##### 



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, DC
    20549
      Form 10-Q
   þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    June 30, 2007.   Commission File Number 333 - 89756
      
  Alion Science and Technology
    Corporation
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware(State or Other
    Jurisdiction of
    Incorporation of Organization)

54 - 2061691(I.R.S. Employer
    Identification No.)   10 West
    35th Street
    Chicago, IL 60616
    (312) 567  4000

1750 Tysons Boulevard,
    Suite 1300
    McLean, VA 22102
    (703) 918 - 4480  (Address, including Zip Code and
    Telephone Number with
 Area Code, of Principal
    Executive Offices)
       (Former name, former address and
    former fiscal year, if changed since last report)
  þ o
    o o þ
  Rule 12b-2 o þ




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  FORM 10-Q
  FOR THE
    QUARTER ENDED JUNE 30, 2007
  PART I 
    Financial InformationItem 1.


Financial Statements (unaudited)Condensed
    Consolidated Balance Sheets


2Condensed
    Consolidated Statements of Operations


3Condensed
    Consolidated Statements of Cash Flows


4Notes to Condensed
    Consolidated Financial Statements


5Item 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


33Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


53Item 4.


Controls and
    Procedures


54Item 4T.


Controls and
    Procedures


54PART II 
    Other Information


55Item 1.


Legal
    Proceedings


55Item 1A.


Risk
    Factors


55Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


55Item 3.


Defaults Upon
    Senior Securities


55Item 4.


Submission of
    Matters to a Vote of Security Holders


55Item 5.


Other
    Information


55Item 6.


Exhibits


55   1




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
 CONDENSED
    CONSOLIDATED BALANCE SHEETS 
    As of June 30, 2007 and September 30, 2006  June 30,


September 30,2007


2006(In thousands, except share and per share information)(Unaudited)Current assets:Cash and cash equivalents

$
78


$
2,755Accounts receivable, net


201,485



150,412Stock subscriptions receivable






8,990Prepaid expenses and other current
    assets


6,015



6,028Total current assets


207,578



168,185Property, plant and equipment, net


16,869



14,644Intangible assets, net


60,099



75,403Goodwill


394,428



387,927Other assets


6,056



4,810Total assets


685,030



650,969Current liabilities:Book cash overdraft


4,186



Interest payable


13,852



240Current portion, Term B senior
    term loan payable


2,180



2,576Current portion, acquisition
    obligations


5,807



11,457Trade accounts payable and accrued
    liabilities


61,262



62,803Accrued payroll and related
    liabilities


35,504



35,135Billings in excess of costs and
    estimated earnings on uncompleted contracts


2,387



2,163Total current liabilities


125,178



114,374Acquisition obligations, excluding
    current portion






3,568Notes payable to bank


25,300



12,300Term B senior term loan payable,
    excluding current portion


214,518



252,100Senior Unsecured Notes


243,473



Bridge loan payable






164,680Subordinated note payable


50,216



46,963Accrued compensation, excluding
    current portion


27,208



21,026Accrued postretirement benefit
    obligations


4,814



3,722Non-current portion of lease
    obligations


4,397



4,292Redeemable common stock warrants


38,649



35,234Total liabilities


733,753



658,259Shareholders deficit:Common stock, $0.01 par
    value, 8,000,000 shares authorized, 5,256,770 and
    5,210,126 shares issued and outstanding at June 30,
    2007 and September 30, 2006


52



52Additional paid-in capital


94,029



91,829Accumulated deficit


(142,804
)


(99,171
)Total shareholders deficit


(48,723
)


(7,290
)Total liabilities and
    shareholders deficit

$
685,030


$
650,969    2




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
 CONDENSED
    CONSOLIDATED STATEMENTS OF OPERATIONS  Three Months Ended


Nine Months EndedJune 30,


June 30,2007


2006


2007


2006(In thousands, except share and per share information)(Unaudited)Contract revenue

$
184,933


$
116,830


$
553,971


$
329,308Direct contract expense


142,172



87,192



423,785



244,544Gross profit


42,761



29,638



130,186



84,764Operating expenses:Indirect contract expense


11,689



7,212



32,861



19,370Research and development


577



531



1,878



1,301General and administrative


16,982



15,053



48,425



41,233Rental and occupancy expense


7,876



5,390



24,352



15,443Depreciation and amortization


4,955



2,543



16,294



9,734Bad debt expense


333



292



888



507Total operating expenses


42,412



31,021



124,698



87,588Operating income (loss)


349



(1,383
)


5,488



(2,824
)Other income (expense):Interest income


54



108



196



569Interest expense


(14,290
)


(6,998
)


(43,339
)


(14,915
)Loss on extinguishment of debt










(6,170
)


Other


61



38



181



254Loss before income taxes


(13,826
)


(8,235
)


(43,644
)


(16,916
)Income tax benefit (expense)


(1
)


(7
)


11



(26
)Net loss

$
(13,827
)

$
(8,242
)

$
(43,633
)

$
(16,942
)Basic and diluted loss per share

$
(2.63
)

$
(1.60
)

$
(8.40
)

$
(3.34
)Basic and diluted weighted average
    common shares outstanding


5,252,863



5,157,009



5,194,412



5,076,060    3




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
 CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS  Nine Months EndedJune 30,2007


2006(In thousands)(Unaudited)Cash flows from operating
    activities:Net loss

$
(43,633
)

$
(16,942
)Adjustments to reconcile net loss
    to net cash used in operating activities:Depreciation and amortization


16,294



9,734Accretion of debt to face value


724



689Amortization of debt issuance costs


2,325



1,260Loss on extinguishment of debt


6,170



Decrease/(Increase) in value of
    interest rate cap agreement


238



(364
)Change in fair value of redeemable
    common stock warrants


3,415



1,450Stock-based compensation


9,859



8,282Gain on disposal of assets


(18
)


(1
)Gain on sale of investments, net


(10
)


(21
)Changes in assets and liabilities,
    net of effect of acquisitions:Accounts receivable, net


(50,724
)


(21,365
)Other assets


(1,536
)


5,430Trade accounts payable and accruals


480



2,256Interest payable


13,612



413Other liabilities


3,951



2,223Net cash used in operating
    activities


(38,853
)


(6,956
)Cash flows from investing
    activities:Cash paid for acquisitions, net of
    cash acquired


(12,551
)


(278,805
)Capital expenditures


(6,497
)


(4,497
)Net cash used in investing
    activities


(19,048
)


(283,302
)Cash flows from financing
    activities:Change in book overdraft


4,186



Proceeds from Term B Senior Credit
    Facility note payable


15,000



118,000Proceeds from Senior Unsecured
    Notes


250,000



Repayment of Term B Credit
    Facility note payable


(52,894
)


(1,250
)Repayment of mezzanine note
    warrants






(13,643
)Proceeds from Bridge Loan






170,000Repayment of Bridge Loan


(170,000
)


Payment of debt issuance costs


(10,069
)


(7,758
)Net borrowings under revolving
    credit facility


13,000



5,975Purchase interest rate cap
    agreement






(44
)Purchase of common stock from ESOP
    Trust


(6,656
)


(17,739
)Cash received from sale of common
    stock to ESOP Trust


12,657



1,693Net cash provided by financing
    activities


55,224



255,234Net decrease in cash and cash
    equivalents


(2,677
)


(35,024
)Cash and cash equivalents at
    beginning of period


2,755



37,778Cash and cash equivalents at end
    of period

$
78


$
2,754Supplemental disclosure of cash
    flow information:Cash paid for interest


20,045



8,869Cash paid for taxes


697



610Non-cash financing activities:Common stock issued to ESOP Trust
    in satisfaction of employer contribution liability


5,100



3,587    4




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)
  (1)
    Description
    and Formation of the Business      (2)
    Summary
    of Significant Accounting Policies  Basis
    of Presentation and Principles of Consolidation
  Form 10-K
    
    Human Factors Application, Inc. (HFA)  acquired
    November 1998
    Innovative Technology Solution Corporation (ITSC) 
    acquired October 2003
    Alion  IPS Corporation (IPS) 
    acquired February 2004
    Alion  METI Corporation (METI)  acquired
    February 2005
    Alion  CATI Corporation (CATI)  acquired
    February 2005
    Alion Canada (US) Corporation  established February
    2005
    Alion Science and Technology (Canada) Corporation 
    established February 2005
    Alion  JJMA Corporation (JJMA)  acquired
    April 2005
    Alion Technical Services Corporation (Virginia) 
    established July 2005
    Alion  BMH Corporation (BMH)  acquired
    February 2006
    Washington Consulting, Inc. (WCI)  acquired February
    2006
    Alion  MA&D Corporation (MA&D) 
    acquired May 2006
    Alion Technical Services Corporation (Delaware) 
    established May 2006 5




