##### 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 April 2, 2011
 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
    
    20-1961427(State or other jurisdiction of
    
    (IRS Employerincorporation or organization)
    
    Identification No.)
 4250 North Fairfax Drive
Suite 1200
Arlington, Virginia 22203
(703) 284-5600
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o
 o þ




---



##### 



VANGENT, INC.
Table of Contents
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of April 2, 2011 and
December 31, 2010 (Unaudited)
    
    
    3Condensed Consolidated Statements of Operations for the three
months ended April 2, 2011 and April 3, 2010 (Unaudited)
    
    
    4Condensed Consolidated Statements of Equity and Comprehensive
Income for the three months ended April 2, 2011 and April 3,
2010 (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the three
months ended April 2, 2011 and April 3, 2010 (Unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    31PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    32Item 1A. Risk Factors
    
    
    32Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    32Item 3. Defaults Upon Senior Securities
    
    
    32Item 5. Other Information
    
    
    32Item 6. Exhibits
    
    
    32Signature
    
    
    32Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
  Forward-Looking Statements
 Risk Factors
  2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS
 
 Vangent, Inc.Condensed Consolidated Balance Sheets

(Unaudited)
 April 2,
    
    
    December 31,2011
    
    
    2010AssetsCurrent assets:Cash and cash equivalents
    
    $
    46,438
    
    
    $
    27,194Trade receivables, net
    
    
    110,010
    
    
    
    122,940Prepaid expenses and other assets
    
    
    13,467
    
    
    
    12,572Assets of discontinued operations
    
    
    
    
    
    
    329Total current assets
    
    
    169,915
    
    
    
    163,035Property and equipment, net
    
    
    26,581
    
    
    
    28,031Intangible assets, net
    
    
    144,325
    
    
    
    150,847Goodwill
    
    
    297,416
    
    
    
    297,076Deferred tax asset
    
    
    19,977
    
    
    
    21,923Deferred debt financing costs
    
    
    8,113
    
    
    
    8,823Total assets
    
    $
    666,327
    
    
    $
    669,735Liabilities EquityCurrent liabilities:Current portion of long-term debt
    
    $
    
    
    
    $
    1,401Accounts payable and accrued liabilities
    
    
    76,761
    
    
    
    80,672Accrued interest payable
    
    
    2,803
    
    
    
    7,781Deferred revenue
    
    
    10,389
    
    
    
    7,964Liabilities of discontinued operations
    
    
    
    
    
    
    1,880Total current liabilities
    
    
    89,953
    
    
    
    99,698Long-term debt, net of current portion
    
    
    405,353
    
    
    
    405,353Other long-term liabilities
    
    
    4,961
    
    
    
    5,453Deferred tax liability
    
    
    1,901
    
    
    
    1,860Total liabilities
    
    
    502,168
    
    
    
    512,364Commitments and contingencies (Note 10)Equity:Common stock, $0.01 par value,
1,000 shares authorized,
100 shares issued and outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    208,473
    
    
    
    208,272Accumulated other comprehensive loss
    
    
    (4,467
    )
    
    
    (8,917
    )Accumulated deficit
    
    
    (40,390
    )
    
    
    (42,535
    )Total Vangent stockholders equity
    
    
    163,616
    
    
    
    156,820Noncontrolling interest
    
    
    543
    
    
    
    551Total equity
    
    
    164,159
    
    
    
    157,371Total liabilities and equity
    
    $
    666,327
    
    
    $
    669,735
   3




---



##### Table of Contents



Vangent, Inc.
 
 Condensed Consolidated Statements of Operations

(Unaudited)
 Three Months EndedApril 2,
    
    
    April 3,2011
    
    
    2010Revenue
    
    $
    175,849
    
    
    $
    194,197Cost of revenue
    
    
    145,192
    
    
    
    158,226Gross profit
    
    
    30,657
    
    
    
    35,971General and administrative expenses
    
    
    12,149
    
    
    
    12,190Selling and marketing expenses
    
    
    5,138
    
    
    
    5,675Operating income
    
    
    13,370
    
    
    
    18,106Interest expense, net
    
    
    7,491
    
    
    
    8,236Income from continuing operations before income taxes
    
    
    5,879
    
    
    
    9,870Provision for income taxes
    
    
    3,730
    
    
    
    1,834Income from continuing operations
    
    
    2,149
    
    
    
    8,036Loss from discontinued operations, net of tax
    
    
    (12
    )
    
    
    (2,437
    )Net income
    
    
    2,137
    
    
    
    5,599Net loss attributed to noncontrolling interest
    
    
    (8
    )
    
    
    Net income attributable to Vangent
    
    $
    2,145
    
    
    $
    5,599
   4




---



##### Table of Contents



Vangent, Inc.
 
 Condensed Consolidated Statements of Equity and Comprehensive Income

(Unaudited)
  Accum-ulated
    
    
    
    
    
    
    TotalOther
    
    
    
    
    
    
    VangentAdditional
    
    
    Compre-
    
    
    Accum-
    
    
    Stock-
    
    
    Non-Common
    
    
    Paid-in
    
    
    hensive
    
    
    ulated
    
    
    holders
    
    
    controlling
    
    
    TotalStock
    
    
    Capital
    
    
    Loss
    
    
    Deficit
    
    
    Equity
    
    
    Interest
    
    
    EquityBalance, December 31, 2009
    
    $
    
    
    
    $
    207,376
    
    
    $
    (14,949
    )
    
    $
    (82,564
    )
    
    
    109,863
    
    
    $
    
    
    
    $
    109,863Effect of hedging activities, net of tax
    
    
    
    
    
    
    
    
    
    
    1,331
    
    
    
    
    
    
    
    1,331
    
    
    
    
    
    
    
    1,331Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    (59
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,599
    
    
    
    5,599
    
    
    
    
    
    
    
    5,599Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,871
    
    
    
    
    
    
    
    6,871Equity-based compensation
    
    
    
    
    
