Professional services firms that understand the strategic context of defense transformation and the U.S. Department of Defense’s, or DoD’s, mission objectives while providing a wide range of services, such as policy analysis, information technology-enabled solutions and outsourced implementations, should see increased demand for their services. The need for rapid deployment and management of armed forces anywhere around the globe requires concept, policy and technology innovation in the fields of logistics management, operational support, and command and control. Demand is increasing to support military organizations and program offices as senior civilians retire and military personnel remain focused on war-fighting efforts.

Significant factors affecting suppliers, users and regulators of energy are driving private sector demand for professional services firms with expertise in this market. According to the International Energy Agency, world energy demand is expected to grow by 50% from 2004 to 2030. As a result, the global energy industry has estimated that approximately $17 trillion in capital will be required from 2004 to 2030 to build sufficient energy infrastructure to meet the increased demand. At the same time, oil and gas supplies have become increasingly constrained, partly due to the need to source from politically sensitive or physically challenging regions. Moreover, most industrialized countries are undergoing deregulation of electric and gas utilities in order to stimulate competition at the generation, transmission and retail levels. These factors, together with the continual search for alternative fuels, are driving profound and long-term restructuring in the energy industry.

A confluence of long-term factors is expected to drive an increased need for public spending on health, human services and social programs, despite budgetary pressures. U.S. Social Security and Medicare trustees project a major rise in the percentage of the population age 65 and older from 12% today to 18% in 2025, placing significant burdens on a variety of public programs. Other major factors adding to pressure for more program support include continued immigration, increased military personnel returning home with health and social service needs, increased population growth at the lowest income levels, and the rising cost of healthcare. In addition, demand is growing for professional services that plan for and respond to the health and social consequences of threats from terrorism, natural disasters and epidemics.

The Company supports DoD by providing high-end strategic planning, analysis and technology solutions in the areas of logistics management, operational support and command and control. The Company also provides strong capabilities to the defense sector in environmental management, human capital assessment, military community research and technology-enabled solutions.

In the area of homeland security, the Company provides services to federal, state and local government clients to prevent, prepare for, respond to and recover from natural disasters, technological failures and terrorist attacks. The Company is a national leader in critical infrastructure protection and is currently leading two efforts for DHS’s Preparedness Directorate in its Infrastructure Protection Division.

The Company assists energy enterprises and energy consumers worldwide in their efforts to develop, analyze and implement strategies related to their business operations and the interrelationships of those operations with the environment and applicable government regulations. The Company’s clients include integrated energy enterprises, power developers, regulated electricity transmission and distribution companies, unregulated enterprises, municipal power authorities, energy traders and marketers, oil and gas exploration and production companies, gas transmission companies, pipeline developers, local distribution companies, industry associations, investors, financial institutions, law firms and regulators in the United States and throughout the Americas, Europe and Asia.

The Company provides research, consulting, implementation and improvement services that help government, industry and other stakeholders develop and manage effective programs in the areas of health and human services at the national, regional and local levels.

In addition to providing advisory and research services at the front end of government programs, the Company also conducts evaluations and implement program enhancements.

Direct costs for the six months ended June 30, 2006 were $66.5 million, or 60.6% of revenue, compared to $49.4 million, or 59.4% of revenue, for the six months ended July 1, 2005.

Indirect and selling expenses for the six months ended June 30, 2006 were $39.9 million, or 36.4% of revenue, compared to $27.5 million, or 33.0%, for the six months ended July 1, 2005.

For the six months ended June 30, 2006, earnings from operations were $1.6 million, or 1.5% of revenue, compared to $4.7 million, or 5.6%, for the six months ended July 1, 2005.

For the six months ended June 30, 2006, interest expense was $2.2 million, compared to $1.2 million for the six months ended July 1, 2005.