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
   Fiscal
    and Quarter Periods
    Use of
    Estimates
    Reclassifications
    Revenue
    Recognition
  time-and-material
  time-and-material
     6




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
    SOP 81-1, Accounting for Performance on Construction-Type and Certain
    Production-Type Contracts
  Income
    Taxes
    Cash
    and Cash Equivalents
    Accounts
    Receivable and Billings in Excess of Costs and Estimated
    Earnings on Uncompleted Contracts
    Property,
    Plant and Equipment
   7




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Goodwill
    and Other Intangibles
  Goodwill and Other Intangible
    Assets
  Postretirement
    Benefits
  Employers Accounting for Postretirement Benefits Other
    Than Pension Employers Accounting for Defined
    Benefit Pension and Other Postretirement Plans
  Fair
    Value of Financial Instruments
    Cash,
    cash equivalents, accounts payable and accounts
    receivable
    Marketable
    securities
    Senior
    long-term debt
    Interest
    rate caps
    Redeemable
    common stock warrants
   8




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Alion
    Stock
    Recently
    Issued Accounting Pronouncements
  Fair Value Measurements
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  (3)
    Employee
    Stock Ownership Plan (ESOP) and Stock Ownership Trust    (4)
    Postretirement
    Benefits   9




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
    (5)
    Loss Per
    Share    (6)
    Shareholders
    Deficit      (7)
    Accounts
    Receivable  June 30,


September 30,2007


2006(In thousands)Billed receivables

$
127,991


$
106,310Unbilled receivables:Amounts currently billable


49,301



36,548Revenues recorded in excess of
    milestone billings on fixed price contracts


7,852



5,591Revenues recorded in excess of
    estimated contract value or funding


16,510



3,354Retainages and other amounts
    billable upon contract completion


4,374



2,570Allowance for doubtful accounts


(4,543
)


(3,961
)Total Accounts Receivable

$
201,485


$
150,412    10




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  (8)
    Property,
    Plant and Equipment  June 30,


September 30,2007


2006(In thousands)Leasehold improvements

$
3,755


$
2,709Equipment and software


30,694



25,188Total cost


34,449



27,897Less: accumulated depreciation and
    amortization


(17,580
)


(13,253
)Net fixed assets

$
16,869


$
14,644     (9)
    Goodwill
    and Intangible Assets    Total(In thousands)Balance as of October 1, 2006

$
387,927Adjustment to initial allocation
    made during the nine months ended June 30, 2007 (includes
    earn out obligations)


6,501Balance as of June 30, 2007

$
394,428       AccumulatedGross


Amortization


Net(In thousands)Purchased contracts

$
112,032


$
53,468


$
58,564Internal use software and
    engineering designs


2,155



692



1,463Non-compete agreements


650



578



72Total

$
114,837


$
54,738


$
60,099    11




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
    (In thousands)For the remaining three months:

2007

$
3,725For the year ending September 30:

2008


14,6312009


12,5412010


10,9652011


6,8432012


6,150and thereafter


5,244Total:

$
60,099   (10)
    Long-Term
    Debt  Term B
    Senior Credit Facility
    
    In April 2005, the first amendment to the Term B Senior Credit
    Facility (Amendment One) made certain changes to the Term B
    Senior Credit Facility and added $72.0 million in term
    loans to the Companys total Term B Senior Credit Facility
    debt.
    In March 2006, the second amendment to the Term B Senior Credit
    Facility (Amendment Two) made certain changes to the Term B
    Senior Credit Facility and increased the term loan commitment by
    $68.0 million, of which the full $68.0 million had
    been drawn down by the Company as of June 30, 2007, and
    increased the revolving credit commitment from
    $30.0 million to $50.0 million.
    On June 30, 2006, the third amendment to the Term B Senior
    Credit Facility (Amendment Three) made certain changes to the
    Term B Senior Credit Facility and added $50.0 million in
    term loans to the Companys total Term B Senior Credit
    Facility debt.
    On January 4, 2007, the fourth increment to the Term B
    Senior Credit Facility (Increment Four) added $15.0 million
    in term loans to the Companys total Term B Senior Credit
    Facility debt.
    On February 6, 2007, the fourth amendment to the Term B
    Senior Credit Facility (Amendment Four) made certain changes to
    the Term B Senior Credit Facility, including (i) extending
    the maturity date of the senior term loans to February 6,
    2013, (ii) adjusting the principal repayment schedule to
    require one balloon principal repayment at maturity, and
    (iii) adding an incurrence test as an additional condition
    to the Companys ability to incur permitted indebtedness. 12




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
     
    a senior term loan, which is comprised of the following balances:  June 30,


September 30,2007


2006(In thousands)Senior term loan

$
221,121


$
259,015Less: Unamortized debt issuance
    costs


(4,423
)


(4,339
)Senior term loan payable

$
216,698


$
254,676Less: current maturities, net of
    unamortized debt issue costs


(2,180
)


(2,576
)Senior term loan payable, less
    current maturities

$
214,518


$
252,100   
    a $50.0 million senior revolving credit facility under
    which approximately $25.3 million was outstanding as of
    June 30, 2007, and approximately $3.7 million of which
    was allocated for letters of credit and as such is not available
    to be borrowed; and
    a $135.0 million uncommitted incremental term loan
    accordion facility.  Interest and Fees.
    Other Fees and Expenses.
  Financial Covenants.
  Senior
    Unsecured Notes
   13




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Use of Proceeds.
  Exchange Offer; Registration Rights.
  Security.
  Ranking.
  Interest and Fees.
  Optional Redemption.
    12-month
  Period

Redemption Price2011


105.125
%2012


102.563
%2013 and thereafter


100.000
%   Covenants.
  Bridge
    Loan
   14




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
    Interest
    Payable
    June 30,


September 30,2007


2006(In thousands)Senior Unsecured Notes

$
10,179


$
Term B Senior Term Loan


3,673



137Bridge loan payable






103Total

$
13,852


$
240   Subordinated
    Note
    paid-in-kind
    2007


2008


2009


2010


2011


2012


Thereafter


Total(In thousands)Senior Term Loan(1)

$
556


$
2,224


$
2,224


$
2,224


$
2,224


$
2,224


$
209,445


$
221,121Senior Unsecured Notes(2)


























250,000



250,000Subordinated Note(3)










19,950



19,950















39,900Subordinated Paid inKind Notes(4)










7,402



7,402















14,804Total principal payments

$
556


$
2,224


$
29,576


$
29,576


$
2,224


$
2,224


$
459,445


$
525,825     (1)
    
    The table does not reflect any prepayments of the senior term
    loan based on excess cash flow or other conditions as the timing
    and amount of any such payments are uncertain. The approximate
    $216.7 million on the face of the balance sheet (current
    and long-term portion) includes, as of June 30, 2007,
    approximately $4.4 million of unamortized debt issue costs
    (which initially totaled approximately $12.3 million). The
    Company expects to refinance the senior term loan before the end
    of fiscal year 2012. 15




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
   (2)
    
    The table reflects the $250.0 million of Senior Unsecured
    Notes currently issued and outstanding. The principal amount of
    $250.0 million is due and payable on February 1, 2015.(3)
    
    Repayment of $39.9 million for the face value of the
    Subordinated Note in two equal payments of $19.95 million
    in years 2009 and 2010. The $39.9 million includes, as of
    June 30, 2007, approximately $3.1 million of
    unamortized debt discount assigned to fair value of the
    detachable warrants. On December 20, 2002, approximately
    $7.1 million was assigned as the fair value of the warrants
    in accordance with Emerging Issues Task Force Issue No.
    00-19,
    Accounting for Derivative Financial Instruments Indexed to,
    and Potentially settled in, a Companys Own Stock.The
    Company expects to refinance the Subordinated Note before the
    end of fiscal year 2008.(4)
    
    During the eight-year term of the Subordinated Note,
    approximately $14.8 million of principal accretes to the
    note in the form of Paid in Kind (PIK) notes and is included in
    the principal payments in fiscal years 2009 and 2010. The
    principal, together with the outstanding balance of the PIK
    notes will be due and payable in equal amounts at the end of
    fiscal years 2009 and 2010. The Company expects to refinance the
    PIK notes before the end of fiscal year 2008.  (11)
    Redeemable
    Common Stock Warrants  No. 00-19, Accounting for Derivative Financial Instruments Indexed to,
    and Potentially Settled in, a Companys Own Stock.
 16




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  (12)
    Leases    Fiscal Years Ending

(In thousands)2007 (for the remainder of fiscal
    year)