    
    262
    
    
    
    
    
    
    
    
    
    
    
    262
    
    
    
    
    
    
    
    262Balance, April 3, 2010
    
    $
    
    
    
    $
    207,638
    
    
    $
    (13,677
    )
    
    $
    (76,965
    )
    
    $
    116,996
    
    
    $
    
    
    
    $
    116,996Balance, December 31, 2010
    
    $
    
    
    
    $
    208,272
    
    
    $
    (8,917
    )
    
    $
    (42,535
    )
    
    
    156,820
    
    
    $
    551
    
    
    $
    157,371Effect of hedging activities, net of tax
    
    
    
    
    
    
    
    
    
    
    2,005
    
    
    
    
    
    
    
    2,005
    
    
    
    
    
    
    
    2,005Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    2,262
    
    
    
    
    
    
    
    2,262
    
    
    
    
    
    
    
    2,262Defined benefit plan overfunding
    
    
    
    
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    183Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,145
    
    
    
    2,145
    
    
    
    (8
    )
    
    
    2,137Total comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,595
    
    
    
    (8
    )
    
    
    6,587Equity-based compensation
    
    
    
    
    
    
    201
    
    
    
    
    
    
    
    
    
    
    
    201
    
    
    
    
    
    
    
    201Balance, April 2, 2011
    
    $
    
    
    
    $
    208,473
    
    
    $
    (4,467
    )
    
    $
    (40,390
    )
    
    $
    163,616
    
    
    $
    543
    
    
    $
    164,159
   5




---



##### Table of Contents



Vangent, Inc.
 
 Condensed Consolidated Statements of Cash Flows

(Unaudited)
  Three Months      EndedApril 2,
    
    
    April 3,2011
    
    
    2010Cash flows from operating activitiesNet income
    
    $
    2,137
    
    
    $
    5,599Loss from discontinued operations, net of tax
    
    
    (12
    )
    
    
    (2,437
    )Income from continuing operations
    
    
    2,149
    
    
    
    8,036Adjustments to reconcile income from continuing operations to net cash
provided by (used in) operating activities:Amortization of intangible assets
    
    
    6,763
    
    
    
    5,272Depreciation and amortization of property and equipment
    
    
    3,079
    
    
    
    3,085Amortization of deferred debt financing costs
    
    
    714
    
    
    
    563Equity-based compensation expense
    
    
    201
    
    
    
    262Deferred income taxes
    
    
    3,344
    
    
    
    1,656Changes in operating assets and liabilities:Trade receivables
    
    
    13,317
    
    
    
    (32,066
    )Prepaid expenses and other assets
    
    
    (62
    )
    
    
    (3,538
    )Accounts payable and other liabilities
    
    
    (9,993
    )
    
    
    (1,635
    )Deferred revenue
    
    
    2,425
    
    
    
    1,352Continuing operations, net
    
    
    21,937
    
    
    
    (17,013
    )Discontinued operations, net
    
    
    (87
    )
    
    
    (1,994
    )Net cash provided by (used in) operating activities
    
    
    21,850
    
    
    
    (19,007
    )Cash flows from investing activitiesCapital expenditures
    
    
    (1,896
    )
    
    
    (1,304
    )Continuing operations, net
    
    
    (1,896
    )
    
    
    (1,304
    )Discontinued operations, net
    
    
    118
    
    
    
    (123
    )Net cash used in investing activities
    
    
    (1,778
    )
    
    
    (1,427
    )Cash flows from financing activitiesBorrowing under revolving credit facility
    
    
    10,000
    
    
    
    Repayment of borrowing under revolving credit facility
    
    
    (10,000
    )
    
    
    Repayment of senior secured term loan
    
    
    (1,401
    )
    
    
    (13,612
    )Other
    
    
    
    
    
    
    (29
    )Net cash used in financing activities
    
    
    (1,401
    )
    
    
    (13,641
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    252
    
    
    
    (146
    )Net increase (decrease) in cash and cash equivalents
    
    
    18,923
    
    
    
    (34,221
    )Total cash and cash equivalents, beginning of period
    
    
    27,515
    
    
    
    45,584Total cash and cash equivalents, end of period
    
    
    46,438
    
    
    
    11,363Less: Cash and cash equivalents, discontinued operations
    
    
    
    
    
    
    645Cash and cash equivalents, continuing operations
    
    $
    46,438
    
    
    $
    10,718Supplemental cash flow informationInterest paid
    
    $
    11,635
    
    
    $
    12,709Income taxes paid
    
    
    257
    
    
    
    54
   6




---



##### Table of Contents



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




---



##### Table of Contents



2. Acquisition of Buccaneer Computer Systems & Service, Inc.
    Purchase ConsiderationCash paid
    
    $
    61,050Other purchase consideration
    
    
    3,585$
    64,635
  Allocation of Purchase ConsiderationCash
    
    $
    897Accounts receivable
    
    
    18,224Property and equipment
    
    
    2,055Definite-life intangible assets
    
    
    25,792Goodwill
    
    
    30,457Other assets
    
    
    2,009Less: Liabilities assumed
    
    
    (14,072
    )Net assets acquired
    
    
    65,362Less: Noncontrolling interest
    
    
    (727
    )$
    64,635Allocation of Definite-Life Intangible Assets AcquiredCustomer relationships (eight-year life)
    
    $
    23,809Non-compete agreements (three-year life)
    
    
    1,983$
    25,792
    8




---



##### Table of Contents



Unaudited Pro Forma Information
  Revenue
    
    $
    216,788Income from continuing operations
    
    $
    9,025
  3. Discontinued Operations
  Three Months EndedApril 2,
    
    
    April 3,2011
    
    
    2010Statements of Operations DataRevenue
    
    $
    137
    
    
    $
    7,135Costs and expenses
    
    
    144
    
    
    
    7,500Expected loss on sale or disposal
    
    
    
    
    
    
    2,618Other (income) expense, net
    
    
    5
    
    
    
