##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the three months ended October 2, 2010
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 333-145355
 
 VANGENT, INC.
 Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    20-1961427
(IRS Employer
Identification No.)
 4250 North Fairfax Drive
Suite 1200
Arlington, Virginia 22203
(703) 284-5600
 YES þ NO o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o
 YES o NO þ




---



##### 



VANGENT, INC.
Table of Contents
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of October 2, 2010 and
December 31, 2009 (Unaudited)
    
    
    3Condensed Consolidated Statements of Operations for the three
and nine months ended October 2, 2010 and September 26, 2009
(Unaudited)
    
    
    4Condensed Consolidated Statements of Stockholders Equity and
Comprehensive Loss for the nine months ended October 2, 2010 and
September 26, 2009 (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the nine
months ended October 2, 2010 and September 26, 2009 (Unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    26Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    38Item 4T. Controls and Procedures
    
    
    38PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    38Item 1A. Risk Factors
    
    
    38Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    38Item 3. Defaults Upon Senior Securities
    
    
    38Item 5. Other Information
    
    
    38Item 6. Exhibits
    
    
    39Signature
    
    
    39Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
  Forward-Looking Statements
 Risk Factors
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 Vangent, Inc.
 
 Condensed Consolidated Balance Sheets (Unaudited)
  October 2,
    
    
    December 31,2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    22,568
    
    
    $
    44,638Trade receivables, net
    
    
    124,858
    
    
    
    109,846Prepaid expenses and other assets
    
    
    11,896
    
    
    
    7,424Deferred contract costs
    
    
    1,773
    
    
    
    2,929Assets of discontinued operations
    
    
    7,794
    
    
    
    15,036Total current assets
    
    
    168,889
    
    
    
    179,873Property and equipment, net
    
    
    29,126
    
    
    
    25,124Intangible assets, net
    
    
    161,551
    
    
    
    151,860Goodwill
    
    
    299,056
    
    
    
    268,212Deferred debt financing costs and other
    
    
    9,316
    
    
    
    8,433Assets of discontinued operations
    
    
    
    
    
    
    6,727Total assets
    
    $
    667,938
    
    
    $
    640,229Liabilities and Stockholders EquityCurrent liabilities:Short-term borrowing and current portion
of long-term debt
    
    $
    16,000
    
    
    $
    13,534Accounts payable and accrued liabilities
    
    
    79,348
    
    
    
    64,849Accrued interest payable
    
    
    3,327
    
    
    
    8,186Deferred tax liability
    
    
    4,180
    
    
    
    5,628Deferred revenue
    
    
    9,157
    
    
    
    3,976Liabilities of discontinued operations
    
    
    5,224
    
    
    
    7,521Total current liabilities
    
    
    117,236
    
    
    
    103,694Long-term debt, net of current portion
    
    
    406,754
    
    
    
    406,832Other long-term liabilities
    
    
    7,185
    
    
    
    7,194Deferred tax liability
    
    
    18,297
    
    
    
    12,144Liabilities of discontinued operations
    
    
    1,343
    
    
    
    502Total liabilities
    
    
    550,815
    
    
    
    530,366Commitments and contingencies (Note 11)Stockholders equity:Common stock, $0.01 par value, 1,000 shares authorized, 100 shares issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    208,127
    
    
    
    207,376Accumulated other comprehensive loss
    
    
    (10,622
    )
    
    
    (14,949
    )Accumulated deficit
    
    
    (81,118
    )
    
    
    (82,564
    )Total Vangent stockholders equity
    
    
    116,387
    
    
    
    109,863Noncontrolling interest
    
    
    736
    
    
    
    Total stockholders equity
    
    
    117,123
    
    
    
    109,863Total liabilities and stockholders equity
    
    $
    667,938
    
    
    $
    640,229
   3




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##### Table of Contents



Vangent, Inc.
 
 Condensed Consolidated Statements of Operations (Unaudited)
  Three Months Ended
    
    
    Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    October 2,
    
    
    September 26,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenue
    
    $
    176,406
    
    
    $
    143,454
    
    
    $
    585,449
    
    
    $
    411,442Cost of revenue
    
    
    146,678
    
    
    
    121,132
    
    
    
    487,363
    
    
    
    344,415Gross profit
    
    
    29,728
    
    
    
    22,322
    
    
    
    98,086
    
    
    
    67,027General and administrative expenses
    
    
    11,208
    
    
    
    10,275
    
    
    
    34,892
    
    
    
    29,513Selling and marketing expenses
    
    
    4,762
    
    
    
    4,790
    
    
    
    15,884
    
    
    
    13,319Operating income
    
    
    13,758
    
    
    
    7,257
    
    
    
    47,310
    
    
    
    24,195Interest expense, net
    
    
    7,703
    
    
    
    8,502
    
    
    
    23,301
    
    
    
    25,386Income (loss) from continuing operations
before income taxes
    
    
    6,055
    
    
    
    (1,245
    )
    
    
    24,009
    
    
    
    (1,191
    )Provision for income taxes
    
    
    1,913
    
    
    
    1,629
    
    
    
    5,598
    
    
    
    5,067Income (loss) from continuing operations
    
    
    4,142
    
    
    
    (2,874
    )
    
    
    18,411
    
    
    
    (6,258
    )Loss from discontinued
operations, net of tax
    
    
    (171
    )
    
    
    (2,393
    )
    
    
    (16,956
    )
    
    
    (4,157
    )Net income (loss)
    
    
    3,971
    
    
    
    (5,267
    )
    
    
    1,455
    
    
    
    (10,415
    )Less: Net income attributed to
noncontrolling interest
    
    
    9
    
    
    
    
    
    
    
    9
    
    
    
    Net income (loss) attributable to Vangent
    
    $
    3,962
    
    
    $
    (5,267
    )
    
    $
    1,446
    
    
    $
    (10,415
    )
   4




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##### Table of Contents



Vangent, Inc.
 
 Condensed Consolidated Statements of Stockholders Equity and Comprehensive Loss (Unaudited)
  Accum-ulated
    
    
    
    
    
    
    TotalOther
    
    
    
    
    
    
    Vangent
    
    
    
    
    
    
    TotalAdditional
    
    
    Compre-
    
    
    Accum-
    
    
    Stock-
    
    
    Non-
    
    
    Stock-Common
    
    
    Paid-in
    
    
    hensive
    
    
    ulated
    
    
    holders
    
    
    controlling
    
    
    holdersStock
    
    
    Capital
    
    
    Loss
    
    
    Deficit
    
    
    Equity
    
    
    Interest
    
    
    EquityBalance, December 31, 2008
    
    $
    
    
    
    $
    206,328
    
    
    $
    (13,135
    )
    
    $
    (48,556
    )
    
    $
    144,637
    
    
    $
    
    
    
    $
    144,637Effect of hedging activities, net of tax
    
    
    
    
    
    
    
    
    
    
    2,162
    
    
    
    
    
    
    
    2,162
    
    
    
    
    
    
    
    2,162Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    1,050
    
    
    
    
    
    
    
    1,050
    
    
    
    
    
    
    
    1,050Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,415
    )
    
    
    (10,415
    )
    
    
    
    
    
    
    (10,415
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,203
    )
    
    
    
    
    
    
    (7,203
    )Equity-based compensation
    
    
    
    
    
    
    776
    
    
    
    
    
    
    
    
    
    
    
    776
    
    
    
    
    
    
    
    776Balance, September 26, 2009
    
    $
    
    
    
    $
    207,104
    
    
    $
    (9,923
    )
    
    $
    (58,971
    )
    
    $
    138,210
    
    
    $
    
    
    
    $
    138,210Balance, December 31, 2009
    
    $
    
    
    
    $
    207,376
    
    
    $
    (14,949
    )
    
    $
    (82,564
    )
    
    
    109,863
    
    
    $
    
    
    
    $
    109,863Effect of hedging activities, net of tax
    
    
    
    
    
    
    
    
    
    
    3,270
    
    
    
    
    
    
    
    3,270
    
    
    
    
    
    
    
    3,270Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    1,057
    
    
    
    
    
    
    
    1,057
    
    
    
    
    
    
    
    1,057Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,446
    
    
    
    1,446
    
    
    
    9
    
    
    
    1,455Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,782Buccanneer acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    727
    
    
    
    727Equity-based compensation
    
    
    
    
    
    
    751
    
    
    
    
    
    
    
    
    
    
    
    751
    
    
    
    
    
    
    
    751Balance, October 2, 2010
    
    $
    
    
    
    $
    208,127
    
    
    $
    (10,622
    )
    
    $
    (81,118
    )
    
    $
    116,387
    
    
    $
    736
    
    
    $
    117,123
   5




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##### Table of Contents



Vangent, Inc.
 
