UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Preliminary Proxy Statement
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Confidential, for Use of the Commission
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12
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SM&A
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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by registration statement number, or the Form or Schedule and the
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Form, Schedule or Registration Statement No.:
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Date Filed:
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This filing contains the following materials:
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Letter to Stockholders dated May 6, 2008 from Cathy L. McCarthy, Chief Executive Officer,
SM&A, filed herewith.
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Letter to Stockholders dated May 6, 2008 from Dwight L. Hanger, Chairman of the Board, filed
herewith.
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Open Letter to SM&A Stockholders filed by SM&A on Schedule 14A and Form 8-K on May 2, 2008.
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Presentation by SM&A filed on Schedule 14A and Form 8-K on May 2, 2008.
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Press Release filed by SM&A on Schedule 14A and as Exhibit 99.1 to Form 8-K on April 28,
2008.
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WHY YOU SHOULD VOTE AGAINST
THE MYERS SLATE
May 6, 2008
To Our Stockholders:
As you know, our annual meeting is rapidly approaching and at that meeting you will be asked
to make a very important decision with respect to your Board of Directors. We are providing you
today with some important information and ask that you take time to read the enclosed documents,
which we feel address most, if not all, of the major issues you should take into consideration.
The three documents were all filed with the SEC, and I recognize that you may already have them,
but thought a color copy of the presentation would be helpful. The package includes: a press
release we issued on April 28, an open letter to shareholders issued on May 2 and the presentation
we used at ISS and PROXY Governance that was filed on May 2.
You may have already received information in the mail soliciting your vote from Steven Myers,
SM&As
former CEO
. As you may recall, Myers was forced to retire in March 2007 when your
board decided not to renew his contract because a change in leadership was necessary. Accordingly,
Myers is no longer an officer or director of your company.
Now, Myers wants you to put him back on the companys board with no long-term plan, no
coherent strategy and offering stockholders nothing more than his short-term personal agenda.
He is
seeking to replace four highly qualified, dedicated, and independent directors with a hand-picked
slate that includes Myers himself and three of his friends. We believe this self-serving de facto
takeover attempt is NOT in the best interest of all shareholders and would disrupt the current
Boards ongoing efforts to correct problems that started under Myers watch.
We urge you to sign and return the WHITE card. DO NOT RETURN THE MYERS GOLD CARD.
If you have already returned Myers gold card, you have every right to change your mind by
executing the WHITE card since it is only the latest dated proxy that counts. We look forward to
seeing you soon and discussing this more in person, as we are trying to get out to see all of our
key shareholders and hope to fit into your schedule over the next three weeks.
Sincerely,
Cathy L McCarthy
Chief Executive Officer
YOUR VOTE IS IMPORTANT
VOTE THE WHITE PROXY CARD TODAY
The Stockholder meeting will be on Friday, May 23, 2008 with stockholders of record as of
April 9, 2008 eligible to vote.
We urge you sign, date and return the enclosed WHITE Proxy Card today
or vote by telephone or internet.
If you have any questions or need assistance in voting, contact
MacKenzie Partners, Inc.
Toll-Free: (800) 322-2885
winsproxy@mackenziepartners.com
Please ignore any gold proxy cards sent to you by Myers and do not sign them.
WHY YOU SHOULD VOTE AGAINST
THE MYERS SLATE
May 6, 2008
To Our Stockholders:
As you know, our annual meeting is rapidly approaching and at that meeting you will be asked
to make a very important decision with respect to your Board of Directors. We are providing you
today with some important information and ask that you take time to read the enclosed documents,
which we feel address most, if not all, of the major issues you should take into consideration.
The two documents were both published in press releases and are: a press release we issued on April
28 and an open letter to shareholders issued on May 2.
You may have already received information in the mail soliciting your vote from Steven Myers,
SM&As
former CEO
. As you may recall, Myers was forced to retire in March 2007 when your
board decided not to renew his contract because a change in leadership was necessary. Accordingly,
Myers is no longer an officer or director of your company.
Now, Myers wants you to put him back on the companys board with no long-term plan, no
coherent strategy and offering stockholders nothing more than his short-term personal agenda.