    (753
    )Loss from discontinued operations before income taxes
    
    
    (12
    )
    
    
    (2,230
    )Provision for income taxes
    
    
    
    
    
    
    207Loss from discontinued operations, net of tax
    
    $
    (12
    )
    
    $
    (2,437
    )
 4. Recent Accounting Pronouncements
 Multiple-Deliverable Revenue Arrangements,
  9




---



##### Table of Contents



Certain Revenue Arrangements that Include Software
Elements
 Improving Disclosures about Fair Value Measurements,
 Revenue Recognition  Milestone Method
 , Disclosure of Supplementary Pro Forma Information
for Business Combinations , When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or
Negative Carrying Amounts .
 5. Trade Receivables
 A summary of trade receivables follows:
 April 2,
    
    
    December 31,2011
    
    
    2010Billed trade receivables
    
    $
    68,699
    
    
    $
    91,126Billable trade receivables
    
    
    31,303
    
    
    
    22,391Unbilled trade receivables pending completion of milestones, contract authorizations, or retainage
    
    
    9,390
    
    
    
    8,794Other
    
    
    763
    
    
    
    806110,155
    
    
    
    123,117Allowance for doubtful accounts
    
    
    (145
    )
    
    
    (177
    )Trade receivables, net
    
    $
    110,010
    
    
    $
    122,940Trade accounts receivable from major customersDepartment of Health and Human Services
    
    
    49
    %
    
    
    46
    %Department of Education
    
    
    15
    %
    
    
    17
    %Department of Defense
    
    
    *
    
    
    
    11
    %
 
 *
    
    Less than 10%  10




---



##### Table of Contents



6. Long-Term Debt
 A summary of long-term debt follows:
 April 2,
    
    
    December 31,2011
    
    
    2010Long-term debtTerm loan under senior secured credit facility with interest at variable
rates (2.32% at April 2, 2011), maturing February 15, 2013
    
    $
    215,353
    
    
    $
    216,7549 5/8% Senior subordinated fixed rate notes, due February 15, 2015
    
    
    190,000
    
    
    
    190,000405,353
    
    
    
    406,754Less: current portion of long-term debt
    
    
    
    
    
    
    1,401Long-term debt, net of current portion
    
    $
    405,353
    
    
    $
    405,353Scheduled maturities of long-term debt2011
    
    $
    2012
    
    
    3102013
    
    
    215,0432014
    
    
    2015
    
    
    190,000$
    405,353
 Senior Secured Credit Facility
      11




---



##### Table of Contents



9 5/8% Senior Subordinated Notes
   7. Accumulated Other Comprehensive Loss
  April 2,
    
    
    December 31,2011
    
    
    2010Accumulated other comprehensive lossEffect of hedging activities, net of tax:Interest rate swap agreements, net of tax
    
    $
    
    
    
    $
    (391
    )Additional deferred tax effect relating to interest rate swap agreement
    
    
    
    
    
    
    (1,614
    )Continuing operations, net of tax
    
    
    
    
    
    
    (2,005
    )Foreign currency cumulative translation adjustments:Continuing operations
    
    
    (4,650
    )
    
    
    (5,359
    )Discontinued operations
    
    
    
    
    
    
    (1,729
    )(4,650
    )
    
    
    (7,088
    )Defined benefit plan overfunding, net of tax
    
    
    183
    
    
    
    176Total accumulated other comprehensive loss
    
    $
    (4,467
    )
    
    $
    (8,917
    )
 HedgingActivitiesInterest RateSwapSummary of changes in accumulated other comprehensive lossBalance, December 31, 2010
    
    $
    (2,005
    )Reclassification of loss to interest expense
    
    
    646Reclassification tax effect to provision for income taxes
    
    
    (255
    )Reclassification of additional deferred tax effect to provision for income taxes
    
    
    1,614Balance, April 2, 2011
    
    $
    
 8. Derivative Instruments, Hedging Activities and Financial Instruments
   12




---



##### Table of Contents



Derivative Instruments and Hedging Activities
  Balance Sheet DataFair Value ofLiability DerivativesApril 2,
    
    
    December 31,Derivative  Contracts
    
    Balance Sheet Location
    
    2011
    
    
    2010Derivatives that qualify as
cash flow hedgesInterest rate swap agreements
    
    Accrued liabilities
    
    $
    
    
    
    $
    646
 Statements of Operations DataAmount of Gain(Loss) RecognizedAmount of Gain
    
    
    Location of Gain
    
    Amount of Gain
    
    
    Location of Gain
    
    in Income on(Loss)
    
    
    (Loss)
    
    (Loss)
    
    
    (Loss) Recognized in
    
    DerivativeRecognized in
    
    
    Reclassified from
    
    Reclassified from
    
    
    Income on Derivative
    
    (IneffectiveOCI on
    
    
    Accumulated OCI
    
    Accumulated OCI
    
    
    (Ineffective Portion
    
    Portion andDerivative
    
    
    into Income
    
    into Income
    
    
    and Amount
    
    Amount Excluded(Effective
    
    
    (Effective
    
    (Effective
    
    
    Excluded from
    
    from EffectivenessDerivative Contracts
    
    Portion)
    
    
    Portion)
    
    Portion)
    
    
    Effectiveness Testing)
    
    Testing)Three Months Ended April 2, 2011Derivatives that qualify as cash flow hedgesInterest rate swap agreements
    
    
    
    
    
    Interest expense
    
    $
    (646
    )Tax effect of interest rate swap agreements
    
    
    
    
    
    Provision for income taxes
    
    
    255Additional deferred tax effect relating to interest rate swap agreements
    
    
    
    
    
    Provision for income taxes
    
    
    (1,614
    )Three Months Ended April 3, 2010Derivatives that qualify as cash flow hedgesInterest rate swap agreements
    
    $
    (631
    )
    
    Interest expense
    
    
    (1,666
    )
    
    Interest expense
    
    $
    23Foreign currency forward contracts
    
    
    (8
    )
    