 Condensed Consolidated Statements of Cash Flows (Unaudited)
  Nine Months EndedOctober 2,
    
    
    September 26,2010
    
    
    2009Cash flows from operating activitiesNet income (loss)
    
    $
    1,455
    
    
    $
    (10,415
    )Less: Loss from discontinued operations, net of tax
    
    
    (16,956
    )
    
    
    (4,157
    )Income (loss) from continuing operations
    
    
    18,411
    
    
    
    (6,258
    )Adjustments to reconcile income (loss) from continuing operations to net cash
provided by operating activities, excluding effect of acquisition:Amortization of intangible assets
    
    
    16,142
    
    
    
    15,881Depreciation and amortization
    
    
    8,561
    
    
    
    7,951Amortization of deferred debt financing costs
    
    
    1,778
    
    
    
    1,628Equity-based compensation expense
    
    
    751
    
    
    
    776Deferred income taxes
    
    
    4,004
    
    
    
    4,504Changes in operating assets and liabilities:Trade receivables
    
    
    3,883
    
    
    
    9,480Prepaid expenses and other assets
    
    
    (1,250
    )
    
    
    (693
    )Accounts payable and other liabilities
    
    
    (3,358
    )
    
    
    (5,898
    )Continuing operations, net
    
    
    48,922
    
    
    
    27,371Discontinued operations, net
    
    
    (1,180
    )
    
    
    (4,335
    )Net cash provided by operating activities
    
    
    47,742
    
    
    
    23,036Cash flows from investing activitiesAcquisition, net of cash acquired
    
    
    (59,102
    )
    
    
    Capital expenditures
    
    
    (9,377
    )
    
    
    (8,453
    )Continuing operations, net
    
    
    (68,479
    )
    
    
    (8,453
    )Discontinued operations, net
    
    
    (2,729
    )
    
    
    (3,740
    )Net cash used in investing activities
    
    
    (71,208
    )
    
    
    (12,193
    )Cash flows from financing activitiesBorrowing under revolving credit facility
    
    
    16,000
    
    
    
    Repayment of senior secured term loan
    
    
    (13,612
    )
    
    
    Deferred debt financing costs and other
    
    
    (2,011
    )
    
    
    (264
    )Net cash provided by (used in) financing activities, continuing operations
    
    
    377
    
    
    
    (264
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    73
    
    
    
    365Net increase (decrease) in cash and cash equivalents
    
    
    (23,016
    )
    
    
    10,944Total cash and cash equivalents, beginning of period
    
    
    45,584
    
    
    
    21,134Total cash and cash equivalents, end of period
    
    
    22,568
    
    
    
    32,078Less: Cash and cash equivalents, discontinued operations
    
    
    
    
    
    
    2,451Cash and cash equivalents, continuing operations
    
    $
    22,568
    
    
    $
    29,627Supplemental noncash investing and financing activitiesLeasehold improvements provided by lessor under operating leases
    
    $
    840
    
    
    $
    813Notes receivable resulting from sale of subsidary in Argentina
    
    
    590
    
    
    
    Supplemental cash flow informationInterest paid, continuing operations
    
    $
    26,883
    
    
    $
    29,116Income taxes paid:Continuing operations
    
    
    140
    
    
    
    378Discontinued operations
    
    
    615
    
    
    
    401
   6




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##### Table of Contents



Vangent, Inc.
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
  1. Organization and Basis of Presentation
 Basis of Presentation
    Nature of Operations
  Variable Interest Entities
  Fiscal Year and Quarterly Periods
   7




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##### Table of Contents



2. Acquisition of Buccaneer Computer Systems & Service, Inc.
     .
  Purchase ConsiderationCash paid at closing
    
    $
    60,000Other adjustments, net
    
    
    4,099$
    64,099
   8




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##### Table of Contents



Allocation of Purchase ConsiderationCash
    
    $
    897Accounts receivable
    
    
    18,736Property and equipment
    
    
    2,262Intangible assets
    
    
    25,792Goodwill
    
    
    31,267Other assets
    
    
    2,427Less: Liabilities assumed
    
    
    (16,555
    )Net assets acquired
    
    
    64,826Less: Noncontrolling interest
    
    
    (727
    )$
    64,099Allocation of Intangible Assets AcquiredCustomer relationships (eight year life)
    
    $
    23,809Non-compete agreements (three year life)
    
    
    1,983$
    25,792
     Unaudited Pro Forma Information
  Three Months Ended
    
    
    Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    October 2,
    
    
    September 26,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenue
    
    $
    204,492
    
    
    $
    159,348
    
    
    $
    668,962
    
    
    $
    449,640Income (loss) from continuing operations
    
    $
    3,863
    
    
    $
    (3,027
    )
    
    $
    19,144
    
    
    $
    (7,863
    )
   9




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##### Table of Contents



3. Discontinued Operations
   October 2,
    
    
    December 31,2010
    
    
    2009Balance Sheet DataCash
    
    $
    
    
    
    $
    946Trade receivables
    
    
    10,865
    
    
    
    9,323Other assets
    
    
    4,159
    
    
    
    4,767Allowance for expected loss on disposal
    
    
    (7,230
    )
    
    
    Total current assets
    
    
    7,794
    
    
    
    15,036Property and equipment, net
    
    
    
    
    
    
    4,744Deferred income taxes and other
    
    
    
    
    
    
    1,983Total assets
    
    
    7,794
    
    
    
    21,763Current liabilities
    
    
    5,224
    
    
    
    7,521Long-term liabilities
    
    
    1,343
    
    
    
    502Net assets of discontinued operations
    
    $
    1,227
    
    
    $
    13,740
 Three Months Ended
    
    
    Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    October 2,
    
    
    September 26,2010
    
    
    2009
    
    
    2010
    
    
    2009Statements of Operations DataRevenue
    
    $
    7,619
    
    
    $
    5,939
    
    
    $
    21,829
    
    
    $
    16,433Costs and expenses
    
    
    7,050
    
    
    
    7,435
    
    
    
    21,896
    
    
    
    18,327Expected  loss on disposal
    
    
    579
    
    
    
    
    
    
    
    18,474
    
    
    
    Other (income) expense, net
    
    
    (198
    )
    
    
    879
    
    
    
    (944
    )
    
    
    2,811Income (loss) from discontinued operations
before income taxes
    
    
    188
    
    
    
    (2,375
    )
    
    
    (17,597
    )
    
    
    (4,705
    )Provision (benefit) for income taxes
    
    
    359
    
    
    
    18
    
    
    
    (641
    )
    
    
    (548
    )Loss from discontinued operations,
net of tax
    
    $
    (171
    )
    
    $
    (2,393
    )
    
    $
    (16,956
    )
    
    $
    (4,157
    )
   10




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##### Table of Contents



Discontinued Operations in Venezuela  Designation of Venezuelan Economy as Highly Inflationary
  Discontinued Operations in Argentina  Variable Interest Entity
  4. Recent Accounting Pronouncements
 Multiple-Deliverable Revenue Arrangements,
 Certain Revenue Arrangements that Include Software
Elements
 Improving Disclosures about Fair Value Measurements,
 Revenue Recognition  Milestone Method
  11




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##### Table of Contents



Disclosures about the Credit Quality of Financing
Receivables and the Allowance for Credit Losses,
 5. Trade Receivables
 October 2,
    
    
    December 31,2010
    
    
    2009Billed trade receivables
    
    $
    88,637
    
    
    $
    74,929Billable trade receivables
    
    
    23,241
    
    
    
    26,798Unbilled trade receivables pending completion of milestones,
contract authorizations, or retainage
    
    
    12,233
    
    
    
    7,432Other
    
    
    926
    
    
    
    840125,037
    
    
    
    109,999Allowance for doubtful accounts
    
    
    (179
    )
    
    
    (153
    )Trade receivables, net
    
    $
    124,858
    
    
    $
    109,846Trade accounts receivable from major customersDepartment of Health and Human Services
    
    
    37
    %
    
    
    34
    %Department of Education
    
    
    18
    %
    
    
    16
    %Department
of Defense
    
    
    10
    %
    
    
    12
    %
 6. Intangible Assets and Goodwill
 Intangible Assets
 WeightedAverage Life
    
    
    October 2,
    
    
    December 31,(in years)
    
    
    2010
    
    
    2009Indefinite-life intangible assetsIntellectual property
    
    Indefinite
    
    $
    10,328
    
    
    $
    10,328Definite-life intangible assetsCustomer relationships
    
    
    10
    
    
    
    224,860
    
    
    
    201,101Other
    
    
    3
    
    
    