He is
seeking to replace four highly qualified, dedicated, and independent directors with a hand-picked
slate that includes Myers himself and three of his friends. We believe this self-serving de facto
takeover attempt is NOT in the best interest of all shareholders and would disrupt the current
Boards ongoing efforts to correct problems that started under Myers watch.
We urge you to sign and return the WHITE card. DO NOT RETURN THE MYERS GOLD CARD.
If you have already returned Myers gold card, you have every right to change your mind by
executing the WHITE card since it is only the latest dated proxy that counts.
Sincerely,
Dwight L. Hanger
Chairman of the Board
YOUR VOTE IS IMPORTANT VOTE
THE WHITE PROXY CARD TODAY
The Stockholder meeting will be on Friday, May 23, 2008 with stockholders of record as of
April 9, 2008 eligible to vote.
If you have any questions or need assistance in voting, contact
MacKenzie Partners, Inc.
Toll-Free: (800) 322-2885
winsproxy@mackenziepartners.com
Please discard any gold proxy cards sent to you by Myers.
We urge you sign, date and return the enclosed WHITE Proxy Card today or vote by telephone
or internet.
About SM&A
SM&A is the worlds foremost management consulting firm providing leadership and mentoring
solutions to PLAN for business capture, WIN competitive procurements and profitably PERFORM on the
projects and programs won. Our proven processes, people and tools have delivered significant
top-line and bottom-line growth across markets, products and services. From the largest aerospace
and defense contractors, through the major software providers, to healthcare and financial/audit
service providers, SM&A is the partner many companies turn to WHEN THEY MUST WIN.
All stockholders of SM&A are advised to read the definitive proxy statement and other documents
related to the solicitation of proxies by SM&A for use at the 2008 annual meeting of stockholders
of SM&A. They contain important information regarding the election of directors and other matters.
The definitive proxy statement and form of proxy have been mailed to stockholders of record of
SM&A along with other relevant documents. They are available at no charge on the SECs website at
http://www.sec.gov
In addition, SM&A will provide copies of the definitive proxy statement without
charge upon request.
Some statements made in this news release refer to future actions, strategies, or results that
involve a number of risks and uncertainties. Any number of factors could cause actual results to
differ materially from expectations, including a shift in demand for SM&As Competition Management
and Program services; fluctuations in the size, timing, and duration of client engagements; delays,
cancellations, or shifts in emphasis for competitive procurement activities; declines in future
defense, information technology, homeland security, new systems, and research and development
expenditures, and other risk factors listed in SM&As SEC reports, including the report on Form
10-K for the year ended December 31, 2007. Actual results may differ materially from those
expressed or implied. The company does not undertake any duty to update forward-looking statements.
Open Letter to SM&A Stockholders
on Preserving Good Corporate Governance
Shareholders Urged to Re-Elect Companys Nominees
May 2,
2008
Dear Fellow Stockholders:
As you consider the upcoming May 23 shareholder vote, we thought it would be helpful to give
you some perspective on the philosophy and objectives of your Board.
Our Board has an unwavering commitment to continue to enhance our governance practices and
policies to ensure the best and most comprehensive stockholder representation at the Board level,
and we embrace this critical objective so prevalent in corporate America today. Our stockholders
rightfully demand superior representation of their interests. That includes having truly
independent directors, highly qualified audit, compensation and corporate governance committees,
open disclosure of policies, linking pay to performance and a myriad of other sound practices that
ensure the best and most unbiased oversight and stewardship at the top.
In addition, through board education programs, we ensure that our Board members are current
with the requisite best practice policies and have the experience and knowledge to provide
oversight that results in sound and robust policies and processes. It is with this backdrop that we
urge you to support our nominees and to reject the dissident slate. Let me be clear: We are not at
all opposed to giving serious consideration to qualified candidates who have the experience,
business acumen or expertise that may be able to add value to SM&A. In this case, however, we are
hard pressed to identify any such attributes.