$
6,9572008


25,6482009


22,4002010


16,6612011


14,5222012


9,961and thereafter


22,941Gross lease payments

$
119,090Less: non-cancelable subtenant
    receipts


(4,306
)Net lease payments

$
114,784     (13)
    Stock
    Appreciation Rights    Accounting for Stock-Based Compensation Share-Based Payment
 17




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Alion
    Science and Technology Corporation
    Stock-based Compensation Disclosures per FAS 123 and
    FAS 123R
    Stock Appreciation Rights
    As of June 30, 2007
  Shares


Shares


TotalGranted to


Granted to


Shares


Exercise


Outstanding


Outstanding











Vested


ExercisableDate of Grant

Employees


Directors


Granted


Price


at 9/30/06


at 6/30/07


Forfeited


Exercised


Expired


at 6/30/07


at 6/30/07December 2002


64,250







64,250


$
10.00



47,785



40,660



1,840



5,285







32,050



17,300December 2002






29,400



29,400


$
10.00



























May 2003


300







300


$
11.13



240



150







90







90



90June 2003


300







300


$
11.13



300







120



180











November 2003


129,550







129,550


$
14.71



100,466



85,666



4,628



10,172







48,256



16,188November 2003






12,600



12,600


$
14.71



2,800



2,800















2,800



2,800November 2004






12,600



12,600


$
19.94



12,600



12,600















8,400



8,400February 2005


164,750







164,750


$
19.94



135,588



122,363



9,875



3,350







59,963



March 2005


2,000







2,000


$
19.94



2,000



2,000















1,000



April 2005


33,000







33,000


$
29.81



27,500



27,500















12,500



June 2005


2,000







2,000


$
29.81



2,000



2,000















1,000



December 2005


276,675







276,675


$
35.89



257,900



237,625



18,762



1,513







63,225



February 2006


13,000







13,000


$
35.89



10,250



10,250















2,563



February 2006


7,500







7,500


$
35.89



7,500



5,625



1,875











1,875



May 2006


7,000







7,000


$
37.06



7,000



7,000















1,750



July 2006


15,000







15,000


$
37.06



15,000



15,000



















August 2006


1,250







1,250


$
37.06



1,250



1,250



















December 2006


239,290







239,290


$
41.02







232,250



7,040











500



500February 2007


33,450







33,450


$
41.02







32,200



1,250















Total


989,315



54,600



1,043,915







630,179



836,939



45,390



20,590







235,972



45,278Wtd Avg Exercise Price

$
29.96


$
13.38


$
29.09






$
26.39


$
31.22


$
30.08


$
15.86


$



$
22.76


$
14.16   18




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Alion
    Science and Technology Corporation
    Stock-based Compensation Disclosures per FAS 123 and
    123R
    Stock Appreciation Rights
    As of June 30, 2007
  Risk Free






Remaining LifeDate of Grant

Interest Rate

Volatility


Expected Life

(months)December 2002

4.06% - 4.49%


60%


5 yrs


4.3December 2002

4.06% - 4.49%


60%


3 yrs


0.0May 2003

2.70% - 3.30%


55%


5 yrs


9.7June 2003

2.70% - 3.30%


55%


5 yrs


10.5November 2003

4.06% - 4.49%


60%


5 yrs


16.1November 2003

4.06% - 4.49%


60%


3 yrs


0.0November 2004

3.10% - 3.60%


45%


3 yrs


4.3February 2005

3.10% - 3.60%


45%


4 yrs


18.7March 2005

3.10% - 3.60%


45%


4 yrs


19.8April 2005

4.10% - 4.20%


45%


4 yrs


20.7June 2005

4.10% - 4.20%


45%


4 yrs


22.9December 2005

4.20% - 4.20%


40%


4 yrs


29.5February 2006

4.20% - 4.20%


40%


4 yrs


31.2February 2006

4.20% - 4.20%


40%


4 yrs


31.7May 2006

4.82% - 4.83%


35%


4 yrs


34.5July 2006

4.82% - 4.83%


35%


4 yrs


35.9August 2006

4.82% - 4.83%


35%


4 yrs


37.8December 2006

4.54% - 4.58%


35%


4 yrs


41.7February 2007

4.54% - 4.58%


35%


4 yrs


43.8Wtd Avg Remaining Life (months)










28.7  19




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  (14)
    Phantom
    Stock Plans    Accounting for
    Stock-Based Compensation Share-Based Payment
 20




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Alion
    Science and Technology Corporation
    Stock-based Compensation Disclosures per FAS 123 and
    FAS 123R
    Phantom Stock
    as of June 30, 2007
  GrantShares


Shares


Total


Date





OutstandingGranted to


Granted to


Shares


Price per


Outstanding


at











Vested at


Exercisable atDate of Grant

Employees


Directors


Granted


Share


at 9/30/06


6/30/07


Forfeited


Exercised


Expired


6/30/07


6/30/07February 2003


171,000







171,000


$
10.00



85,000



59,000







26,000







24,750



24,750November 2003


52,685







52,685


$
14.71



32,971



26,513







6,458







8,158



8,158February 2005


202,763







202,763


$
19.94



202,763



202,763



















February 2005


103,414







103,414


$
19.94



103,414



103,414



















February 2005


5,015







5,015


$
19.94



5,015



5,015















2,508



August 2005


2,960







2,960


$
33.78



2,960



2,960















987



November 2005


66,592







66,592


$
35.89



66,592



66,592



















November 2005






7,808



7,808


$
35.89



6,832



6,181







651







1,626



1,626November 2005


55,726







55,726


$
35.89



55,726



55,726



















November 2006






5,978



5,978


$
41.02







5,978



















November 2006


65,456







65,456


$
41.02







65,456



















Total


725,612



13,786



739,398







561,274



599,599







33,109







38,029



34,534Wtd Avg Grant Date Fair Value
    Price per Share

$
21.86


$
38.11


$
22.17






$
21.87


$
24.73


$



$
11.43


$



$
13.39


$
12.33  21




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Alion
    Science and Technology Corporation
    Stock-based Compensation Disclosures per FAS 123 and
    FAS 123R
    Phantom Stock
    as of June 30, 2007
  Risk Free








Remaining LifeDate of Grant

Interest Rate


Volatility


Expected Life


(months)February 2003


4.06% - 4.49%



60
%


5 yrs



6.7November 2003


4.06% - 4.49%



60
%


5 yrs



15.8February 2005


3.10% - 3.60%



45
%


3 yrs



6.7February 2005


3.10% - 3.60%



45
%


3 yrs



6.7February 2005


3.10% - 3.60%



45
%


4 yrs



18.7August 2005


3.72% - 3.77%



45
%


3 yrs



12.9November 2005


4.20% - 4.20%



40
%


3 yrs



16.1November 2005


4.20% - 4.20%



40
%


3 yrs



16.1November 2005


4.20% - 4.20%



40
%


5 yrs



40.1November 2006


4.54% - 4.58%



35
%


3 yrs



28.4November 2006


4.54% - 4.58%



35
%


3 yrs



28.4TotalWtd Avg Remaining Life (months)














14.1   (15)
    Segment
    Information and Customer Concentration      (16)
    Guarantor/Non-guarantor
    Condensed Consolidated Financial Information   22




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Condensed
    Consolidating Balance Sheet Information at June 30,
    2007
  Non-Guarantor


GuarantorParent


Companies


Companies


Eliminations


Consolidated(In thousands)Current assets:Cash and cash equivalents

$
77


$



$
1


$



$
78Accounts receivable


196,347



5,134



4







201,485Other current assets


5,903



110



2







6,015Total current assets


202,327



5,244



7







207,578Property, plant and equipment, net


16,672



197











16,869Intangible assets, net


60,099















60,099Goodwill


394,428















394,428Investment in subsidiaries


7,836











(7,836
)


Intercompany receivables






7,355







(7,355
)


Other assets


6,042



14











6,056Total assets


687,404



12,810



7



(15,191
)


685,030Current liabilities:Book cash overdraft


3,478



706



2







4,186Interest payable


13,852















13,852Current portion, Term B Senior
    Credit Facility note payable


2,180















2,180Current portion, acquisition
    obligations


5,807















5,807Trade accounts payable and accrued
    liabilities


59,431



1,826



5







61,262Accrued payroll and related
    liabilities


34,166



1,215



123







35,504Billings in excess of costs and
    estimated earnings on uncompleted contracts


2,387















2,387Total current liabilities


121,301



3,747



130







125,178Intercompany payables


7,083







272



(7,355
)