    Discontinued operations
    
    
    (304
    )Derivatives that do not qualify as cash flow hedgesForeign currency forward contracts
    
    
    
    
    
    
    
    
    
    
    
    Discontinued operations
    
    
    (89
    )
 Fair Value of Financial Instruments
  CarryingAmounts
    
    
    Fair ValueLong-term debtVariable-rate term loan under the senior secured credit facility
    
    $
    215,353
    
    
    $
    215,3539 5/8% senior subordinated notes, due February 15, 2015
    
    
    190,000
    
    
    
    189,525$
    405,353
    
    
    $
    404,878
  13




---



##### Table of Contents



9. Income Taxes
    , Income Taxes
  10. Commitments and Contingencies
  11. Equity-Based Compensation
   14




---



##### Table of Contents



Class B and B-1 Membership InterestsAvailable for
    
    
    
    
    
    
    Fair Value atGrant
    
    
    Outstanding
    
    
    Date of GrantBalance, December 31, 2010
    
    
    1.6
    %
    
    
    5.9
    %
    
    $
    5,987Granted
    
    
    (0.9
    )
    
    
    0.9
    
    
    
    850Forfeited and redeemed
    
    
    0.6
    
    
    
    (0.6
    )
    
    
    (289
    )Balance, April 2, 2011
    
    
    1.3
    %
    
    
    6.2
    %
    
    $
    6,548At April 2, 2011:Vested
    
    
    
    
    
    
    3.3
    %Not yet vested
    
    
    
    
    
    
    2.96.2
    %
  Years Ending December 312011 (remaining nine months)
    
    $
    8092012
    
    
    5452013
    
    
    4372014
    
    
    3212015
    
    
    2572016
    
    
    29$
    2,398
 12. Related Party Transactions
      15




---



##### Table of Contents



13. Business Segments and Major Customers
      16




---



##### Table of Contents



Three Months EndedApril 2,
    
    
    April 3,2011
    
    
    2010Revenue by business segmentGovernment Group
    
    $
    152,048
    
    
    $
    177,237International Group
    
    
    19,009
    
    
    
    11,825Human Capital Group
    
    
    4,922
    
    
    
    6,135Elimination
    
    
    (130
    )
    
    
    (1,000
    )Total revenue
    
    $
    175,849
    
    
    $
    194,197Operating income (loss) by business segmentGovernment Group
    
    $
    13,213
    
    
    $
    18,869International Group
    
    
    935
    
    
    
    62Human Capital Group
    
    
    (750
    )
    
    
    (820
    )Other
    
    
    (28
    )
    
    
    (5
    )Total operating income
    
    
    13,370
    
    
    
    18,106Interest expense, net
    
    
    7,491
    
    
    
    8,236Income from continuing operations
before income taxes
    
    $
    5,879
    
    
    $
    9,870Depreciation and amortizationGovernment Group
    
    $
    8,674
    
    
    $
    7,305International Group
    
    
    976
    
    
    
    727Human Capital Group
    
    
    192
    
    
    
    325Total depreciation and amortization
    
    $
    9,842
    
    
    $
    8,357Revenue from major customers as a
percent of total revenueDepartment of Health and Human Services
    
    
    50
    %
    
    
    34
    %Department of Education
    
    
    17
    %
    
    
    15
    %Department of Commerce
    
    
    *
    
    
    
    26
    %
 
 *
    
    Less than 10%.  17




---



##### Table of Contents



14. Condensed Issuer, Guarantor and Non-Guarantor Financial Information
  Condensed Combining Balance Sheets (Unaudited)
 Guarantor
    
    
    Non-GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedApril 2, 2011Current assets:Cash and cash equivalents
    
    $
    29,660
    
    
    $
    22
    
    
    $
    16,756
    
    
    $
    
    
    
    $
    46,438Trade receivables, net
    
    
    77,084
    
    
    
    23,748
    
    
    
    9,178
    
    
    
    
    
    
    
    110,010Prepaid expenses and other
    
    
    9,286
    
    
    
    1,141
    
    
    
    3,040
    
    
    
    
    
    
    
    13,467Total current assets
    
    
    116,030
    
    
    
    24,911
    
    
    
    28,974
    
    
    
    
    
    
    
    169,915Property and equipment, net
    
    
    19,190
    
    
    
    2,790
    
    
    
    4,601
    
    
    
    
    
    
    
    26,581Goodwill and intangible assets
    
    
    372,564
    
    
    
    50,733
    
    
    
    18,444
    
    
    
    
    
    
    
    441,741Deferred tax asset (liability)
    
    
    20,659
    
    
    
    (682
    )
    
    
    
    
    
    
    
    
    
    
    19,977Deferred debt financing costs
    
    
    6,971
    
    
    
    867
    
    
    
    275
    
    
    
    
    
    
    
    8,113Investment in and advances to
subsidiaries
    
    
    99,868
    
    
    
    
    
    
    
    
    
    
    
    (99,868
    )
    
    
    Total assets
    
    $
    635,282
    
    
    $
    78,619
    
    
    $
    52,294
    
    
    $
    (99,868
    )
    
    $
    666,327Current liabilities
    
    $
    61,565
    
    
    $
    10,094
    
    
    $
    21,510
    
    
    $
    (3,216
    )
    
    $
    89,953Long-term debt
    
    
    405,353
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    405,353Other long-term liabilities
    
    
    4,205
    
    
    
    711
    
    
    
    1,946
    
    
    
    
    
    
    
    6,862Total liabilities
    
    
    471,123
    
    
    
    10,805
    
    
    
    23,456
    
    
    
    (3,216
    )
    
    
    502,168Total equity
    
    
    164,159
    
    
    
    67,814
    
    
    
    28,838
    
    
    
    (96,652
    )
    
    
    164,159Total liabilities and equity
    
    $
    635,282
    
    
    $
    78,619
    
    
    $
    52,294
    
    
    $
    (99,868
    )
    