    2,641
    
    
    
    658227,501
    
    
    
    201,759Accumulated amortization
    
    
    
    
    
    
    (76,278
    )
    
    
    (60,227
    )Definite-life intangible assets, net
    
    
    
    
    
    
    151,223
    
    
    
    141,532Intangible assets, net
    
    
    
    
    
    $
    161,551
    
    
    $
    151,860
   12




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##### Table of Contents



Years Ending December 312010 (remaining three months)
    
    $
    6,7372011
    
    
    26,4882012
    
    
    25,6642013
    
    
    24,8102014
    
    
    15,038Thereafter
    
    
    52,486$
    151,223
 Goodwill
 October 2,
    
    
    December 31,2010
    
    
    2009Goodwill
    
    $
    299,056
    
    
    $
    268,212
  7. Short-Term Borrowing and Long-Term Debt
 October 2,
    
    
    December 31,2010
    
    
    2009Short-term borrowingRevolving credit borrowing under senior secured credit facility
with interest at variable rates (2.53% at October 2, 2010)
    
    $
    16,000
    
    
    $
    Long-term debtTerm loan under senior secured credit facility with interest at variable
rates (2.32% at October 2, 2010)
    
    $
    216,754
    
    
    $
    230,3669 5/8% Senior subordinated fixed rate notes, due February 15, 2015
    
    
    190,000
    
    
    
    190,000406,754
    
    
    
    420,366Less: current portion of long-term debt
    
    
    
    
    
    
    (13,534
    )Long-term debt, net of current portion
    
    $
    406,754
    
    
    $
    406,832Scheduled maturities of long-term debt2011
    
    $
    2012
    
    
    1,7112013
    
    
    215,0432014
    
    
    2015
    
    
    190,000$
    406,754
 Senior Secured Credit Facility
   13




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##### Table of Contents



9 5/8% Senior Subordinated Notes
    14




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##### Table of Contents



8. Accumulated Other Comprehensive Loss
  October 2,
    
    
    December 31,2010
    
    
    2009Accumulated other comprehensive lossEffect of hedging activities, net of tax:Continuing operations   Interest rate swap agreements
    
    $
    (1,674
    )
    
    $
    (4,634
    )Discontinued operations  Foreign currency forward contracts
    
    
    (82
    )
    
    
    (392
    )(1,756
    )
    
    
    (5,026
    )Foreign currency cumulative translation adjustments:Continuing operations
    
    
    (5,416
    )
    
    
    (5,287
    )Discontinued operations
    
    
    (3,450
    )
    
    
    (4,636
    )(8,866
    )
    
    
    (9,923
    )Total accumulated other comprehensive loss
    
    $
    (10,622
    )
    
    $
    (14,949
    )
 Hedging ActivitiesContinuing
    
    
    DiscontinuedOperations
    
    
    OperationsForeignInterest
    
    
    CurrencyRate
    
    
    ForwardSwaps
    
    
    Contracts
    
    
    TotalSummary of changes in accumulated other
comprehensive loss for hedging activitiesBalance, December 31, 2009
    
    $
    (4,634
    )
    
    $
    (392
    )
    
    $
    (5,026
    )Change in fair value
    
    
    (898
    )
    
    
    (8
    )
    
    
    (906
    )Reclassification of loss to interest expense
    
    
    3,858
    
    
    
    
    
    
    
    3,858Reclassification of loss to discontinued operations
    
    
    
    
    
    
    318
    
    
    
    318Balance, October 2, 2010
    
    $
    (1,674
    )
    
    $
    (82
    )
    
    $
    (1,756
    )
 . Derivative Instruments, Hedging Activities and Financial Instruments
   Interest Rate Swap Agreements on Variable-Rate Term Loan
  
  15




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##### Table of Contents



Discontinued Operations  Foreign Currency Contracts
  Derivative Instruments and Hedging Activities
  Balance Sheet Data
 Fair Value ofLiability DerivativesOctober 2,
    
    
    December 31,Derivative Contracts
    
    Balance Sheet Location
    
    2010
    
    
    2009Derivatives that qualify as cash flow hedgesInterest rate swap agreements
    
    Accrued liabilities
    
    $
    1,674
    
    
    $
    4,657Foreign currency forward contracts
    
    Discontinued operations
    
    
    
    
    
    
    251Derivatives that do not qualify as cash flow hedgesForeign currency forward contracts
    
    Discontinued operations
    
    
    
    
    
    
    88
  16




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##### Table of Contents



Statements of Operations Data
 Amount of Gain(Loss) RecognizedAmount of Gain
    
    
    
    
    Amount of Gain
    
    
    Location of Gain
    
    in Income on(Loss)
    
    
    
    
    (Loss)
    
    
    (Loss) Recognized in
    
    DerivativeRecognized in
    
    
    
    
    Reclassified from
    
    
    Income on Derivative
    
    (IneffectiveOCI on
    
    
    Location of Gain (Loss)
    
    Accumulated OCI
    
    
    (Ineffective Portion
    
    Portion andDerivative
    
    
    Reclassified from
    
    into Income
    
    
    and Amount
    
    Amount Excluded(Effective
    
    
    Accumulated OCI into
    
    (Effective
    
    
    Excluded from
    
    from EffectivenessDerivative Contracts
    
    Portion)
    
    
    Income (Effective Portion)
    
    Portion)
    
    
    Effectiveness Testing)
    
    Testing)Three Months Ended October 2, 2010Derivatives that qualify as cash flow hedgesInterest rate swap agreements
    
    $
    (276
    )
    
    Interest expense
    
    $
    (1,106
    )
    
    Interest expense
    
    $
    Three Months Ended September 26, 2009Derivatives that qualify as cash flow hedgesInterest rate swap agreements
    
    
    1,006
    
    
    Interest expense
    
    
    (1,807
    )
    
    Interest expense
    
    
    Foreign currency forward contracts
    
    
    34
    
    
    Discontinued operations
    
    
    (192
    )
    
    
    
    
    Nine Months Ended October 2, 2010Derivatives that qualify as cash flow hedgesInterest rate swap agreements
    
    
    (898
    )
    
    Interest expense
    
    
    (3,881
    )
    
    Interest expense
    
    
    23Foreign currency forward contracts
    
    
    (8
    )
    
    Discontinued operations
    
    
    (229
    )
    
    
    
    
    Derivatives that do not qualify as cash flow hedgesForeign currency forward contracts
    
    
    
    
    
    
    
    
    
    
    
    Discontinued operations
    
    
    (89
    )Nine Months Ended September 26, 2009Derivatives that qualify as cash flow hedgesInterest rate swap agreements
    
    
    (1,927
    )
    
    Interest expense
    
    
    (4,600
    )
    
    Interest expense
    
    
    (70
    )Foreign currency forward contracts
    
    
    (730
    )
    
    Discontinued operations
    
    
    (219
    )
    
    
    
    
    
 Fair Value Measurements
  October 2,
    
    
    December 31,2010
    
    
    2009LiabilitiesLevel 1  Quoted prices in active markets for identical items
    
    $
    
    
    
    $
    Level 2  Significant other observable inputs:Interest rate swap agreements
    
    
    1,674
    
    
    
    4,657Foreign currency forward contracts
    
    
    
    
    
    
    339Level 3  Significant unobservable inputs
    
    
    
    
    
    
    
  17




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##### Table of Contents



Fair Value of Financial Instruments
  CarryingAmounts
    
    
    Fair ValueShort-term borrowingVariable-rate revolving credit borrowing under the
senior secured credit facility
    
    $
    16,000
    
    
    $
    16,000Long-term debtVariable-rate term loan under the senior secured credit facility
    
    $
    216,754
    
    
    $
    216,7549 5/8% senior subordinated notes, due February 15, 2015
    
    
    190,000
    
    
    
    174,563$
    406,754
    
    
    $
    391,317Interest rate swap agreements to pay fixed and receive variableAccrued liabilities
    
    $
    1,674
    
    
    $
    1,674
  10. Income Taxes
       18




---



##### Table of Contents



11. Commitments and Contingencies
  12. Equity-Based Compensation
    Class B
    
    
    
    
    
    
    Fair Value ofMembership
    
    
    
    
    
    
    Class BInterests
    
    
    Class B
    
    
    MembershipAvailable for
    
    
    Interests
    
    
    Interests at Date ofGrant
    
    
    Outstanding
    
    
    GrantBalance, December 31, 2009
    
    
    2.0
    %
    
    
    5.6
    %
    
    $
    5,602Granted
    
    
    (0.2
    )
    
    
    0.2
    
    
    
    153Forfeited
    
    
    0.2
    
    
    
    (0.3
    )
    