Notes payable to bank


25,300















25,300Term B Senior Credit Facility note
    payable, excluding current portion


214,518















214,518Senior Unsecured Notes


243,473















243,473Subordinated note payable


50,216















50,216Accrued compensation, excluding
    current portion


26,458



750











27,208Accrued postretirement benefit
    obligations


4,814















4,814Non-current portion of lease
    obligations


4,315



82











4,397Redeemable common stock warrants


38,649















38,649Total liabilities


736,127



4,579



402



(7,355
)


733,753Shareholders equity (deficit):Common stock


52



1







(1
)


52Additional paid-in capital


94,029



2,800







(2,800
)


94,029Treasury stock






(2
)






2



Accumulated surplus (deficit)


(142,804
)


5,432



(395
)


(5,037
)


(142,804
)Total shareholders equity
    (deficit)


(48,723
)


8,231



(395
)


(7,836
)


(48,723
)Total liabilities and
    shareholders equity (deficit)

$
687,404


$
12,810


$
7


$
(15,191
)

$
685,030  23




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Condensed
    Consolidating Balance Sheet Information at September 30,
    2006
  Non-Guarantor


GuarantorParent


Companies


Companies


Eliminations


Consolidated(In thousands)Current assets:Cash and cash equivalents

$
2,728


$
(32
)

$
59


$



$
2,755Accounts receivable


144,751



5,657



4







150,412Stock subscriptions receivable


8,990















8,990Other current assets


5,885



134



9







6,028Total current assets


162,354



5,759



72







168,185Property, plant and equipment, net


14,029



299



316







14,644Intangible assets, net


75,403















75,403Goodwill


387,927















387,927Investment in subsidiaries


7,979











(7,979
)


Intercompany receivables






8,310







(8,310
)


Other assets


4,797



13











4,810Total assets


652,489



14,381



388



(16,2889
)


650,969Current liabilities:Interest payable


240















240Current portion, Term B Senior
    Credit Facility note payable


2,576















2,576Current portion, acquisition
    obligations


11,457















11,457Trade accounts payable and accrued
    liabilities


59,174



3,625



4







62,803Accrued payroll and related
    liabilities


33,288



1,694



153







35,135Billings in excess of costs and
    estimated earnings on uncompleted contracts


2,163















2,163Total current liabilities


108,898



5,319



157







114,374Acquisition obligations, excluding
    current portion


3,568















3,568Intercompany payables


7,784







526



(8,310
)


Notes payable to bank


12,300















12,300Term B Senior Credit Facility note
    payable, excluding current portion


252,100















252,100Bridge loan payable


164,680















164,680Subordinated note payable


46,963















46,963Accrued compensation, excluding
    current portion


20,254



772











21,026Accrued postretirement benefit
    obligations


3,722















3,722Non-current portion of lease
    obligations


4,276



16











4,292Redeemable common stock warrants


35,234















35,234Total liabilities


659,779



6,107



683



(8,310
)


658,259Shareholders equity
    (deficit):Common stock


52



1







(1
)


52Additional paid-in capital


91,829



2,800







(2,800
)


91,829Treasury stock






(2
)






2



Accumulated surplus (deficit)


(99,171
)


5,475



(295
)


(5,180
)


(99,171
)Total shareholders equity
    (deficit)


(7,290
)


8,274



(295
)


(7,979
)


(7,290
)Total liabilities and
    shareholders equity (deficit)

$
652,489


$
14,381


$
388


$
(16,289
)

$
650,969  24




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Condensed
    Consolidating Statement of Operations
    for the Three Months Ended June 30, 2007
  Non-Guarantor


GuarantorParent


Companies


Companies


Eliminations


Consolidated(In thousands)Contract revenue

$
177,937


$
6,946


$
50


$



$
184,933Direct contract expense


136,973



5,165



34







142,172Gross profit


40,964



1,781



16







42,761Operating expenses:Indirect contract expense


10,425



1,254



10







11,689Research and development


492



6



79







577General and administrative


16,735



285



(38
)






16,982Rental and occupancy expense


7,840



22



14







7,876Depreciation and amortization


4,920



35











4,955Bad debt expense


317



16











333Total operating expenses


40,729



1,618



65







42,412Operating income (loss)


235



163



(49
)






349Other income (expense):Interest income


54















54Interest expense


(14,290
)














(14,290
)Other


291



(304
)


74







61Equity in net income (loss) of
    subsidiaries


(117
)










117



Income (loss) before income taxes


(13,827
)


(141
)


25



117



(13,826
)Income tax expense






(1
)










(1
)Net income (loss)

$
(13,827
)

$
(142
)

$
25


$
117


$
(13,827
)  25




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Condensed
    Consolidating Statement of Operations
    for the Three Months Ended June 30, 2006
  Non-Guarantor


GuarantorParent


Companies


Companies


Eliminations


Consolidated(In thousands)Contract revenue

$
109,695


$
7,085


$
50


$



$
116,830Direct contract expense


82,105



5,056



31







87,192Gross profit


27,590



2,029



19







29,638Operating expenses:Indirect contract expense


6,309



893



10







7,212Research and development


341







190







531General and administrative


14,792



259



2







15,053Rental and occupancy expense


5,381



1



8







5,390Depreciation and amortization


2,512



31











2,543Bad debt expense


292















292Total operating expenses


29,627



1,184



210







31,021Operating income (loss)


(2,037
)


845



(191
)






(1,383
)Other income (expense):Interest income


108















108Interest expense


(6,998
)














(6,998
)Other


38



(331
)


(13
)






38Equity in net income (loss) of
    subsidiaries


310











(310
)


Income (loss) before income taxes


(8,235
)


514



(204
)


(310
)


(8,235
)Income tax expense


(7
)














(7
)Net income (loss)

$
(8,242
)

$
514


$
(204
)

$
(310
)

$
(8,242
)  26




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Condensed
    Consolidating Statement of Operations
    for the Nine Months Ended June 30, 2007
  Non-Guarantor


GuarantorParent


Companies


Companies


Eliminations


Consolidated(In thousands)Contract revenue

$
533,102


$
20,684


$
185


$



$
553,971Direct contract expense


408,505



15,156



124







423,785Gross profit


124,597



5,528



61







130,186Operating expenses:Indirect contract expense


29,121



3,602



138







32,861Research and development


1,732



8



138







1,878General and administrative


47,534



966



(75
)






48,425Rental and occupancy expense


24,300



22



30







24,352Depreciation and amortization


16,192



102











16,294Bad debt expense


847



41











888Total operating expenses


119,726



4,741



231







124,698Operating income (loss)


4,871



787



(170
)






5,488Other income (expense):Interest income


196















196Interest expense


(43,339
)














(43,339
)Loss on extinguishment of debt


(6,170
)














(6,170
)Other


952



(841
)


70







181Equity in net income (loss) of
    subsidiaries


(143
)










143



Income (loss) before income taxes


(43,633
)


(54
)


(100
)


143



(43,644
)Income tax benefit






11











11Net income (loss)

$
(43,633
)

$
(43
)

$
(100
)


143


$
(43,633
)  27




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Condensed
    Consolidating Statement of Operations
    for the Nine Months Ended June 30, 2006
  Non-Guarantor


GuarantorParent


Companies


Companies


Eliminations


Consolidated(In thousands)Contract revenue

$
316,745


$
12,135


$
428


$



$
329,308Direct contract expense


235,602



8,671



271







244,544Gross profit


81,143



3,464



157







84,764Operating expenses:Indirect contract expense


18,043



1,301



26







19,370Research and development


932







369







1,301General and administrative


40,714



465



54







41,233Rental and occupancy expense


15,413



4



26







15,443Depreciation and amortization


9,689



45











9,734Bad debt expense


507















507Total operating expenses


85,298



1,815



475







87,588Operating income (loss)


(4,155
)


1,649



(318
)






(2,824
)Other income (expense):Interest income


569















569Interest expense


(14,915
)














(14,915
)Other


(1,048
)


(714
)


(80
)






254Equity in net income (loss) of
    subsidiaries


537











(537
)


Income (loss) before income taxes


(16,916
)


935



(398
)


(537
)


(16,916
)Income tax expense


(26
)














(26
)Net income (loss)

$
(16,942
)

$
935


$
(398
)

$
(537
)

$
(16,942
)  28




---



##### 



ALION
    SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Condensed
    Consolidating Statement of Cash Flows
    Nine Months Ended June 30, 2007
  Non-Guarantor


GuarantorParent


Companies


Companies


Consolidated(In thousands)Net cash used in operating
    activities

$
(38,119
)

$
(674
)

$
(60
)

$
(38,853
)Cash flows from investing
    activities:Cash paid for acquisitions, net of
    cash acquired


(12,551
)