    $
    666,327December 31, 2010Current assets:Cash and cash equivalents
    
    $
    20,477
    
    
    $
    
    
    
    $
    6,717
    
    
    $
    
    
    
    $
    27,194Trade receivables, net
    
    
    90,879
    
    
    
    20,504
    
    
    
    11,557
    
    
    
    
    
    
    
    122,940Prepaid expenses and other
    
    
    9,140
    
    
    
    1,227
    
    
    
    2,534
    
    
    
    
    
    
    
    12,901Total current assets
    
    
    120,496
    
    
    
    21,731
    
    
    
    20,808
    
    
    
    
    
    
    
    163,035Property and equipment, net
    
    
    20,640
    
    
    
    2,393
    
    
    
    4,998
    
    
    
    
    
    
    
    28,031Goodwill and intangible assets, net
    
    
    377,721
    
    
    
    52,075
    
    
    
    18,127
    
    
    
    
    
    
    
    447,923Deferred tax asset
    
    
    21,923
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,923Deferred debt financing costs and
other
    
    
    8,089
    
    
    
    471
    
    
    
    263
    
    
    
    
    
    
    
    8,823Investment in and advances to
subsidiaries
    
    
    94,738
    
    
    
    
    
    
    
    
    
    
    
    (94,738
    )
    
    
    Total assets
    
    $
    643,607
    
    
    $
    76,670
    
    
    $
    44,196
    
    
    $
    (94,738
    )
    
    $
    669,735Current liabilities
    
    $
    76,188
    
    
    $
    12,572
    
    
    $
    16,039
    
    
    $
    (5,101
    )
    
    $
    99,698Long-term debt, net of current portion
    
    
    405,353
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    405,353Other long-term liabilities
    
    
    4,695
    
    
    
    711
    
    
    
    1,907
    
    
    
    
    
    
    
    7,313Total liabilities
    
    
    486,236
    
    
    
    13,283
    
    
    
    17,946
    
    
    
    (5,101
    )
    
    
    512,364Total equity
    
    
    157,371
    
    
    
    63,387
    
    
    
    26,250
    
    
    
    (89,637
    )
    
    
    157,371Total liabilities and equity
    
    $
    643,607
    
    
    $
    76,670
    
    
    $
    44,196
    
    
    $
    (94,738
    )
    
    $
    669,735
  18




---



##### Table of Contents



Condensed Combining Statements of Operations (Unaudited)
 Guarantor
    
    
    Non-GuarantorIssuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedThree Months Ended April 2, 2011Revenue
    
    $
    124,946
    
    
    $
    29,680
    
    
    $
    21,336
    
    
    $
    (113
    )
    
    $
    175,849Cost of revenue
    
    
    101,025
    
    
    
    26,616
    
    
    
    17,664
    
    
    
    (113
    )
    
    
    145,192Gross profit
    
    
    23,921
    
    
    
    3,064
    
    
    
    3,672
    
    
    
    
    
    
    
    30,657General and administrative expenses
    
    
    8,854
    
    
    
    1,437
    
    
    
    1,858
    
    
    
    
    
    
    
    12,149Selling and marketing expenses
    
    
    4,039
    
    
    
    467
    
    
    
    632
    
    
    
    
    
    
    
    5,138Operating income
    
    
    11,028
    
    
    
    1,160
    
    
    
    1,182
    
    
    
    
    
    
    
    13,370Interest expense, net
    
    
    7,437
    
    
    
    
    
    
    
    54
    
    
    
    
    
    
    
    7,491Equity in net income of subsidiaries
    
    
    1,579
    
    
    
    
    
    
    
    
    
    
    
    (1,579
    )
    
    
    Income from continuing operations
before
income taxes
    
    
    5,170
    
    
    
    1,160
    
    
    
    1,128
    
    
    
    (1,579
    )
    
    
    5,879Provision for income taxes
    
    
    3,033
    
    
    
    465
    
    
    
    232
    
    
    
    
    
    
    
    3,730Income from continuing operations
    
    
    2,137
    
    
    
    695
    
    
    
    896
    
    
    
    (1,579
    )
    
    
    2,149Loss from discontinued operations,
net of tax
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    (12
    )Net income
    
    
    2,137
    
    
    
    695
    
    
    
    884
    
    
    
    (1,579
    )
    
    
    2,137Net loss attributable to
noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (8
    )Net income attributable to Vangent
    
    $
    2,137
    
    
    $
    695
    
    
    $
    892
    
    
    $
    (1,579
    )
    
    $
    2,145
 Three Months Ended April 3, 2010Revenue
    
    $
    182,423
    
    
    $
    
    
    
    $
    11,774
    
    
    $
    
    
    
    $
    194,197Cost of revenue
    
    
    148,150
    
    
    
    
    
    
    
    10,076
    
    
    
    
    
    
    
    158,226Gross profit
    
    
    34,273
    
    
    
    
    
    
    
    1,698
    
    
    
    
    
    
    
    35,971General and administrative expenses
    
    
    11,588
    
    
    
    
    
    
    
    602
    
    
    
    
    
    
    
    12,190Selling and marketing expenses
    
    
    5,131
    
    
    
    
    
    
    
    544
    
    
    
    
    
    
    
    5,675Operating income
    
    
    17,554
    
    
    
    
    
    
    
    552
    
    
    
    
    
    
    
    18,106Interest expense, net
    
    
    8,285
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    8,236Equity in net (loss) of subsidiaries
    
    
    (1,676
    )
    
    
    
    
    
    
    
    
    
    
    1,676
    
    
    
    Income from continuing operations
before income taxes
    
    
    7,593
    
    
    
    
    
    
    
    601
    
    
    
    1,676
    
    
    
    9,870Provision for income taxes
    
    
    1,715
    
    
    
    
    
    
    
    119
    
    
    
    
    
    
    
    1,834Income from continuing operations
    
    
    5,878
    
    
    
    
    
    
    
    482
    
    
    