    
    (178
    )Balance, October 2, 2010
    
    
    2.0
    %
    
    
    5.5
    %
    
    $
    5,577At October 2, 2010:Vested
    
    
    
    
    
    
    2.9
    %Not yet vested
    
    
    
    
    
    
    2.65.5
    %
  Years Ending December 312010 (remaining three months)
    
    $
    2532011
    
    
    1,0112012
    
    
    3522013
    
    
    1512014
    
    
    45$
    1,812
  19




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##### Table of Contents



13. Related Party Transactions
     14. Business Segments and Major Customers
    20




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    October 2,
    
    
    September 26,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenue by business segmentGovernment Group
    
    $
    158,523
    
    
    $
    125,714
    
    
    $
    534,407
    
    
    $
    359,061International Group
    
    
    12,775
    
    
    
    11,072
    
    
    
    35,748
    
    
    
    31,330Human Capital Group
    
    
    5,447
    
    
    
    7,712
    
    
    
    17,416
    
    
    
    24,569Elimination
    
    
    (339
    )
    
    
    (1,044
    )
    
    
    (2,122
    )
    
    
    (3,518
    )Total revenue
    
    $
    176,406
    
    
    $
    143,454
    
    
    $
    585,449
    
    
    $
    411,442Operating income (loss) by business segmentGovernment Group
    
    $
    14,080
    
    
    $
    7,989
    
    
    $
    48,914
    
    
    $
    26,340International Group
    
    
    346
    
    
    
    20
    
    
    
    416
    
    
    
    (90
    )Human Capital Group
    
    
    (660
    )
    
    
    (738
    )
    
    
    (2,002
    )
    
    
    (2,023
    )Other
    
    
    (8
    )
    
    
    (14
    )
    
    
    (18
    )
    
    
    (32
    )Total operating income
    
    
    13,758
    
    
    
    7,257
    
    
    
    47,310
    
    
    
    24,195Interest expense, net
    
    
    7,703
    
    
    
    8,502
    
    
    
    23,301
    
    
    
    25,386Income (loss) from continuing operations
before income taxes
    
    $
    6,055
    
    
    $
    (1,245
    )
    
    $
    24,009
    
    
    $
    (1,191
    )Depreciation and amortizationGovernment Group
    
    $
    7,579
    
    
    $
    6,530
    
    
    $
    22,067
    
    
    $
    20,434International Group
    
    
    374
    
    
    
    789
    
    
    
    1,669
    
    
    
    2,286Human Capital Group
    
    
    309
    
    
    
    372
    
    
    
    967
    
    
    
    1,112Total depreciation and amortization
    
    $
    8,262
    
    
    $
    7,691
    
    
    $
    24,703
    
    
    $
    23,832Revenue from major customers as a percent of total revenueDepartment of Commerce
    
    
    22
    %
    
    
    *
    
    
    
    31
    %
    
    
    *Department of Health and Human Services
    
    
    33
    %
    
    
    41
    %
    
    
    31
    %
    
    
    43
    %Department of Education
    
    
    15
    %
    
    
    16
    %
    
    
    14
    %
    
    
    17
    %Department of Defense
    
    
    *
    
    
    
    *
    
    
    
    *
    
    
    
    10
    %
 
 *
    
    Less than 10%. October 2,
    
    
    December 31,2010
    
    
    2009GoodwillGovernment Group
    
    $
    281,648
    
    
    $
    250,381International Group
    
    
    8,927
    
    
    
    9,350Human Capital Group
    
    
    8,481
    
    
    
    8,481Total goodwill
    
    $
    299,056
    
    
    $
    268,212
  21




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##### Table of Contents



15. Condensed Issuer, Guarantor and Non-Guarantor Financial Information
  Issuer and Non-Guarantor Financial Information
Condensed Combining Balance Sheets

(Unaudited)
 October 2, 2010
    
    
    December 31, 2009Non-
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-Guar-
    
    
    Guar-
    
    
    Elimin-
    
    
    
    
    
    
    
    
    
    
    Guar-
    
    
    Elimin-Issuer
    
    
    antors
    
    
    antors
    
    
    ations
    
    
    Total
    
    
    Issuer
    
    
    antors
    
    
    ations
    
    
    TotalAssetsCurrent assets:Cash and cash equivalents
    
    $
    13,714
    
    
    $
    1,999
    
    
    $
    6,855
    
    
    $
    
    
    
    $
    22,568
    
    
    $
    41,098
    
    
    $
    3,540
    
    
    $
    
    
    
    $
    44,638Trade receivables, net
    
    
    96,436
    
    
    
    18,256
    
    
    
    10,166
    
    
    
    
    
    
    
    124,858
    
    
    
    101,410
    
    
    
    8,436
    
    
    
    
    
    
    
    109,846Prepaid expenses and other
    
    
    9,034
    
    
    
    1,653
    
    
    
    2,982
    
    
    
    
    
    
    
    13,669
    
    
    
    8,594
    
    
    
    1,759
    
    
    
    
    
    
    
    10,353Assets of discontinued operations
    
    
    
    
    
    
    
    
    
    
    7,794
    
    
    
    
    
    
    
    7,794
    
    
    
    
    
    
    
    15,036
    
    
    
    
    
    
    
    15,036Total current assets
    
    
    119,184
    
    
    
    21,908
    
    
    
    27,797
    
    
    
    
    
    
    
    168,889
    
    
    
    151,102
    
    
    
    28,771
    
    
    
    
    
    
    
    179,873Property and equipment, net
    
    
    21,940
    
    
    
    2,258
    
    
    
    4,928
    
    
    
    
    
    
    
    29,126
    
    
    
    22,499
    
    
    
    2,625
    
    
    
    
    
    
    
    25,124Intangible assets, net
    
    
    129,293
    
    
    
    24,240
    
    
    
    8,018
    
    
    
    
    
    
    
    161,551
    
    
    
    144,764
    
    
    
    7,096
    
    
    
    
    
    
    
    151,860Goodwill
    
    
    258,905
    
    
    
    29,963
    
    
    
    10,188
    
    
    
    
    
    
    
    299,056
    
    
    
    258,905
    
    
    
    9,307
    
    
    
    
    
    
    
    268,212Deferred debt financing costs and
other
    
    
    8,578
    
    
    
    682
    
    
    
    56
    
    
    
    
    
    
    
    9,316
    
    
    
    8,379
    
    
    
    54
    
    
    
    
    
    
    
    8,433Investment in and advances to
subsidiaries
    
    
    96,244
    
    
    
    
    
    
    
    
    
    
    
    (96,244
    )
    
    
    
    
    
    
    37,299
    
    
    
    
    
    
    
    (37,299
    )
    
    
    Assets of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,727
    
    
    
    
    
    
    
    6,727Total assets
    
    $
    634,144
    
    
    $
    79,051
    
    
    $
    50,987
    
    
    $
    (96,244
    )
    
    $
    667,938
    
    
    $
    622,948
    
    
    $
    54,580
    
    
    $
    (37,299
    )
    
    $
    640,229Liabilities and Stockholders EquityCurrent liabilities:Current portion of long-term debt
    
    $
    16,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    16,000
    
    
    $
    13,534
    
    
    $
    
    
    
    $
    
    
    
    $
    13,534Accounts payable and other
liabilities
    
    
    69,870
    
    
    
    16,620
    
    
    
    15,580
    
    
    
    (6,058
    )
    
    
    96,012
    
    
    
    74,655
    
    
    
    8,154
    
    
    
    (170
    )
    
    
    82,639Liabilities of discontinued
operations
    
    
    1,676
    
    
    
    
    
    
    
    8,389
    
    
    
    (4,841
    )
    
    
    5,224
    
    
    
    1,230
    
    
    
    9,564
    
    
    
    (3,273
    )
    
    
    7,521Total current liabilities
    
    
    87,546
    
    
    
    16,620
    
    
    
    23,969
    
    
    
    (10,899
    )
    
    
    117,236
    
    
    
    89,419
    
    
    
    17,718
    
    
    
    (3,443
    )
    
    
    103,694Long-term debt, net of current portion
    
    
    406,754
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    406,754
    
    
    
    406,832
    
    
    
    
    
    
    
    
    
    
    
    406,832Other long-term liabilities
    
    
    6,425
    
    
    
    711
    
    
    
    49
    
    
    
    
    
    
    
    7,185
    
    
    
    7,132
    
    
    
    62
    
    
    
    
    
    
    
    7,194Deferred tax liability
    
    
    16,296
    
    
    
    
    
    
    
    2,001
    
    
    
    
    
    
    
    18,297
    
    
    
    9,702
    
    
    
    2,442
    
    
    