(12,551
)Capital expenditures


(6,497
)










(6,497
)Net cash used in investing
    activities


(19,048
)










(19,048
)Cash flows from financing
    activities:Change in book overdraft


3,478



706



2



4,186Proceeds from Term B Senior Credit
    Facility note payable


15,000











15,000Proceeds from Senior Unsecured
    Notes


250,000











250,000Repayment of Term B Credit
    Facility note payable


(52,894
)










(52,894
)Repayment of Bridge Loan


(170,000
)










(170,000
)Payment of debt issuance costs


(10,069
)










(10,069
)Net borrowings under revolving
    credit facility


13,000











13,000Purchase of common stock from ESOP
    Trust


(6,656
)










(6,656
)Cash received from sale of common
    stock to ESOP Trust


12,657











12,657Net cash provided by financing
    activities


54,516



706



2



55,224Net increase (decrease) in cash
    and cash equivalents


(2,651
)


32



(58
)


(2,677
)Cash and cash equivalents at
    beginning of year


2,728



(32
)


59



2,755Cash and cash equivalents at end
    of year

$
77


$



$
1


$
78  29




---



##### 



ALION SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Condensed
    Consolidating Statement of Cash Flows
    Nine Months Ended June 30, 2006
  Non-Guarantor


GuarantorParent


Companies


Companies


Consolidated(In thousands)Net cash used in operating
    activities

$
(7,042
)

$
(221
)

$
(307
)

$
(6,956
)Cash flows from investing
    activities:Cash paid for acquisitions, net of
    cash acquired


(278,805
)










(278,805
)Capital expenditures


(4,168
)


(17
)


(312
)


(4,497
)Net cash used in investing
    activities


(282,973
)


(17
)


(312
)


(283,302
)Cash flows from financing
    activities:Proceeds from Term B Senior Credit
    Facility note payable


118,000











118,000Repayment of Term B Credit
    Facility note payable


(1,250
)










(1,250
)Repayment of mezzanine note
    warrants


(13,643
)










(13,643
)Proceeds from bridge loan


170,000











170,000Payment of debt issuance costs


(7,758
)










(7,758
)Net borrowings under revolving
    credit facility


5,975











5,975Purchase interest rate cap
    agreement


(44
)










(44
)Purchase of shares of common stock
    from ESOP Trust


(17,739
)










(17,739
)Cash received from issuance of
    common stock to Trust


1,693











1,693Net cash provided by financing
    activities


255,234











255,234Net decrease in cash and cash
    equivalents


(34,781
)


(238
)


(5
)


(35,024
)Cash and cash equivalents at
    beginning of year


37,512



261



5



37,778Cash and cash equivalents at end
    of year

$
2,731


$
23


$



$
2,754   (17)
    Commitments
    and Contingencies  Earn
    Out Commitments
           30




---



##### 



ALION SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
    Legal
    Proceedings
  Estate of Joseph Hudert vs. Alion Science and Technology
    Corporation; Estate of Frank Stotmeister vs. Alion Science and
    Technology Corporation.
           31




---



##### 



ALION SCIENCE AND TECHNOLOGY CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  Government
    Audits
    (18)
    Subsequent
    Events     32




---



##### 



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K
  Overview
    Three Months Ended


Nine Months EndedJune 30,


June 30,2007


2006


2007


2006(In millions)Revenue

$
184.9


$
116.8


$
554.0


$
329.3Net loss


(13.8
)


(8.2
)


(43.6
)


(16.9
)     For the Nine Months Ended June 30,Contract Type

2007


2006(In millions)Cost-reimbursement

$
367.7



66.4
%

$
199.5



60.6
%Fixed-price


102.5



18.5
%


65.6



19.9
%Time-and-material


83.8



15.1
%


64.2



19.5
%Total

$
554.0



100.0
%

$
329.3



100.0
%     For the Nine Months Ended June 30,Customer Type

2007


2006(In millions)U.S. Department of Defense (DoD)

$
505.5



91.3
%

$
287.9



87.4
%Other Federal Civilian Agencies


17.8



3.2
%


24.1



7.3
%Commercial / State / Local and
    International


30.7



5.5
%


17.3



5.3
%Total

$
554.0



100.0
%

$
329.3



100.0
%  33




---



##### 



Results
    of Operations
  Three
    Months Ended June 30, 2007 Compared to Three Months Ended
    June 30, 2006
    Three Months Ended


Three Months EndedJune 30, 2007


June 30, 2006Consolidated Operations of Alion


Consolidated Operations of Alion(Dollars in millions)%





%Financial Information




revenue





revenueTotal Revenue

$
184.9






$
116.8Material and subcontract revenue


80.2



43.4
%


34.5



29.5
%Total direct contract expenses


142.2



76.9
%


87.2



74.7
%Major components of direct
    contract expensesDirect labor expense


60.3



32.6
%


47.8



40.9
%Material and subcontract expense


76.6



41.4
%


33.0



28.3
%Other direct expense


5.2



2.8
%


6.4



5.5
%Gross profit


42.8



23.1
%


29.6



25.3
%Total operating expense


42.4



22.9
%


31.0



26.5
%Major components of operating
    expenseIndirect personnel and facilities


19.6



10.6
%


12.6



10.8
%General and administrative
    (excluding stock-based compensation)


13.6



7.4
%


11.8



10.1
%Stock-based compensation


3.4



1.8
%


3.3



2.8
%Depreciation and amortization


5.0



2.7
%


2.5



2.1
%Income (loss) from operations

$
0.3



0.2
%

$
(1.4
)


(1.2
)%   Revenues.
   Increase in revenue
    generated by the activities of the acquired operations

$
69.2 million Decrease in revenue
    generated by the activities of the non-acquired operations

$
(1.1) millionTotal:

$
68.1 million     Direct Contract Expenses.
 34




---



##### 




    Direct labor expense for the three months ended June 30,
    2007 increased $12.5 million, or 26.2%, over the three
    months ended June 30, 2006. Direct labor expense declined
    to 32.6% from 40.9% of total revenue for the three months ended
    June 30, 2007 and 2006, respectively. This decrease was due
    to the decrease in content of direct labor expense from acquired
    operations primarily related to WCI and for work provided in
    support of the Anteon contracts.
    M&S expense for the three months ended June 30, 2007
    increased $43.6 million, or 132.1%, over the three months
    ended June 30, 2006. M&S expense increased to 41.4%
    from 28.3% of total revenue for the three months ended
    June 30, 2007 and 2006, respectively. The percent increase
    in M&S expense was primarily due to the increase in content
    of M&S expense to total direct contract expense of the
    acquired operations, primarily related to WCI and for work
    provided in support of the Anteon contracts. M&S expense
    was approximately 95.5% and 95.7% of M&S revenue for the
    three months ended June 30, 2007 and 2006, respectively.    Gross Profit.
  Operating Expenses.
  
    Operating expenses for indirect personnel and rental and
    occupancy expenses for the three months ended June 30, 2007
    increased approximately $7.0 million, or 55.6%, over the
    three months ended June 30, 2006. The increase was
    primarily associated with additional indirect personnel and
    facilities expenses related to the activities in support of the
    contracts acquired from Anteon. The contracts from Anteon were
    acquired on June 30, 2006; therefore, there was no related
    activity for the three months ended June 30, 2006.
    Operating expenses for indirect personnel and facilities was
    10.6% and 10.8% of total revenue for the three months ended
    June 30, 2007 and 2006, respectively.
    General and administrative (G&A) expense, excluding
    stock-based compensation, for the three months ended
    June 30, 2007 increased approximately $1.8 million, or
    15.3%, over the three months ended June 30, 2006. G&A
    expenses were 7.4% and 10.1% of revenue for the three months
    ended June 30, 2007 and 2006, respectively. For the three
    months ended June 30, 2007, the Company incurred
    approximately $1.6 million of third-party legal and
    accounting fees associated with financing expense and
    approximately $0.4 million for third party legal expense
    for contract protests. These additional expenses represent
    approximately 1.1% of total revenue. For the three months ended
    June 30, 2006, the Company incurred approximately
    $2.0 million in third-party external accounting and legal
    fees related to acquisitions.
    Stock-based compensation expense (a separate element of G&A
    expense) relates to the SAR and phantom stock plans. This
    expense for the three months ended June 30, 2007 increased
    approximately $0.1 million, or 3.0%, from the three months
    ended June 30, 2006. The change in stock-based compensation
    expense results from the relative change in price of a share in
    Alion common stock and, to a lesser extent, the change in
    balance of awards that remain outstanding.
    Depreciation and amortization expense for the three months ended
    June 30, 2007 increased approximately $2.5 million, or
    100.0%, over the three months ended June 30, 2006.
    Depreciation expense primarily arises from fixed assets while
    amortization expense results primarily from purchased contracts.
    For the three 35