    1,676
    
    
    
    8,036Loss from discontinued operations,
net of tax
    
    
    (279
    )
    
    
    
    
    
    
    (2,158
    )
    
    
    
    
    
    
    (2,437
    )Net income (loss)
    
    $
    5,599
    
    
    $
    
    
    
    $
    (1,676
    )
    
    $
    1,676
    
    
    $
    5,599
  19




---



##### Table of Contents



Condensed Combining Statements of Cash Flows (Unaudited)
 Guarantor
    
    
    Non-Guarantor
    
    
    Elim-Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    inations
    
    
    ConsolidatedThree Months Ended April 2, 2011Cash flows from operating activitiesContinuing operations, net
    
    $
    8,140
    
    
    $
    874
    
    
    $
    12,923
    
    
    $
    
    
    
    
    21,937Discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    (87
    )
    
    
    
    
    
    
    (87
    )Net cash provided by operating activities
    
    
    8,140
    
    
    
    874
    
    
    
    12,836
    
    
    
    
    
    
    
    21,850Cash flows from investing activitiesIntercompany loan from Vangent Ltd. to Vangent, Inc.
    
    
    3,216
    
    
    
    
    
    
    
    
    
    
    
    (3,216
    )
    
    
    Capital expenditures
    
    
    (772
    )
    
    
    (852
    )
    
    
    (272
    )
    
    
    
    
    
    
    (1,896
    )Continuing operations, net
    
    
    2,444
    
    
    
    (852
    )
    
    
    (272
    )
    
    
    (3,216
    )
    
    
    (1,896
    )Discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    118
    
    
    
    
    
    
    
    118Net cash provided by (used in) investing
activities
    
    
    2,444
    
    
    
    (852
    )
    
    
    (154
    )
    
    
    (3,216
    )
    
    
    (1,778
    )Cash flows from financing activitiesIntercompany loan from Vangent Ltd. to Vangent, Inc.
    
    
    
    
    
    
    
    
    
    
    (3,216
    )
    
    
    3,216
    
    
    
    Repayment of senior secured loan
    
    
    (1,401
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,401
    )Net cash provided by (used in) financing activities
    
    
    (1,401
    )
    
    
    
    
    
    
    (3,216
    )
    
    
    3,216
    
    
    
    (1,401
    )Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    252
    
    
    
    
    
    
    
    252Net increase in cash and cash equivalents
    
    
    9,183
    
    
    
    22
    
    
    
    9,718
    
    
    
    
    
    
    
    18,923Total cash and cash equivalents, beginning of period
    
    
    20,477
    
    
    
    
    
    
    
    7,038
    
    
    
    
    
    
    
    27,515Total cash and cash equivalents, end of period
    
    $
    29,660
    
    
    $
    22
    
    
    $
    16,756
    
    
    $
    
    
    
    $
    46,438Three Months Ended April 3, 2010Cash flows from operating activitiesContinuing operations, net
    
    $
    (18,109
    )
    
    $
    
    
    
    $
    1,096
    
    
    $
    
    
    
    $
    (17,013
    )Discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    (1,994
    )
    
    
    
    
    
    
    (1,994
    )Net cash used in operating activities
    
    
    (18,109
    )
    
    
    
    
    
    
    (898
    )
    
    
    
    
    
    
    (19,007
    )Cash flows from investing activitiesLoans to Non-Guarantor Subsidiary, net
    
    
    (605
    )
    
    
    
    
    
    
    
    
    
    
    605
    
    
    
    Capital expenditures
    
    
    (1,163
    )
    
    
    
    
    
    
    (141
    )
    
    
    
    
    
    
    (1,304
    )Continuing operations, net
    
    
    (1,768
    )
    
    
    
    
    
    
    (141
    )
    
    
    605
    
    
    
    (1,304
    )Discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    (123
    )
    
    
    
    
    
    
    (123
    )Net cash used in investing activities
    
    
    (1,768
    )
    
    
    
    
    
    
    (264
    )
    
    
    605
    
    
    
    (1,427
    )Cash flows from financing activitiesRepayment of senior secured loan
    
    
    (13,612
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,612
    )Other
    
    
    (29
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (29
    )Continuing operations, net
    
    
    (13,641
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,641
    )Discontinued operations, net
    
    
    
    
    
    
    
    
    
    
    605
    
    
    
    (605
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (13,641
    )
    
    
    
    
    
    
    605
    
    
    
    (605
    )
    
    
    (13,641
    )Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    
    
    
    
    (146
    )
    
    
    
    
    
    
    (146
    )Net decrease in cash and cash equivalents
    
    
    (33,518
    )
    
    
    
    
    
    
    (703
    )
    
    
    
    
    
    
    (34,221
    )Total cash and cash equivalents, beginning of period
    
    
    41,099
    
    
    
    
    
    
    
    4,485
    
    
    
    
    
    
    
    45,584Total cash and cash equivalents, end of period
    
    
    7,581
    
    
    
    
    
    
    
    3,782
    
    
    
    
    
    
    
    11,363Less: Cash and cash equivalents, discontinued operations
    
    
    
    
    
    
    
    
    
    
    645
    
    
    
    
    
    
    
    645Cash and cash equivalents, continuing operations
    
    $
    7,581
    
    
    $
    
    
    
    $
    3,137
    
    
    $
    
    
    
    $
    10,718
  20




---



##### 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 and cash flows 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, 2010.
 Overview
      Buccaneer Acquisition in September 2010
  Discontinued Operations
   21




---



##### Table of Contents



Nature of Our Contracts
   Three Months EndedApril 2,
    
    
    April 3,2011
    
    
    2010Cost-plus
    
    
    57
    %
    
    
    65
    %Fixed-price
    
    
    36
    %
    
    
    30
    %Time and materials
    
    
    7
    %
    
    
    5
    %100
    %
    
    
    100
    %
  Contract Backlog
  April 2, 2011
    
    
    December 31, 2010Total
    
    
    Funded
    
    
    Total
    
    
    FundedGovernment Group
    
    $
    1,480.5
    
    
    $
    219.5
    
    
    $
    1,629.2
    
    
    $
    241.3International Group
    
    
    247.0
    
    
    