    
    
    
    
    12,144Liabilities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    1,343
    
    
    
    
    
    
    
    1,343
    
    
    
    
    
    
    
    502
    
    
    
    
    
    
    
    502Total liabilities
    
    
    517,021
    
    
    
    17,331
    
    
    
    27,362
    
    
    
    (10,899
    )
    
    
    550,815
    
    
    
    513,085
    
    
    
    20,724
    
    
    
    (3,443
    )
    
    
    530,366Total stockholders equity
    
    
    117,123
    
    
    
    61,720
    
    
    
    23,625
    
    
    
    (85,345
    )
    
    
    117,123
    
    
    
    109,863
    
    
    
    33,856
    
    
    
    (33,856
    )
    
    
    109,863Total liabilities and stockholders
equity
    
    $
    634,144
    
    
    $
    79,051
    
    
    $
    50,987
    
    
    $
    (96,244
    )
    
    $
    667,938
    
    
    $
    622,948
    
    
    $
    54,580
    
    
    $
    (37,299
    )
    
    $
    640,229
  22




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##### Table of Contents



Issuer and Non-Guarantor Financial Information  Condensed Combining Statements of Operations (Unaudited)
 Three Months Ended October 2, 2010
    
    
    Three Months Ended September 26, 2009Non
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NonGuar-
    
    
    Guar-
    
    
    Elimin-
    
    
    
    
    
    
    
    
    
    
    Guar-
    
    
    Elimin-Issuer
    
    
    antors
    
    
    antors
    
    
    ations
    
    
    Total
    
    
    Issuer
    
    
    antors
    
    
    ations
    
    
    TotalRevenue
    
    $
    159,619
    
    
    $
    3,603
    
    
    $
    13,184
    
    
    $
    
    
    
    $
    176,406
    
    
    $
    132,519
    
    
    $
    10,935
    
    
    $
    
    
    
    $
    143,454Cost of revenue
    
    
    132,234
    
    
    
    3,291
    
    
    
    11,153
    
    
    
    
    
    
    
    146,678
    
    
    
    111,159
    
    
    
    9,973
    
    
    
    
    
    
    
    121,132Gross profit
    
    
    27,385
    
    
    
    312
    
    
    
    2,031
    
    
    
    
    
    
    
    29,728
    
    
    
    21,360
    
    
    
    962
    
    
    
    
    
    
    
    22,322General and administrative
expenses
    
    
    9,695
    
    
    
    384
    
    
    
    1,129
    
    
    
    
    
    
    
    11,208
    
    
    
    9,976
    
    
    
    299
    
    
    
    
    
    
    
    10,275Selling and marketing expenses
    
    
    4,329
    
    
    
    4
    
    
    
    429
    
    
    
    
    
    
    
    4,762
    
    
    
    4,229
    
    
    
    561
    
    
    
    
    
    
    
    4,790Operating income
    
    
    13,361
    
    
    
    (76
    )
    
    
    473
    
    
    
    
    
    
    
    13,758
    
    
    
    7,155
    
    
    
    102
    
    
    
    
    
    
    
    7,257Interest expense, net
    
    
    7,738
    
    
    
    1
    
    
    
    (36
    )
    
    
    
    
    
    
    7,703
    
    
    
    8,519
    
    
    
    (17
    )
    
    
    
    
    
    
    8,502Equity in net income (loss) of
subsidiaries
    
    
    287
    
    
    
    
    
    
    
    
    
    
    
    (287
    )
    
    
    
    
    
    
    (2,093
    )
    
    
    
    
    
    
    2,093
    
    
    
    Income (loss) from continuing
operations before income taxes
    
    
    5,910
    
    
    
    (77
    )
    
    
    509
    
    
    
    (287
    )
    
    
    6,055
    
    
    
    (3,457
    )
    
    
    119
    
    
    
    2,093
    
    
    
    (1,245
    )Provision for income taxes
    
    
    1,783
    
    
    
    
    
    
    
    130
    
    
    
    
    
    
    
    1,913
    
    
    
    1,582
    
    
    
    47
    
    
    
    
    
    
    
    1,629Income (loss) from continuing
operations
    
    
    4,127
    
    
    
    (77
    )
    
    
    379
    
    
    
    (287
    )
    
    
    4,142
    
    
    
    (5,039
    )
    
    
    72
    
    
    
    2,093
    
    
    
    (2,874
    )Loss from discontinued
operations, net of tax
    
    
    (156
    )
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    (171
    )
    
    
    (228
    )
    
    
    (2,165
    )
    
    
    
    
    
    
    (2,393
    )Net income (loss)
    
    
    3,971
    
    
    
    (77
    )
    
    
    364
    
    
    
    (287
    )
    
    
    3,971
    
    
    
    (5,267
    )
    
    
    (2,093
    )
    
    
    2,093
    
    
    
    (5,267
    )Less: Net
income attributed to noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
(loss) attributable to Vangent
    
    $
    3,971
    
    
    $
    (77
    )
    
    $
    355
    
    
    $
    (287
    )
    
    $
    3,962
    
    
    $
    (5,267
    )
    
    $
    (2,093
    )
    
    $
    2,093
    
    
    $
    (5,267
    )
  23




---



##### Table of Contents



Nine Months Ended October 2, 2010
    
    
    Nine Months Ended September 26, 2009Non
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NonGuar-
    
    
    Guar-
    
    
    Elimin-
    
    
    
    
    
    
    
    
    
    
    Guar-
    
    
    Elimin-Issuer
    
    
    antors
    
    
    antors
    
    
    ations
    
    
    Total
    
    
    Issuer
    
    
    antors
    
    
    ations
    
    
    TotalRevenue
    
    $
    545,807
    
    
    $
    3,603
    
    
    $
    36,039
    
    
    $
    
    
    
    $
    585,449
    
    
    $
    380,493
    
    
    $
    30,949
    
    
    $
    
    
    
    $
    411,442Cost of revenue
    
    
    453,176
    
    
    
    3,291
    
    
    
    30,896
    
    
    
    
    
    
    
    487,363
    
    
    
    316,623
    
    
    
    27,792
    
    
    
    
    
    
    
    344,415Gross profit
    
    
    92,631
    
    
    
    312
    
    
    
    5,143
    
    
    
    
    
    
    
    98,086
    
    
    
    63,870
    
    
    
    3,157
    
    
    
    
    
    
    
    67,027General and administrative
expenses
    
    
    31,721
    
    
    
    384
    
    
    
    2,787
    
    
    
    
    
    
    
    34,892
    
    
    
    28,445
    
    
    
    1,068
    
    
    
    
    
    
    
    29,513Selling and marketing expenses
    
    
    14,432
    
    
    
    4
    
    
    
    1,448
    
    
    
    
    
    
    
    15,884
    
    
    
    11,826
    
    
    
    1,493
    
    
    
    
    
    
    
    13,319Operating income
    
    
    46,478
    
    
    
    (76
    )
    
    
    908
    
    
    
    
    
    
    
    47,310
    
    
    
    23,599
    
    
    
    596
    
    
    
    
    
    
    
    24,195Interest expense, net
    
    
    23,506
    
    
    
    1
    
    
    
    (206
    )
    
    
    
    
    
    
    23,301
    
    
    
    25,434
    
    
    
    (48
    )
    
    
    
    
    
    
    25,386Equity in net income (loss) of
subsidiaries
    
    
    (16,783
    )
    
    
    
    
    
    
    
    
    
    
    16,783
    
    
    
    
    
    
    
    (2,980
    )
    
    
    
    
    
    
    2,980
    
    
    
    Income (loss) from continuing
operations before income taxes
    
    
    6,189
    
    
    
    (77
    )
    
    
    1,114
    
    
    
    16,783
    
    
    
    24,009
    
    
    
    (4,815
    )
    
    
    644
    
    
    
    2,980
    
    
    
    (1,191
    )Provision for income taxes
    
    
    5,213
    
    
    
    
    
    
    
    385
    
    
    
    
    
    
    
    5,598
    
    
    
    4,864
    
    
    
    203
    
    
    
    
    
    
    
    5,067Income (loss) from continuing
operations
    
    
    976
    
    
    
    (77
    )
    
    
    729
    
    
    
    16,783
    
    
    
    18,411
    
    
    
    (9,679
    )
    
    
    441
    
    
    
    2,980
    
    
    
    (6,258
    )Income (loss) from discontinued
operations, net of tax
    
    
    479
    
    
    
    
    
    
    
    (17,435
    )
    
    
    
    
    
    
    (16,956
    )
    
    
    (736
    )
    
    
    (3,421
    )
    
    
    
    
    
    
    (4,157
    )Net income
(loss)
    