---



##### 



months ended June 30, 2007, approximately $2.0 million
    of amortization expense was associated with the contracts
    purchased from Anteon. Depreciation and amortization expense was
    2.7% and 2.1% of revenue for the three months ended
    June 30, 2007 and 2006, respectively.  Income (Loss) from Operations.
  Other Expense.
  Interest Expense.
  Three MonthsEndedJune 30,2007


2006(In millions)Revolving facility

$
0.6


$
0.4Senior term loan


4.6



4.1Bridge loan






0.1Senior unsecured note


6.6



Subordinated Note


0.6



1.0-long-term deferred interest


0.2



-amortization of debt issuance
    costs


0.3



Accretion of warrants(a)


1.1



1.2Other


0.3



0.2Total

$
14.3


$
7.0     (a)
    
    Reflects change in value assigned to the detachable warrants
    associated with the Subordinated Note based on the change in the
    value of Alion common stock and the number of warrants
    outstanding.  Income Tax Expense.
  Net Loss.
  Nine
    Months Ended June 30, 2007 Compared to Nine Months Ended
    June 30, 2006
  ,
  36




---



##### 



Nine Months Ended


Nine Months EndedJune 30, 2007


June 30, 2006Consolidated Operations of


Consolidated Operations ofAlion


Alion(Dollars in millions)%





%Financial Information




revenue





revenueTotal Revenue

$
554.0






$
329.3Material and subcontract revenue


230.0



41.5
%


100.7



30.6
%Total direct contract expenses


423.8



76.5
%


244.5



74.2
%Major components of direct
    contract expensesDirect labor expense


187.0



33.8
%


136.4



41.4
%Material and subcontract expense


221.3



39.9
%


96.5



29.3
%Other direct expense


15.5



2.8
%


11.6



3.5
%Gross profit


130.2



23.5
%


84.8



25.8
%Total operating expense


124.7



22.5
%


87.6



26.6
%Major components of operating
    expenseIndirect personnel and facilities


57.2



10.3
%


34.8



10.6
%General and administrative
    (excluding stock-based compensation)


38.6



7.0
%


32.9



10.0
%Stock-based compensation (included
    in G&A expense)


9.9



1.8
%


8.3



2.5
%Depreciation and amortization


16.3



2.9
%


9.7



2.9
%Income (loss) from operations


5.5



1.0
%

$
(2.8
)


(0.9
)%   Revenues.
   Increase in revenue
    generated by the activities of the acquired operations

$
222.9 million Increase in revenue
    generated by the activities of the non-acquired operations

$
1.8 millionTotal:

$
224.7 million     Direct Contract Expenses.
  
    Direct labor expense for the nine months ended June 30,
    2007 increased $50.6 million, or 37.1%, over the nine
    months ended June 30, 2006. Direct labor expense declined
    to 33.8% from 41.4% of total revenue for the nine months ended
    June 30, 2007 and 2006, respectively. This decrease was due
    to the decrease in content of direct labor expense from acquired
    operations primarily related to WCI and for work provided in
    support of the Anteon contracts.
    M&S expense for the nine months ended June 30, 2007
    increased $124.8 million, or 129.3%, over the nine months
    ended June 30, 2006. M&S expense increased to 39.9%
    from 29.3% of total revenue for the nine months ended
    June 30, 2007 and 2006, respectively. The percent increase
    in M&S expense was primarily 37




---



##### 



due to the increase in content of M&S expense to total
    direct contract expense of the acquired operations, primarily
    related to WCI and for work provided in support of the Anteon
    contracts. M&S expense was approximately 96.2% and 95.8% of
    M&S revenue for the nine months ended June 30, 2007
    and 2006, respectively.    Gross Profit.
  Operating Expenses.
  
    Operating expenses for indirect personnel and rental and
    occupancy expenses for the nine months ended June 30, 2007
    increased approximately $22.4 million, or 64.4%, over the
    nine months ended June 30, 2006. The increase was primarily
    associated with additional indirect personnel and facilities
    expenses related to the activities in support of the contracts
    acquired from Anteon. The contracts from Anteon were acquired on
    June 30, 2006; therefore, there was no related activity for
    the nine months ended June 30, 2006. Operating expenses for
    indirect personnel and facilities were 10.3% and 10.6% of total
    revenue for the nine months ended June 30, 2007 and 2006,
    respectively.
    General and administrative (G&A) expense, excluding
    stock-based compensation, for the nine months ended
    June 30, 2007 increased approximately $5.7 million, or
    17.3%, over the nine months ended June 30, 2006. G&A
    expenses were 7.0% and 10.0% of revenue for the nine months
    ended June 30, 2007 and 2006, respectively. For the nine
    months ended June 30, 2007, the Company incurred expenses
    of approximately $5.9 million for third-party legal and
    accounting fees associated with financing expense and
    approximately $1.5 million for third party legal expense
    for contract protests. These additional expenses represent
    approximately 1.3% of total revenue. For the nine months ended
    June 30, 2006, the Company incurred expenses of
    approximately $1.3 million for external accounting and
    legal fees associated with the completion of an investigation
    relating to an anonymous letter received by the Company shortly
    before the deadline for filing the Annual Report. The anonymous
    letter alleged, among other things, that on one of the
    Companys business units had engaged in illegal activities
    with respect to certain of its business operations. The
    independent investigators concluded that there was no material
    basis for the allegations. Approximately $1.0 million was
    incurred for legal and accounting fees associated with
    acquisitions. These additional expenses represented
    approximately 0.7% of total revenue.
    Stock-based compensation expense (a separate element in G&A
    expense) relates to the SAR and phantom stock plans. This
    expense for the nine months ended June 30, 2007 increased
    approximately $1.6 million, or 19.3%, over the nine months
    ended June 30, 2006. The increase in stock-based
    compensation expense results from the relative change in price
    of a share in Alion common stock and, to a lesser extent, the
    increase in the awards granted.
    Depreciation and amortization expense for the nine months ended
    June 30, 2007 increased approximately $6.6 million, or
    68.0%, over the nine months ended June 30, 2006.
    Depreciation expense primarily arises from fixed assets while
    amortization expense results primarily from purchased contracts.
    Depreciation and amortization expense was 2.9% of revenue for
    the nine months ended June 30, 2007 and 2006, respectively.  Income loss) from
    Operations.
 38




---



##### 



Other Expense.
  Interest Expense. f
  Nine Months EndedJune 30,2007


2006(In millions)Revolving facility

$
1.9


$
0.7Senior term loan


16.6



9.4Bridge loan


6.8



0.1Senior unsecured note


10.6



Subordinated Note


1.9



1.8-long-term deferred interest


0.7



0.5-amortization of debt issuance
    costs


0.7



0.7Accretion of warrants(a)


3.4



1.5Other


0.7



0.2Total

$
43.3


$
14.9     (a)
    
    Reflects change in value assigned to the detachable warrants
    associated with the Subordinated Note and/or the Mezzanine Note
    based on the change in the value of Alion common stock and the
    number of warrants outstanding; the warrants associated with the
    Mezzanine Note were redeemed in March 28, 2006.  Loss on extinguishment of debt.
  Income Tax (Expense) Benefit.
  Net Loss.
  Liquidity
    and Capital Resources
       39




---



##### 



Discussion
    of Debt Structure
  Term
    B Senior Credit Facility
    
    a senior term loan in the approximate amount of
    $221.1 million;
    a $50.0 million senior revolving credit facility under
    which approximately $25.3 million was outstanding as of
    June 30, 2007, and approximately $3.7 million of which
    was allocated for letters of credit and as such is not available
    to be borrowed; and
    a $135.0 million uncommitted incremental term loan
    accordion facility.      
    In April 2005, the first amendment to the Term B Senior Credit
    Facility (Amendment One) made certain changes to the Term B
    Senior Credit Facility and added $72.0 million in term
    loans to the Companys total Term B Senior Credit Facility
    debt.
    In March 2006, the second amendment to the Term B Senior Credit
    Facility (Amendment Two) made certain changes to the Term B
    Senior Credit Facility and increased the term loan commitment by
    $68.0 million, of which the full $68.0 million had
    been drawn down by the Company as of June 30, 2007, and
    increased the revolving credit commitment from
    $30.0 million to $50.0 million. 40




