial automobile, and professional liability (which includes pollution coverage). Our professional liability coverage is on a claims-made
basis meaning the coverage applies to claims made during a policy year regardless of when the causative action took place. All other coverage are occurrence-basis meaning that the policy in place when the injury or damage occurred
is the policy that responds regardless of when the claim is made. Our professional liability limits per policy year are $45 million with a per claim deductible of $125,000 plus an annual aggregate of $3 million. This coverage would also cover the
Company for a claim against a subcontractor of the Company. Based on our experience with claims and lawsuits we believe that the current levels of coverage are adequate for all of our present operational activities although such coverage may not
prove to be adequate in all cases. A successful catastrophic claim or aggregate of several large claims in amounts in excess of our insurance coverage in any policy year could have a material adverse effect on our financial position and results of
operation.

In July 1998, we entered into an agreement with West Frisco Development Corporation (WFDC) to provide various
services, among which was a flood plain study to be used by WFDC, the City of Frisco and the Federal Emergency Management Agency (FEMA). In 2003, the City of Frisco retained the services of a third-party architecture and engineering firm
in connection with the extension and widening of Teel Road which lies within the greater drainage basin included in the Companys original flood plain study. This architecture and engineering firms assessment of the flood plain study
determined that the Company used incorrect assumptions when calculating the size of the drainage culverts required for the increased development of the areas transportation infrastructure. Based on this assessment, the Company has entered into
negotiations with the City of Frisco to correct the drainage needs to support the Teel Road expansion project. As a result, the Company had recorded an estimated liability of $3.1 million to cover the costs associated with correcting the drainage
needs of the Teel Road expansion project. Included in this estimate is the purchase of a parcel of land for $1.5 million, the remaining balance of $1.4 million and $1.6 million is reflected in other liabilities in the accompanying condensed
consolidated balance sheets as of March 31, 2008 and September 30, 2007, respectively.



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Misappropriation Loss

In connection with an investigation conducted by independent counsel in a prior year, it was revealed that at least $36 million was misappropriated between January 1, 1998 and the discovery of the
misappropriations in March 2005.

The Company determined that the misappropriation scheme led to the overstatement of overhead rates that
the Company used to determine billings in connection with certain of its government contracts. As a result, some government clients were overcharged for the Companys services

The Company determined corrected overhead rates considering the impact of the misappropriations and considering the impact of additional errors
identified and entered into settlement agreements for many of these clients and agencies, including without limitation, the Department of Justice, the State of Texas Department of Transportation and the Florida Department of Transportation. The
Company and its advisors have been working with its government clients to finalize any refundable amounts and estimates that the cumulative refund amount, before any payments, resulting from the overstated overhead rates is $35.6 million through
March 31, 2008, including interest.

The Audit Committee, at the direction of the Corporate Board, disclosed the overstatement of our
overhead rate to our clients and other appropriate government agencies, including the Department of Justice. We have entered into settlement agreements without limitation, with many of these clients and agencies, including the Department of Justice,
The state of Texas Department of Transportation and the Florida Department of Transportation. We have been cooperating with other affected parties to determine the amount of our reimbursement obligations and any other amounts we may be obligated to
pay in order to resolve these issues.

Our Board of Directors, with the assistance of the Audit Committee, instituted immediate corrective
actions and began implementing long-term measures to implement new financial controls and establish procedures to safeguard assets and to establish more accurate accounting and financial reporting practices. These long-term measures are included
within our Ethics and Compliance Program.

In an effort to recover assets that were misappropriated, we have instituted lawsuits against
certain persons who received money from one or more of the participants in the embezzlement scheme. We continue to incur costs associated with such lawsuits, and we may not prevail in these lawsuits. In the event that we do prevail, we may not
actually recover assets from the persons who we sued.

In October 2007, the Federal Election Commission advised us that it was commencing
an investigation into alleged violations of the Federal Election Campaign Act of 1971, as amended, based on the improper campaign contributions including improper use of political action committees. At the present we are unable to predict the likely
outcome of this investigation.

The United States SEC is also conducting an investigation of the accounting irregularities and
misappropriations of funds. We are fully cooperating with the investigation and have produced documents and other information to the commission. At the present time, we are unable to predict the likely outcome of this investigation.



|ITEM 1A. | Risk Factors
|-------- | ------------

Information about risk factors
for the three-month and six-month periods ended March 31, 2008 does not differ materially from that set forth in Part I, Item1A, of our 2007 Annual Report on Form 10-K. Additional risks and uncertainties not presently known to us or that we
currently deem immaterial also may impair our business operations and financial condition.



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|ITEM 2. | Unregistered Sale of Equity Security and Use of Proceeds
|------- | --------------------------------------------------------



|                         |  |                                   |  |                             |       |                                                                               |   |                                                                         |  
|------------------------ |  | --------------------------------- |  | --------------------------- | ----- | ----------------------------------------------------------------------------- | - | ----------------------------------------------------------------------- | -
|                         |  | Total Number ofShares Repurchased |  | Average PricePaid Per Share |       | Total Number of SharesPurchased as Part ofPublicly Announced Plansor
Programs |   | Maximum Number ofShares That May BePurchased Under thePlans or Programs
|January 1 - January 31   |  |                                  |  | $                           |      |                                                                               |  |                                                                         | 
|February 1 - February 28 |  |                                  |  | $                           |      |                                                                               |  |                                                                         | 
|March 1 - March 31       |  | 415,187                           |  | $                           | 29.68 |                                                                               |  |                                                                         | 
|                         |  |                                   |  |                             |       |                                                                               |   |                                                                         |  
|Total                    |  | 415,187                           |  | $                           | 29.68 |                                                                               |  |                                                                         | 
|                         |  |                                   |  |                             |       |                                                                               |   |                                                                         |  



|ITEM 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|ITEM 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



|ITEM 5. | Other Information
|------- | -----------------

None.



|ITEM 6. | Exhibits
|------- | --------

A list of exhibits to this Report is set
forth in the Exhibit Index appearing elsewhere in this Report and is incorporated herein by reference.



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.



|       |  |              |  |                                                  
|------ |  | ------------ |  | -------------------------------------------------
|       |  |              |  | The PBSJ Corporation                             
|       |  |              |  | (Registrant)                                     
|       |  |             
|Dated: |  | May 15, 2008 |  | /s/ John B. Zumwalt III                          
|       |  |              |  | John B. Zumwalt III                              
|       |  |              |  | Chairman of the Board and Chief Executive Officer
|       |  |             
|Dated: |  | May 15, 2008 |  | /s/ Donald J. Vrana                              
|       |  |              |  | Donald J. Vrana                                  
|       |  |              |  | Senior Vice President and Chief Financial Officer



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EXHIBIT INDEX



|              |  |                                                                                                                                                                                                                                                         
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                             
|31.1          |  | Rule 13a-14(a) certification by John B. Zumwalt, III, Chairman and Chief Executive Officer.                                                                                                                                                             
|              | 
|31.2          |  | Rule 13a-14(a) certification by Donald J. Vrana, Senior Vice President and Chief Financial Officer.                                                                                                                                                     
|              | 
|32            |  | Certification of by John B. Zumwalt, III, Chairman and Chief Executive Officer and Donald J. Vrana, Senior Vice President and Chief Financial Officer, pursuant to 18 U.S.C. 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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