    
    1,455
    
    
    
    (77
    )
    
    
    (16,706
    )
    
    
    16,783
    
    
    
    1,455
    
    
    
    (10,415
    )
    
    
    (2,980
    )
    
    
    2,980
    
    
    
    (10,415
    )Less: Net
income attributed to noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net
income (loss) attributable to Vangent
    
    $
    1,455
    
    
    $
    (77
    )
    
    $
    (16,715
    )
    
    $
    16,783
    
    
    $
    1,446
    
    
    $
    (10,415
    )
    
    $
    (2,980
    )
    
    $
    2,980
    
    
    $
    (10,415
    )
  24




---



##### Table of Contents



Issuer and Non-Guarantor Financial Information
Condensed Combining Statements of Cash Flows

(Unaudited)
 Nine Months October 2, 2010
    
    
    Nine Months Ended September 26, 2009Non
    
    
    Elimin-
    
    
    
    
    
    
    
    
    
    
    Non
    
    
    Elimin-Issuer
    
    
    Guarantors
    
    
    Guarantors
    
    
    ations
    
    
    Total
    
    
    Issuer
    
    
    Guarantors
    
    
    ations
    
    
    TotalCash flows from operating activitiesContinuing operations, net
    
    $
    42,146
    
    
    $
    (2,476
    )
    
    $
    9,252
    
    
    $
    
    
    
    
    48,922
    
    
    $
    22,558
    
    
    $
    4,813
    
    
    $
    
    
    
    $
    27,371Discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    (1,180
    )
    
    
    
    
    
    
    (1,180
    )
    
    
    
    
    
    
    (4,335
    )
    
    
    
    
    
    
    (4,335
    )Net cash provided by (used in)
operating activities
    
    
    42,146
    
    
    
    (2,476
    )
    
    
    8,072
    
    
    
    
    
    
    
    47,742
    
    
    
    22,558
    
    
    
    478
    
    
    
    
    
    
    
    23,036Cash flows from investing activitiesAcquisition, net of cash acquired
    
    
    (58,205
    )
    
    
    
    
    
    
    (897
    )
    
    
    
    
    
    
    (59,102
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loans to subsidiaries, net
    
    
    (5,980
    )
    
    
    
    
    
    
    
    
    
    
    5,980
    
    
    
    
    
    
    
    (4,448
    )
    
    
    
    
    
    
    4,448
    
    
    
    Capital expenditures
    
    
    (5,723
    )
    
    
    (25
    )
    
    
    (3,629
    )
    
    
    
    
    
    
    (9,377
    )
    
    
    (8,262
    )
    
    
    (191
    )
    
    
    
    
    
    
    (8,453
    )Continuing operations, net
    
    
    (69,908
    )
    
    
    (25
    )
    
    
    (4,526
    )
    
    
    5,980
    
    
    
    (68,479
    )
    
    
    (12,710
    )
    
    
    (191
    )
    
    
    4,448
    
    
    
    (8,453
    )Discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    (2,729
    )
    
    
    
    
    
    
    (2,729
    )
    
    
    
    
    
    
    (3,740
    )
    
    
    
    
    
    
    (3,740
    )Net cash used in investing
activities
    
    
    (69,908
    )
    
    
    (25
    )
    
    
    (7,255
    )
    
    
    5,980
    
    
    
    (71,208
    )
    
    
    (12,710
    )
    
    
    (3,931
    )
    
    
    4,448
    
    
    
    (12,193
    )Cash flows from financing activitiesBorrowing under revolving credit
facility
    
    
    16,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loans from Vangent, Inc., net
    
    
    
    
    
    
    4,500
    
    
    
    
    
    
    
    (4,500
    )Repayment of senior secured loan
    
    
    (13,612
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,612
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deferred debt financing fees and other
    
    
    (2,011
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,011
    )
    
    
    (191
    )
    
    
    (40
    )
    
    
    
    
    
    
    (231
    )Continuing operations, net
    
    
    377
    
    
    
    4,500
    
    
    
    
    
    
    
    (4,500
    )
    
    
    377
    
    
    
    (191
    )
    
    
    (40
    )
    
    
    
    
    
    
    (231
    )Discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    1,480
    
    
    
    (1,480
    )
    
    
    
    
    
    
    
    
    
    
    4,415
    
    
    
    (4,448
    )
    
    
    (33
    )Net cash provided by (used in)
financing activities
    
    
    377
    
    
    
    4,500
    
    
    
    1,480
    
    
    
    (5,980
    )
    
    
    377
    
    
    
    (191
    )
    
    
    4,375
    
    
    
    (4,448
    )
    
    
    (264
    )Effect of exchange rate changes on
cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    73
    
    
    
    
    
    
    
    73
    
    
    
    
    
    
    
    365
    
    
    
    
    
    
    
    365Net increase (decrease) in cash
and cash equivalents
    
    
    (27,385
    )
    
    
    1,999
    
    
    
    2,370
    
    
    
    
    
    
    
    (23,016
    )
    
    
    9,657
    
    
    
    1,287
    
    
    
    
    
    
    
    10,944Total cash and cash equivalents,
beginning of period
    
    
    41,099
    
    
    
    
    
    
    
    4,485
    
    
    
    
    
    
    
    45,584
    
    
    
    15,519
    
    
    
    5,615
    
    
    
    
    
    
    
    21,134Total cash and cash equivalents,
end of period
    
    
    13,714
    
    
    
    1,999
    
    
    
    6,855
    
    
    
    
    
    
    
    22,568
    
    
    
    25,176
    
    
    
    6,902
    
    
    
    
    
    
    
    32,078Less: Cash and cash equivalents,
discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,451
    
    
    
    
    
    
    
    2,451Cash and cash equivalents,
continuing operations
    
    $
    13,714
    
    
    $
    1,999
    
    
    $
    6,855
    
    
    $
    
    
    
    $
    22,568
    
    
    $
    25,176
    
    
    $
    4,451
    
    
    $
    
    
    
    $
    29,627
 16. Subsequent Event
 Sale of Discontinued Operations
 .
  25




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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 of our consolidated financial condition and results of
operations should be read in conjunction with the unaudited condensed consolidated financial
statements contained elsewhere in this quarterly report on Form 10-Q and the Managements
Discussion and Analysis of Financial Condition and Results of Operations and the audited
consolidated financial statements and notes thereto, included in our annual report on Form 10-K for
the year ended December 31, 2009.
 Overview
        26




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##### Table of Contents



Buccaneer Acquisition
   Discontinued Operations
  Nature of Our Contracts
   Three Months Ended
    
    
    Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    October 2,
    
    
    September 26,2010
    
    
    2009
    
    
    2010
    
    
    2009Cost-plus
    
    
    63
    %
    
    
    56
    %
    
    
    67
    %
    
    
    53
    %Fixed-price
    
    
    33
    %
    
    
    40
    %
    
    
    29
    %
    
    
    42
    %Time and materials
    
    
    4
    %
    
    
    4
    %
    
    
    4
    %
    
    
    5
    %100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
   27




---



##### Table of Contents



Contract Backlog
  October 2, 2010
    
    
    December 31, 2009Total
    
    
    Funded
    
    
    Total
    
    
    FundedGovernment Group
    
    $
    1,719.1
    
    
    $
    326.7
    
    
    $
    1,782.6
    
    
    $
    313.4International Group
    
    
    268.7
    
    
    
    181.6
    
    
    
    291.2
    
    
    
    196.8Human Capital Group
    
    
    11.3
    
    
    
    11.3
    
    
    
    7.1
    
    
    
    7.1Discontinued operations
    
    
    50.5
    
    
    
    50.5
    
    
    
    44.9
    
    
    
    44.9$
    2,049.6
    
    
    $
    570.1
    
    
    $
    2,125.8
    
    
    $
    562.2
  Critical Accounting Policies
   Goodwill and Indefinite-Life Intangible Asset
  Tax Valuation Allowance
   28




---



##### Table of Contents



Recent Accounting Pronouncements
  Results of Operations
  Three Months Ended
    
    
    Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    Increase
    
    
    October 2,
    
    
    September 26,
    
    
    Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    2010
    
    
    2009
    
    
    (Decrease)Statements of Operations DataRevenue
    
    $
    176,406
    
    
    $
    143,454
    
    
    $
    32,952
    
    
    $
    585,449
    
    
    $
    411,442
    
    
    $
    174,007Cost of revenue
    
    
    146,678
    
    
    
    121,132
    
    
    
    25,546
    
    
    
    487,363
    
    
    
    344,415
    
    
    
    142,948Gross profit
    
    
    29,728
    
    
    
    22,322
    
    
    