---



##### 




    On June 30, 2006, the third amendment to the Term B Senior
    Credit Facility (Amendment Three) made certain changes to the
    Term B Senior Credit Facility and added $50.0 million in
    term loans to the Companys total Term B Senior Credit
    Facility debt.
    On January 4, 2007, the fourth increment to the Term B
    Senior Credit Facility (Increment Four) added $15.0 million
    in term loans to the Companys total Term B Senior Credit
    Facility debt.
    On February 6, 2007, the fourth amendment to the Term B
    Senior Credit Facility (Amendment four) made certain changes to
    the Term B Senior Credit Facility, including (i) extending
    the maturity date of the senior term loans to February 6,
    2013, (ii) adjusting the principal repayment schedule to
    require one balloon principal repayment at maturity, and
    (iii) adding an incurrence test as an additional condition
    to the Companys ability to incur permitted indebtedness.
    On July 17, 2007, the Company entered into a fifth
    incremental term loan facility (Increment Five), which added
    $25.0 million in term loans to the Term B Senior Credit
    Facility.    Use of Proceeds.
  Interest and Fees.
  41




---



##### 



Eurodollar


Federal Funds


Prime RateSpread


ABR Spread


ABR SpreadLeverage Ratio

(in basis points)


(in basis points)


(in basis points)Category 1


275



225



175Greater than or equal to 3.00 to
    1.00Category 2


250



200



150Greater than or equal to 2.50 to
    1.00
    but less than 3.00 to 1.00Category 3


225



175



125Greater than or equal to 2.00 to
    1.00
    but less than 2.50 to 1.00Category 4


200



150



100Less than 2.00 to 1.00     Other Fees and Expenses.
  Financial Covenants. Form 10-Q
     42




---



##### 




    Consolidated EBITDA does not reflect the Companys cash
    expenditures, or future requirements for capital expenditures or
    contractual commitments;
    Consolidated EBITDA does not reflect changes in, or cash
    requirements for, the Companys working capital needs;
    Consolidated EBITDA does not reflect interest expense, or the
    cash requirements necessary to service interest or principal
    payments, on the Companys debt; and
    Although depreciation and amortization are non-cash charges, the
    assets being depreciated and amortized will often have to be
    replaced in the future, and Consolidated EBITDA does not reflect
    any cash requirements for such replacements.    Non-GAAP Measures 
    EBITDA and Consolidated EBITDA
    For the Twelve Months Ended June 30, 2007 and
    2006
  Calculation of EBITDA

2007


2006(Dollars in thousands)Net loss

$
(57,806
)

$
(23,087
)Plus: Interest expense


58,115



21,308Plus: Income tax expense (benefit)


(11
)


41Plus: Depreciation and
    amortization expense


23,126



14,787EBITDA

$
23,424


$
13,049   Calculation of Consolidated EBITDA

2007


2006(Dollars in thousands)EBITDA

$
23,424


$
13,049Plus: Cash contributions to ESOP
    in respect of the repurchase liability






2,380Plus: Non-cash expenses with
    respect to the stock appreciation rights and phantom stock plans
    (Stock-based compensation less cash settlements)*


12,315



11,307Plus: Non-cash contributions to
    the ESOP (including Company
    401-k match)*


10,062



7,311Plus: Loss on extinguishment of
    debt


6,170



Plus: Adjustments permitted by
    certain covenants in the Term B Senior Credit Facility


20,393



9,462Consolidated EBITDA

$
72,364


$
43,509  43




---



##### 



*
    
    Non-cash expenses with respect to the stock appreciation rights
    and phantom stock plans and non-cash contributions to the ESOP
    constitute all the non-cash charges and expenses that are
    included in the calculation of Consolidated EBITDA.  Leverage Ratio.
  Period

RatioJune 30, 2006 through
    September 30, 2007


6.50 to 1.00October 1, 2007 through
    June 30, 2008


6.00 to 1.00July 1, 2008 through
    June 30, 2009


5.75 to 1.00Thereafter


5.25 to 1.00     Computation
    of Leverage Ratio
    Under the Term B Senior Credit Facility
    For the Twelve Months Ended June 30, 2006
  2006(Dollars in thousands)Numerator:Revolving credit facility

$
5,975Term B Senior Credit facility debt
    outstanding, at face value


259,670Bridge loan


170,000Total debt outstanding

$
435,645Denominator:Consolidated EBITDA

$
43,509Plus: Permitted covenant
    adjustments


25,074Consolidated EBITDA with pro forma
    effect of acquisitions

$
68,583Leverage ratio:


6.35     Period

RatioFebruary 6, 2007 through
    September 30, 2007


4.00 to 1.00October 1, 2007 through
    September 30, 2008


3.75 to 1.00October 1, 2008 through
    September 30, 2009


3.25 to 1.00Thereafter


3.00 to 1.00  44




---



##### 



Computation
    of Senior Secured Leverage Ratio
    Under the Term B Senior Credit Facility
    For the Twelve Months Ended June 30, 2007
  2007(Dollars in thousands)Numerator:Revolving credit facility

$
25,300Term B Senior Credit facility debt
    outstanding, at face value


221,121Total debt outstanding

$
246,421Denominator:Consolidated EBITDA


72,364Plus: Permitted covenant
    adjustments


Consolidated EBITDA with pro forma
    effect of acquisitions


72,364Leverage ratio:


3.41   Interest Coverage Ratio.
  Period

RatioJune 30, 2006 through
    September 30, 2007


1.65 to 1.00October 1, 2007 through
    September 30, 2008


1.75 to 1.00Thereafter


2.00 to 1.00     Computation
    of Interest Coverage Ratio
    Under the Term B Senior Credit Facility
    For the Twelve Months Ended June 30, 2006
  2006(Dollars in thousands)Numerator:Consolidated EBITDA

$
43,509Plus: Permitted covenant
    adjustments


25,074Consolidated EBITDA with pro forma
    effect of acquisitions


68,583Less: Capital expenditures


4,968Consolidated EBITDA with pro forma
    effect of acquisitions less capital expenditures

$
63,615   45




---



##### 



2006(Dollars in thousands)Denominator:Consolidated interest expense

$
11,059Interest coverage ratio


5.75       Computation
    of Interest Coverage Ratio
    Under the Term B Senior Credit Facility
    For the Twelve Months Ended June 30, 2007
  2007(Dollars in thousands)Numerator:Consolidated EBITDA

$
72,364Plus: Permitted covenant
    adjustments


Consolidated EBITDA with pro forma
    effect of acquisitions


72,364Less: Capital expenditures


7,227Consolidated EBITDA with pro forma
    effect of acquisitions less capital expenditures


65,137   2007(Dollars in thousands)Denominator:Consolidated interest expense

$
30,525Interest coverage ratio


2.13     Bridge
    Loan Agreement
    Subordinated
    Note
     46




---



##### 



paid-in-kind
  Senior
    Unsecured Notes
    Use of Proceeds.
  Exchange Offer; Registration Rights.
  Security.
  Ranking.
  Interest and Fees.
  Optional Redemption.
     47




---



##### 



12-month
  Period

Redemption Price2011


105.125
%2012


102.563
%2013 and thereafter


100.000
%   Covenants.
  
    incur or guarantee additional indebtedness;
    pay dividends on capital stock or redeem, repurchase or retire
    capital stock or subordinated indebtedness, except in certain
    circumstances for the junior subordinated notes and junior
    warrants;
    repurchase or redeem shares of Company stock in connection with
    distributions and diversifications from the ESOP component of
    the KSOP;
    transfer or sell assets including shares of stock of certain
    subsidiaries of the Company outside the ordinary course of
    business;
    make investments other than certain permitted investments;
    engage in business unrelated to the Companys existing
    business;
    incur certain liens and enter into sale/leaseback transactions;
    enter into certain transactions with affiliates;
    pay dividends and make their distributions and loans to the
    Company; and
    merge or consolidate with other companies.  Events of Default.
  
    payment default;
    uncured covenant breaches;
    default under an acceleration of certain other debt exceeding
    $30 million;
    certain bankruptcy and insolvency events;
    a judgment for payment in excess of $30 million entered
    against the Company or any material subsidiary that remains
    outstanding for a period of 60 days and is not discharged,
    waived or stayed; and
    failure of any guarantee of the Senior Unsecured Notes to be in
    effect or the denial or disaffirmation by any subsidiary
    guarantor of its guaranty obligations.  Change of Control.
  
    subject to certain exceptions, a person, other than the ESOP
    Trust, is or becomes the beneficial owner, directly or
    indirectly, of more than 35% of the total voting power or voting
    stock of the Company;
    individuals who on the date of issuance of the Senior Unsecured
    Notes constituted the board of directors of the Company, cease
    for any reason to constitute a majority of the board of
    directors of the Company;
    the adoption of a plan relating to the liquidation or
    dissolution of the Company; and 48