    150.6
    
    
    
    251.9
    
    
    
    161.8Human Capital Group
    
    
    107.1
    
    
    
    58.5
    
    
    
    13.2
    
    
    
    13.2$
    1,834.6
    
    
    $
    428.6
    
    
    $
    1,894.3
    
    
    $
    416.3
   22




---



##### Table of Contents



Critical Accounting Policies
    23




---



##### Table of Contents



Results of Operations
  Three Months EndedApril 2,
    
    
    April 3,
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)Statements of Operations DataRevenue
    
    $
    175,849
    
    
    $
    194,197
    
    
    $
    (18,348
    )Cost of revenue
    
    
    145,192
    
    
    
    158,226
    
    
    
    (13,034
    )Gross profit
    
    
    30,657
    
    
    
    35,971
    
    
    
    (5,314
    )General and administrative expenses
    
    
    12,149
    
    
    
    12,190
    
    
    
    (41
    )Selling and marketing expenses
    
    
    5,138
    
    
    
    5,675
    
    
    
    (537
    )Operating income
    
    
    13,370
    
    
    
    18,106
    
    
    
    (4,736
    )Interest expense, net
    
    
    7,491
    
    
    
    8,236
    
    
    
    (745
    )Income from continuing operations before income taxes
    
    
    5,879
    
    
    
    9,870
    
    
    
    (3,991
    )Provision for income taxes
    
    
    3,730
    
    
    
    1,834
    
    
    
    1,896Income from continuing operations
    
    
    2,149
    
    
    
    8,036
    
    
    
    (5,887
    )Loss from discontinued operations, net of tax
    
    
    (12
    )
    
    
    (2,437
    )
    
    
    2,425Net income
    
    
    2,137
    
    
    
    5,599
    
    
    
    (3,462
    )Net loss attributed to noncontrolling interest
    
    
    (8
    )
    
    
    
    
    
    
    (8
    )Net income attributable to Vangent
    
    $
    2,145
    
    
    $
    5,599
    
    
    $
    (3,454
    )Statements of Operations Data as a Percent of RevenueRevenue
    
    
    100.0
    %
    
    
    100.0
    %Cost of revenue
    
    
    82.6
    
    
    
    81.5Gross profit margin
    
    
    17.4
    
    
    
    18.5General and administrative expenses
    
    
    6.9
    
    
    
    6.3Selling and marketing expenses
    
    
    2.9
    
    
    
    2.9Operating income margin
    
    
    7.6
    
    
    
    9.3Interest expense, net
    
    
    4.3
    
    
    
    4.2Income from continuing operations before income taxes
    
    
    3.3
    
    
    
    5.1Provision for income taxes
    
    
    2.1
    
    
    
    0.9Income from continuing operations
    
    
    1.2
    
    
    
    4.2Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (1.3
    )Net income
    
    
    1.2
    
    
    
    2.9Net loss attributed to noncontrolling interest
    
    
    
    
    
    
    Net income attributable to Vangent
    
    
    1.2
    %
    
    
    2.9
    %
 Three Months Ended April 2, 2011 and April 3, 2010
 Buccaneer Acquisition
  Revenue
   24




---



##### Table of Contents



Three Months EndedApril 2,
    
    
    April 3,
    
    
    Increase (Decrease)2011
    
    
    2010
    
    
    Amount
    
    
    PercentRevenue by business segmentGovernment Group
    
    $
    152,048
    
    
    $
    177,237
    
    
    $
    (25,189
    )
    
    
    (14
    )%International Group
    
    
    19,009
    
    
    
    11,825
    
    
    
    7,184
    
    
    
    61
    %Human Capital Group
    
    
    4,922
    
    
    
    6,135
    
    
    
    (1,213
    )
    
    
    (20
    )%Elimination
    
    
    (130
    )
    
    
    (1,000
    )
    
    
    870
    
    
    
    87
    %$
    175,849
    
    
    $
    194,197
    
    
    $
    (18,348
    )
    
    
    (9
    )%Business segment revenue as a percent of total revenueGovernment Group
    
    
    86.5
    %
    
    
    91.3
    %International Group
    
    
    10.8
    
    
    
    6.1Human Capital Group
    
    
    2.8
    
    
    
    3.2Elimination
    
    
    (0.1
    )
    
    
    (0.6
    )100.0
    %
    
    
    100.0
    %
 Government Group Revenue
    International Group Revenue
  Human Capital Group Revenue
  Cost of Revenue
   25




---



##### Table of Contents



General and Administrative Expenses
   Selling and Marketing Expenses
  Operating Income
  Three Months EndedApril 2,
    
    
    April 3,
    
    
    Increase (Decrease)2011
    
    
    2010
    
    
    Amount
    
    
    PercentOperating income (loss) by business segmentGovernment Group
    
    $
    13,213
    
    
    $
    18,869
    
    
    $
    (5,656
    )
    
    
    (30
    )%International Group
    
    
    935
    
    
    
    62
    
    
    
    873
    
    
    
    1,408Human Capital Group
    
    
    (750
    )
    
    
    (820
    )
    
    
    70
    
    
    
    9Corporate
    
    
    (28
    )
    
    
    (5
    )
    
    
    (23
    )
    
    
    (460
    )$
    13,370
    
    
    $
    18,106
    
    
    $
    (4,736
    )
    
    
    (26
    )%Operating margin by business segmentGovernment Group
    
    
    8.7
    %
    
    
    10.7
    %International Group
    
    
    4.9
    %
    
    
    0.5
    %Human Capital Group
    
    
    (15.2
    )%
    
    
    (13.4
    )%
    26




---



##### Table of Contents



Interest Expense, Net
  Provision for Income Taxes
  Three Months EndedApril 2,
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)Provision (benefit)for income taxesBefore effects of adjustment and
tax valuation allowance
    