    7,406
    
    
    
    98,086
    
    
    
    67,027
    
    
    
    31,059General and administrative expenses
    
    
    11,208
    
    
    
    10,275
    
    
    
    933
    
    
    
    34,892
    
    
    
    29,513
    
    
    
    5,379Selling and marketing expenses
    
    
    4,762
    
    
    
    4,790
    
    
    
    (28
    )
    
    
    15,884
    
    
    
    13,319
    
    
    
    2,565Operating income
    
    
    13,758
    
    
    
    7,257
    
    
    
    6,501
    
    
    
    47,310
    
    
    
    24,195
    
    
    
    23,115Interest expense, net
    
    
    7,703
    
    
    
    8,502
    
    
    
    (799
    )
    
    
    23,301
    
    
    
    25,386
    
    
    
    (2,085
    )Income (loss) from continuing
operations before income taxes
    
    
    6,055
    
    
    
    (1,245
    )
    
    
    7,300
    
    
    
    24,009
    
    
    
    (1,191
    )
    
    
    25,200Provision for income taxes
    
    
    1,913
    
    
    
    1,629
    
    
    
    284
    
    
    
    5,598
    
    
    
    5,067
    
    
    
    531Income (loss) from continuing operations
    
    
    4,142
    
    
    
    (2,874
    )
    
    
    7,016
    
    
    
    18,411
    
    
    
    (6,258
    )
    
    
    24,669Loss from discontinued
operations, net of tax
    
    
    (171
    )
    
    
    (2,393
    )
    
    
    2,222
    
    
    
    (16,956
    )
    
    
    (4,157
    )
    
    
    (12,799
    )Net income (loss)
    
    
    3,971
    
    
    
    (5,267
    )
    
    
    9,238
    
    
    
    1,455
    
    
    
    (10,415
    )
    
    
    11,870Less: Net
income attributed to noncontrolling interest
    
    
    9
    
    
    
    
    
    
    
    9
    
    
    
    9
    
    
    
    
    
    
    
    9Net income
(loss) attributable to Vangent
    
    $
    3,962
    
    
    $
    (5,267
    )
    
    $
    9,229
    
    
    $
    1,446
    
    
    $
    (10,415
    )
    
    $
    11,861Statements of Operations Data as a Percent of RevenueRevenue
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    
    
    
    
    100.0
    %
    
    
    100.0
    %Cost of revenue
    
    
    83.1
    
    
    
    84.4
    
    
    
    
    
    
    
    83.2
    
    
    
    83.7Gross profit margin
    
    
    16.9
    
    
    
    15.6
    
    
    
    
    
    
    
    16.8
    
    
    
    16.3General and administrative expenses
    
    
    6.4
    
    
    
    7.2
    
    
    
    
    
    
    
    6.0
    
    
    
    7.2Selling and marketing expenses
    
    
    2.7
    
    
    
    3.3
    
    
    
    
    
    
    
    2.7
    
    
    
    3.2Operating income margin
    
    
    7.8
    
    
    
    5.1
    
    
    
    
    
    
    
    8.1
    
    
    
    5.9Interest expense, net
    
    
    4.4
    
    
    
    6.0
    
    
    
    
    
    
    
    4.0
    
    
    
    6.2Income (loss) from continuing
operations before income taxes
    
    
    3.4
    
    
    
    (0.9
    )
    
    
    
    
    
    
    4.1
    
    
    
    (0.3
    )Provision for income taxes
    
    
    1.1
    
    
    
    1.1
    
    
    
    
    
    
    
    1.0
    
    
    
    1.2Income (loss) from continuing operations
    
    
    2.3
    
    
    
    (2.0
    )
    
    
    
    
    
    
    3.1
    
    
    
    (1.5
    )Loss from discontinued
operations, net of tax
    
    
    
    
    
    
    (1.7
    )
    
    
    
    
    
    
    (2.9
    )
    
    
    (1.0
    )Net income (loss)
    
    
    2.3
    
    
    
    (3.7
    )
    
    
    
    
    
    
    0.2
    
    
    
    (2.5
    )Less: Net
income attributed to noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
(loss) attributable to Vangent
    
    
    2.3
    %
    
    
    (3.7
    )%
    
    
    
    
    
    
    0.2
    %
    
    
    2.5
    %
  29




---



##### Table of Contents



Three and Nine Months Ended October 2, 2010 and September 26, 2009
 Overview
  Buccaneer Acquisition
  Revenue
  Three Months Ended
    
    
    Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    Increase (Decrease)
    
    
    October 2,
    
    
    September 26,
    
    
    Increase (Decrease)2010
    
    
    2009
    
    
    Amount
    
    
    Percent
    
    
    2010
    
    
    2009
    
    
    Amount
    
    
    PercentRevenue by business segmentGovernment Group
    
    $
    158,523
    
    
    $
    125,714
    
    
    $
    32,809
    
    
    
    26
    %
    
    $
    534,437
    
    
    $
    359,061
    
    
    $
    175,376
    
    
    
    49
    %International Group
    
    
    12,775
    
    
    
    11,072
    
    
    
    1,703
    
    
    
    15
    %
    
    
    35,748
    
    
    
    31,330
    
    
    
    4,418
    
    
    
    14
    %Human Capital Group
    
    
    5,447
    
    
    
    7,712
    
    
    
    (2,265
    )
    
    
    (29
    )%
    
    
    17,416
    
    
    
    24,569
    
    
    
    (7,153
    )
    
    
    (29
    )%Elimination
    
    
    (339
    )
    
    
    (1,044
    )
    
    
    705
    
    
    
    68
    %
    
    
    (2,152
    )
    
    
    (3,518
    )
    
    
    1,366
    
    
    
    39
    %$
    176,406
    
    
    $
    143,454
    
    
    $
    32,952
    
    
    
    23
    %
    
    $
    585,449
    
    
    $
    411,442
    
    
    $
    174,007
    
    
    
    42
    %Business segment revenue as a percent of total revenueGovernment Group
    
    
    89.9
    %
    
    
    87.6
    %
    
    
    
    
    
    
    
    
    
    
    91.3
    %
    
    
    87.3
    %International Group
    
    
    7.2
    
    
    
    7.7
    
    
    
    
    
    
    
    
    
    
    
    6.1
    
    
    
    7.6Human Capital Group
    
    
    3.1
    
    
    
    5.4
    
    
    
    
    
    
    
    
    
    
    
    3.0
    
    
    
    6.0Elimination
    
    
    (0.2
    )
    
    
    (0.7
    )
    
    
    
    
    
    
    
    
    
    
    (0.4
    )
    
    
    (0.9
    )100.0
    %
    
    
    100.0
    %
    
    
    
    
    
    
    
    
    
    
    100.0
    %
    
    
    100.0
    %
 Government Group Revenue
   
    
    Revenue from DoC contracts increased $33.2 million for the three months and $167.9 million
for the nine months from the processing of census forms and data capture under the U.S. Census
contract that was substantially completed in the third quarter of 2010.
  30




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##### Table of Contents




    
    Revenue from DoED increased $4.3 million for the three months and $9.1 million for the nine
months primarily from contracts with the Office of Federal Student Aid.
 
    
    The Buccaneer Acquisition completed in mid September 2010 contributed revenue of $4.1
million from the date of acquisition for the three and nine month periods.
 
    
    Revenue from HHS contracts, primarily Centers for Medicare and Medicaid Services (CMS),
declined $1.4 million for the three months but increased $2.8 million for the nine months.
 