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##### 




    subject to certain exceptions, the merger or consolidation of
    the Company with or into another person or the merger of another
    person with or into the Company, or the sale of all or
    substantially all the assets of the Company to another person.    6-Fiscal Year Period2007*


2008


2009


2010


2011


2012


Thereafter($ In thousands)Bank revolving credit facility- Interest(1)

$
289


$
250


$
250


$
250


$
250


$
250


$
750Senior Term Loan- Interest(2)


4,745



19,213



19,399



19,589



19,635



19,529



6,849- Principal(3)


618



2,474



2,474



2,474



2,474



2,474



233,134Senior Unsecured Notes- Interest


12,314



25,625



25,625



25,625



25,625



25,625



64,063- Principal


























250,000Subordinated Note- Interest










6,384



3,192











- Principal










27,352



27,352











Total cash  Pay interest


17,348



45,088



51,658



48,656



45,510



45,404



71,662Total cash  Pay
    principal


618



2,474



29,826



29,826



2,474



2,474



483,134Total

$
17,966


$
47,562


$
81,484


$
78,482


$
47,984


$
47,878


$
554,796     *
    
    Estimated interest and principal payments for the remainder of
    fiscal year 2007.(1)
    
    The Company anticipates accessing, from time to time, its
    $50.0 million revolving credit facility to finance the
    Companys ongoing working capital needs. The remaining term
    of the revolving credit facility is approximately two years;
    however, the Company expects to access a revolving credit
    facility as an on-going requirement to fund working capital at
    least through 2012. For the remainder of fiscal year 2007, the
    average balance drawn on the Companys then revolving
    credit facility is projected to be approximately
    $2.0 million. For the fiscal years 2008 through 2012, the
    Company anticipates the balance drawn on its then revolving
    credit facility will be minimal. Interest expense value includes
    an estimate for the unused balance fee on the $50.0 million
    revolving credit facility.(2)
    
    The projected average annual senior term loan balance the
    Company estimates will be drawn under the Term B Senior Credit
    Facility is as follows: $245.5 million,
    $244.3 million, $241.8 million, $239.3 million,
    $236.8 million, and $234.4 million for the remainder
    of fiscal year 2007 and for fiscal years ending
    September 30, 2008 through 2012, respectively. The Company
    expects it will need to refinance the Term B Senior term loan
    before the end of fiscal year 2012 and expects interest expense
    to continue at levels similar to prior years. Based on an
    estimated LIBOR rate plus the Credit Suisse Eurodollar spread,
    the effective annual interest rate for the remainder of fiscal
    year 2007, and for fiscal years ending September 30, 2008
    through 2012 is estimated to be approximately 7.7%, 7.9%, 8.0%,
    8.2%, 8.3%, and 8.3%, respectively. The effective interest rate
    takes into account the interest rate cap agreements which limit
    the interest rate on a portion, but not all, of the outstanding
    principal balance of the Term B Senior Credit Facility through
    September 2007. Outstanding principal balances not under the cap
    agreements had interest based on the Eurodollar rate. The senior
    term loan matures February 6, 2013. Estimated interest
    expense includes an estimate for the commitment fee on the
    senior term loan. 49




---



##### 



(3)
    
    The Term B Senior Credit Facility requires the Company to repay
    approximately 1.0 percent of the principal balance
    outstanding under the senior term loan annually. Approximately
    6.0% of the principal will be paid during fiscal years 2007
    through 2012 and the first quarter of fiscal year 2013 and the
    remaining principal balance will be repaid on February 6,
    2013, the senior term loan maturity date. The table reflects the
    balance drawn of $221.1 million as of June 30, 2007,
    plus the $25 million in additional term loans drawn under
    the Term B Senior Credit Facility on July 17, 2007,
    resulting in expected aggregate annual principal payments of
    approximately $0.6 million for the remainder of fiscal year
    2007, approximately $2.5 million in each of fiscal years
    2008 through 2012, approximately $0.6 million for the first
    quarter of fiscal year 2013, and the remaining principal balance
    of approximately $232.5 million on February 6, 2013.
    The Term B Senior Credit Facility also requires the Company to
    make mandatory prepayments of principal if the Company generates
    certain excess cash flow in a given fiscal year, issues or
    incurs certain debt or sells certain assets. As of June 30,
    2007, no mandatory prepayments are due.  Other
    Obligations
  Earn
    outs
            Lease
    Payments
    Other
    contingent obligations which will impact the Companys
    cash
    
    Obligations related to the holders put rights associated
    with the Subordinated Note warrants;
    Obligations relating to the Companys stock based
    compensation plans; and
    Repurchase obligations under the KSOP.    50




---



##### 



Number ofShares





Total ValueDate

Repurchased


Share Price


Purchased(In thousands)June 2003


5,248


$
11.13


$
58July 2003


2,696


$
11.13



30December 2003


50,031


$
14.71



736May 2004


117


$
16.56



2June 2004


727


$
16.56



12June 2004


743


$
16.56



12July 2004


48,309


$
16.56



800December 2004


46,816


$
19.94



934March 2005


5,691


$
19.94



113June 2005


45,846


$
29.81



1,367August 2005


1,090


$
33.78



37September 2005


170,657


$
33.78



5,765December 2005


211,537


$
35.89



7,592June 2006


273,800


$
37.06



10,147July 2006


32,420


$
37.06



1,201August 2006


1,695


$
37.06



63December 2006


2,243


$
41.02



92January 2007


14


$
41.02



1February 2007


160,020


$
41.02



6,564March 2007


73


$
41.02



3May 2007


238


$
43.37



10June 2007


(2,549
)

$
40.88



(104
)Total









$
35,435        51




---



##### 



Contract
    performance  Joint Spectrum Center
    Contract
    Recent
    Accounting Pronouncements
  Fair Value Measurements
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  Forward
    Looking Statements
      
    changes to the ERISA laws related to the Alion Science and
    Technology Corporation Employee Ownership, Savings and
    Investment Plan;
    changes to the tax laws relating to the treatment and
    deductibility of goodwill, the Companys subchapter S
    status, or any change in the Companys effective tax rate;
    additional costs associated with compliance with provisions of
    the Sarbanes-Oxley Act of 2002, including any changes in the
    SECs rules, and other corporate governance requirements;
    failure of government customers to exercise options under
    contracts;
    funding decisions relating to U.S. Government projects;
    government contract procurement (such as bid protest) and
    termination risks;
    competitive factors such as pricing pressures
    and/or
    competition to hire and retain employees; 52




---



##### 




    the results of current
    and/or
    future legal proceedings and government agency proceedings which
    may arise out of our operations (including our contracts with
    government agencies) and the attendant risks of fines,
    liabilities, penalties, suspension
    and/or
    debarment;
    undertaking acquisitions that could increase our costs or
    liabilities or be disruptive;
    taking on additional debt to fund acquisitions;
    failure to adequately integrate acquired businesses;
    material changes in laws or regulations applicable to the
    Companys businesses;
    as well as other risk factors discussed in the Companys
    annual report on
    Form 10-K
    for the year ended September 30, 2006 filed with the SEC on
    December 1, 2006.    Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk          Foreign
    currency risk
    Risk
    associated with the value of Alion common stock
   53




---



##### 



Item 4.
    Controls
    and Procedures  Disclosure Controls and
    Procedures. Rule 15d-15(e)
  Internal Control Over Financial
    Reporting. Rule 15d-15(f)
  Item 4T.
    Controls
    and Procedures   54




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##### 



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings      Item 1A.
    Risk
    Factors    Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds  Form 8-K.
  Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Item 5.
    Other
    Information    Item 6.
    Exhibits  Exhibit No.

Description10
.85

Employment Agreement between Alion
    Science and Technology Corporation and Dr. Bahman Atefi. (1)31
.1

Certification of Chief Executive
    Officer of Alion Science and Technology Corporation pursuant to
    Rule 15d-14(a) promulgated under the Securities Exchange Act of
    1934, as amended.31
.2

Certification of Chief Financial
    Officer of Alion Science and Technology Corporation pursuant to
    15d-14(a)
    promulgated under the Securities Exchange Act of 1934, as
    amended.32
.1

Certification of Chief Executive
    Officer of Alion Science and Technology Corporation, 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 of Alion Science and Technology Corporation, pursuant to
    18 U.S.C. Section 1350 as adopted pursuant to Section 906
    of the Sarbanes-Oxley Act of 2002.     (1)
    
    Incorporated by reference to the corresponding exhibit
    previously filed as an exhibit to the Companys
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 21, 2007. 55




---



##### 



SIGNATURES
      John
    M. Hughes
   Title:
    Chief Financial Officer     56