    $
    2,116
    
    
    $
    2,904
    
    
    $
    (788
    )Deferred tax effect of interest rate
swap agreement
    
    
    1,614
    
    
    
    
    
    
    
    1,614Reversal of tax valuation allowance
    
    
    
    
    
    
    (1,070
    )
    
    
    1,070Total provision for income taxes
    
    $
    3,730
    
    
    $
    1,834
    
    
    $
    1,896Effective tax rateBefore effects of adjustment and tax
valuation allowance
    
    
    36
    %
    
    
    29
    %
    
    
    7
    %Deferred tax effect of interest rate
swap agreement
    
    
    27
    
    
    
    
    
    
    
    27Reversal of tax valuation allowance
    
    
    
    
    
    
    (10
    )
    
    
    10Total provision for income taxes
    
    
    63
    %
    
    
    19
    %
    
    
    44
    %
    27




---



##### Table of Contents



Discontinued Operations
  Three Months EndedApril 2,
    
    
    April 3,2011
    
    
    2010Revenue
    
    $
    137
    
    
    $
    7,135Costs and expenses
    
    
    144
    
    
    
    7,500Expected loss on sale or disposal
    
    
    
    
    
    
    2,618Other (income) expense, net
    
    
    5
    
    
    
    (753
    )Loss from discontinued operations before
income taxes
    
    
    (12
    )
    
    
    (2,230
    )Provision for income taxes
    
    
    
    
    
    
    207Loss from discontinued operations, net of tax
    
    $
    (12
    )
    
    $
    (2,437
    )
 Liquidity and Capital Resources
  
   Long-Term Debt
 Risk Factors
  28




---



##### Table of Contents



Working Capital
 A summary of working capital follows (in thousands):
 April 2,
    
    
    December 31,
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)Cash and cash equivalents
    
    $
    46,438
    
    
    $
    27,194
    
    
    $
    19,244Trade receivables, net
    
    
    110,010
    
    
    
    122,940
    
    
    
    (12,930
    )Prepaid expenses and other
    
    
    13,467
    
    
    
    12,572
    
    
    
    895Current portion of long-term debt
    
    
    
    
    
    
    (1,401
    )
    
    
    1,401Accounts payable and accrued liabilities
    
    
    (76,761
    )
    
    
    (80,672
    )
    
    
    3,911Accrued interest payable
    
    
    (2,803
    )
    
    
    (7,781
    )
    
    
    4,978Deferred revenue
    
    
    (10,389
    )
    
    
    (7,964
    )
    
    
    (2,425
    )Discontinued operations, net
    
    
    
    
    
    
    (1,551
    )
    
    
    1,551Net working capital
    
    $
    79,962
    
    
    $
    63,337
    
    
    $
    16,625
  Cash Flows
  Three Months EndedApril 2,
    
    
    April 3,
    
    
    Increase2011
    
    
    2010
    
    
    (Decrease)Net cash provided by (used in)Operating activities
    
    $
    21,850
    
    
    $
    (19,007
    )
    
    $
    40,857Investing activities
    
    
    (1,778
    )
    
    
    (1,427
    )
    
    
    (351
    )Financing activities
    
    
    (1,401
    )
    
    
    (13,641
    )
    
    
    12,240
 Net Cash Provided by (Used in) Operating Activities
   29




---



##### Table of Contents



Net Cash Used in Investing Activities
  Net Cash Used in Financing Activities
  Contractual Obligations
  Payments Due by YearTotal
    
    
    2011*
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    ThereafterLong-Term Debt:Term loan under senior secured
credit
facility due February 2013 (1)
    
    $
    215.4
    
    
    $
    
    
    
    $
    0.3
    
    
    $
    215.1
    
    
    $
    
    
    
    $
    
    
    
    $
    Senior subordinated notes due
February 2015
    
    
    190.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190.0
    
    
    
    Interest relating to debt (2)
    
    
    83.4
    
    
    
    13.2
    
    
    
    23.4
    
    
    
    19.4
    
    
    
    18.3
    
    
    
    9.1
    
    
    
    Operating leases (3)
    
    
    70.9
    
    
    
    14.8
    
    
    
    17.6
    
    
    
    13.1
    
    
    
    6.6
    
    
    
    4.9
    
    
    
    13.9Purchase and other contractual
commitments (4)
    
    
    22.2
    
    
    
    14.0
    
    
    
    6.4
    
    
    
    0.9
    
    
    
    0.6
    
    
    
    0.3
    
    
    
    $
    581.9
    
    
    $
    42.0
    
    
    $
    47.7
    
    
    $
    248.5
    
    
    $
    25.5
    
    
    $
    204.3
    
    
    $
    13.9
 
 *
    
    Remaining nine months.(1)
    
    Scheduled payments for the term loan under the senior secured credit facility do not give
effect to a possible future mandatory prepayment in March 2012 that could result from excess
cash flow, if any, for the year ended December 31, 2011.(2)
    
    Future interest payments consist of interest on the variable-rate term-loan borrowing under
the senior secured credit facility and interest based on the fixed rate of 9 5/8% for the
senior subordinated notes.  30




---



##### Table of Contents



(3)
    
    Future contractual obligations for leases represent future minimum payments under
noncancelable operating leases primarily for office space, reduced by sublease income under
contract.(4)
    
    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
 Contractual Obligations.
 Transactions with Related Parties
  Recent Accounting Pronouncements
  
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Quantitative and Qualitative Disclosures about Market Risk
 
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
   31




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
  
 ITEM 1A.
    
    RISK FACTORS
 Risk
Factors
 
 ITEM 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 5.
    
    OTHER INFORMATION
  
 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.May 17, 2011
    /s/ James C. ReaganJames C. ReaganSenior Vice President and Chief Financial Officer
(Principal Financial and Principal Accounting Officer)  32




---



##### 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.
  33