    
    Revenue from Department of Defense (DoD) contracts increased $1.4 million for the three
months and $2.5 million for the nine months as work on new contracts offset lower revenue on
the traumatic brain injury contract.
  International Group Revenue
  Human Capital Group Revenue
  Cost of Revenue
   General and Administrative Expenses
    31




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##### Table of Contents



Selling and Marketing Expenses
  Operating Income
  Three Months Ended
    
    
    Nine Months EndedIncrease
    
    
    
    
    
    
    
    
    IncreaseOctober
    
    
    September
    
    
    (Decrease)
    
    
    October
    
    
    September
    
    
    (Decrease)2, 2010
    
    
    26, 2009
    
    
    Amount
    
    
    Percent
    
    
    2, 2010
    
    
    26, 2009
    
    
    Amount
    
    
    PercentOperating income (loss) by business segmentGovernment Group
    
    $
    14,080
    
    
    $
    7,989
    
    
    $
    6,091
    
    
    
    76
    %
    
    $
    48,914
    
    
    $
    26,340
    
    
    $
    22,574
    
    
    
    86
    %International Group
    
    
    346
    
    
    
    20
    
    
    
    326
    
    
    
    
    %
    
    
    416
    
    
    
    (90
    )
    
    
    506
    
    
    
    
    %Human Capital Group
    
    
    (660
    )
    
    
    (738
    )
    
    
    78
    
    
    
    11
    %
    
    
    (2,002
    )
    
    
    (2,023
    )
    
    
    21
    
    
    
    1
    %Other
    
    
    (8
    )
    
    
    (14
    )
    
    
    6
    
    
    
    
    %
    
    
    (18
    )
    
    
    (32
    )
    
    
    14
    
    
    
    
    %$
    13,758
    
    
    $
    7,257
    
    
    $
    6,501
    
    
    
    90
    %
    
    $
    47,310
    
    
    $
    24,195
    
    
    $
    23,115
    
    
    
    96
    %Operating margin by business segmentGovernment Group
    
    
    8.9
    %
    
    
    6.4
    %
    
    
    
    
    
    
    
    
    
    
    9.2
    %
    
    
    7.3
    %International Group
    
    
    2.7
    %
    
    
    0.2
    %
    
    
    
    
    
    
    
    
    
    
    1.2
    %
    
    
    (0.3
    )%Human Capital Group
    
    
    (12.1
    )%
    
    
    (9.6
    )%
    
    
    
    
    
    
    
    
    
    
    (11.5
    )%
    
    
    (8.2
    )%
    Interest Expense, Net
   32




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##### Table of Contents



Provision for Income Taxes
  Three Months Ended
    
    
    Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    Increase
    
    
    October 2,
    
    
    September 26,
    
    
    Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    2010
    
    
    2009
    
    
    (Decrease)Provision for income taxes excluding
tax valuation allowance
    
    $
    3,047
    
    
    $
    84
    
    
    $
    2,963
    
    
    $
    8,912
    
    
    $
    1,834
    
    
    $
    7,078Tax valuation allowance
    
    
    (1,134
    )
    
    
    1,545
    
    
    
    (2,679
    )
    
    
    (3,314
    )
    
    
    3,233
    
    
    
    (6,547
    )Total provision for income taxes
    
    $
    1,913
    
    
    $
    1,629
    
    
    $
    284
    
    
    $
    5,598
    
    
    $
    5,067
    
    
    $
    531
  Discontinued Operations
  Three Months Ended
    
    
    Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    Increase
    
    
    October 2,
    
    
    September 26,
    
    
    Increase2010
    
    
    2009
    
    
    (Decrease)
    
    
    2010
    
    
    2009
    
    
    (Decrease)Revenue
    
    $
    7,619
    
    
    $
    5,939
    
    
    $
    1,680
    
    
    $
    21,829
    
    
    $
    16,433
    
    
    $
    5,396Costs and expenses
    
    
    7,050
    
    
    
    8,140
    
    
    
    (1,090
    )
    
    
    21,896
    
    
    
    20,982
    
    
    
    914Expected loss on disposal
    
    
    579
    
    
    
    
    
    
    
    579
    
    
    
    18,474
    
    
    
    
    
    
    
    18,474Other (income) expense, net
    
    
    (198
    )
    
    
    174
    
    
    
    (372
    )
    
    
    (944
    )
    
    
    156
    
    
    
    (1,100
    )Income (loss) from discontinued operations
before income taxes
    
    
    188
    
    
    
    (2,375
    )
    
    
    2,563
    
    
    
    (17,597
    )
    
    
    (4,705
    )
    
    
    (12,892
    )Provision (benefit) for income taxes
    
    
    359
    
    
    
    18
    
    
    
    341
    
    
    
    (641
    )
    
    
    (548
    )
    
    
    (93
    )Loss from discontinued operations,
net of tax
    
    $
    (171
    )
    
    $
    (2,393
    )
    
    $
    2,222
    
    
    $
    (16,956
    )
    
    $
    (4,157
    )
    
    $
    (12,799
    )
    33




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##### Table of Contents



Liquidity and Capital Resources
    Short-Term Borrowing and Long-Term Debt
  Risk Factors
  34




---



##### Table of Contents



Debt Covenants
  Interest Rate Swaps on Variable-Rate Term Loan under Senior Secured Credit Facility
   Working Capital
  Effect onOctober 2,
    
    
    December 31,
    
    
    Working2010
    
    
    2009
    
    
    CapitalCash and cash equivalents
    
    $
    22,568
    
    
    $
    44,638
    
    
    $
    (22,070
    )Trade receivables, net
    
    
    124,858
    
    
    
    109,846
    
    
    
    15,012Prepaid expenses and other
    
    
    13,669
    
    
    
    10,353
    
    
    
    3,316Short-term borrowing and current portion
long-term debt
    
    
    (16,000
    )
    
    
    (13,534
    )
    
    
    (2,466
    )Accounts payable and accrued liabilities
    
    
    (79,348
    )
    
    
    (64,849
    )
    
    
    (14,499
    )Accrued interest payable
    
    
    (3,327
    )
    
    
    (8,186
    )
    
    
    4,859Other liabilities
    
    
    (13,337
    )
    
    
    (9,604
    )
    
    
    (3,733
    )Discontinued operations, net
    
    
    2,570
    
    
    
    7,515
    
    
    
    (4,945
    )Net working capital
    
    $
    51,653
    
    
    $
    76,179
    
    
    $
    (24,526
    )
   35




---



##### Table of Contents



Cash Flows
  Nine Months EndedOctober 2,
    
    
    September 26,
    
    
    Increase2010
    
    
    2009
    
    
    (Decrease)Net cash provided by (used in)Operating activities:Continuing operations
    
    $
    48,922
    
    
    $
    27,371
    
    
    $
    21,553Discontinued operations
    
    
    (1,180
    )
    
    
    (4,335
    )
    
    
    3,153Investing activities:Continuing operations
    
    
    (68,479
    )
    
    
    (8,453
    )
    
    
    (60,026
    )Discontinued operations
    
    
    (2,729
    )
    
    
    (3,470
    )
    
    
    741Financing activities:Continuing operations
    
    
    377
    
    
    
    (264
    )
    
    
    641
 Net Cash Provided by (Used in) Operating Activities
      Net Cash Used in Investing Activities
    36




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##### Table of Contents



Net Cash Provided by (Used in) in Financing Activities
  Contractual Obligations
  Payments Due by Year2010 *andTotal
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    ThereafterDebt:Borrowing under revolving
credit facility
    
    $
    16.0
    
    
    $
    16.0
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Term loan under senior secured
credit facility due
February 2013 (1)
    
    
    216.8
    
    
    
    
    
    
    
    1.7
    
    
    
    215.1
    
    
    
    
    
    
    
    
    
    
    
    Senior subordinated notes due 2015
    
    
    190.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190.0
    
    
    
    Interest relating to debt (2)
    
    
    97.5
    
    
    
    27.3
    
    
    
    23.4
    
    
    
    19.4
    
    
    
    18.3
    
    
    
    9.1
    
    
    
    Operating leases
    
    
    78.6
    
    
    
    26.0
    
    
    
    15.5
    
    
    
    11.9
    
    
    
    6.5
    
    
    
    4.6
    
    
    
    14.1Purchase and other contractual
commitments (3)
    
    
    16.9
    
    
    
    3.9
    
    
    
    11.3
    
    
    
    0.6
    
    
    
    0.7
    
    
    
    0.4
    
    
    
    $
    615.8
    
    
    $
    73.2
    
    
    $
    51.9
    
    
    $
    247.0
    
    
    $
    25.5
    
    
    $
    204.1
    
    
    $
    14.1
 
 *
    
    Remaining three months.(1)
    
    Scheduled payments for the term loan under the senior secured credit facility do not give
effect to possible future mandatory prepayments in March 2011 or 2012 that could result from
excess cash flow from the prior calendar year.(2)
    
    Future interest payments consist of interest on the variable-rate borrowings under the senior
secured credit facility based on the prevailing rates, estimated future payments based on fair
value of the related interest rate swaps, and interest based on the fixed rate of 9 5/8 % for
the senior subordinated notes.(3)
    
    Purchase and other contractual commitments include minimum noncancelable obligations under
service and other agreements, primarily for information technology and telecommunications
services. Off-Balance Sheet Arrangements
   37




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Quantitative and Qualitative Disclosures about Market Risk
 
 ITEM 4T. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
 Risk
Factors Managements Discussion and Analysis,
 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 5. OTHER INFORMATION
   38




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##### Table of Contents



ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description31.1
    *
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    *
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    *
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    *
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith. 
 SIGNATURE
  Vangent, Inc.November 15, 2010
    
    /s/ James C. Reagan

James C. ReaganSenior Vice President and Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
  39




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
  40