When it comes to our leadership team, we impose high standards and are demanding of each
member from our fellow directors to the CEO and others down the line. We have always held them
accountable for the rise and fall of the business, and will continue to do so. We expect quality
performance and acceptable returns for our stockholders, and are willing to make changes when
necessary and appropriate; which we have recently demonstrated. Today, unlike in the past, a
modicum of business knowledge and experience, coupled with a casual association with the CEO, is
grossly inadequate to fulfill the increasing demands of directors and committee chairs of public
companies. We believe when you analyze the four Myers nominees, you will also conclude that they
simply cannot fill the shoes of your current Board members.
The current slate of nominees your Board is recommending you re-elect not only understands the
demands and requirements of stockholder representation but also has the experience and have
demonstrated their commitment to insuring ALL stockholders are fully represented
Former CEO Steven Myers wants to replace them with himself and his hand-picked slate made up
of Kenneth Colbaugh, Albert Nagy and Redge Bendheim.
Lets be clear: this is a transparent, de
facto takeover attempt by four friends, whose ties to each other will make them anything but
independent and whose experience and track record in guiding a public company through the demands
expected by our stockholders today is severely limited and unacceptable to the remaining Board
members and Company leadership.
For the last nine months our Board has worked with our new management team to address the
problems of the past and at the same time build for the future. We firmly believe we have
positioned the Company for revenue growth through the strategies we are implementing and believe we
have a sound operating plan currently in place, which has already resulted in increasing earnings
from our operations, before non-operational charges.
Much of the credit goes to four highly qualified, independent and independent-thinking
directorsWilliam Bowes, Joseph Reagan, Robert Untracht and John Senbitwho are all dedicated not
only to the very best in corporate governance, but to tirelessly watching out for your interests as
stockholders.
Since Myers and his slate are running on their record of the past, we believe it is only fair
that you have a chance to evaluate them with the information below. As we have repeatedly stated,
we are confident that when you review their records that you will agree that our path to the future
does not involve a detour into the past.
Steven Myers
Myers would have you believe that he can do a better job managing the finances of SM&A than
current management, but ask yourself how can he say that when history shows otherwise?
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With one of his current nominees as chairman of the compensation committee, Myers
earned annual compensation of $1 million that was criticized by industry observers as
disproportionate and excessive. According to a report by Sidoti & Co., Mr. Myers, as CEO
of one of the smallest companies in our IT Services covered universe, was paid more than
almost every other CEO in the group.
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During the period in which he headed SM&A as a public company, Myers spent nearly $1.1
million of shareholder money so he could travel on private jets provided by an aviation
company in which he was the owner
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While Myers professes to be interested in the Companys long-term value and touts his
stock holdings, he continues to dispose of shares even in a down market and at low prices.
He appears to
be a short-term player who is selling, not buying.
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Myers idea of efficient cash deployment apparently includes four failed acquisitions,
$90 million in losses and a public company which was de-listed after 36 months of the
initial public offering. SM&As record during his tenure does not demonstrate effective
cost management.
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Myers track record clearly demonstrates a continual loss of talent and intellectual
property during his leadership which has directly resulted in the development of at least
five competing firms today.
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Kenneth Colbaugh
Myers would have you believe Colbaugh and other members of his slate provide credibility,
but ask yourself do the following facts support that contention?
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As COO under Myers, Colbaugh helped take the company public in January 1998. Nine
months later guidance was substantially missed, laying the groundwork for a severe plunge
in the share price of SM&As stock, which eventually traded as low as 62 cents a share a
mere 36 months later.
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Thirteen months after the IPO and telling SM&As new stockholders the benefit of
investing in SM&A, Colbaugh resigned and formed a competitor that raided executives from
the Company. One result: a costly lawsuit SM&A filed to protect its trade secrets.
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Except for his brief term on the SM&A Board, Colbaugh has not served on the board of
directors of a public company and has no relevant or current experience or effective
oversight.
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Albert Nagy
Myers would have you believe Nagy is deserving of a seat on your Board, but ask yourself is
there any benefit from a conflicted and inexperienced candidate?
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Nagy served as head of the compensation committee when Myers was drawing $1 million in
compensation and spending shareholder money to travel on jets through a company he owned.
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As head of the compensation committee, Nagy enjoyed lucrative consulting agreements
with SM&A.
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Nagy is not currently serving as a director at a publicly traded U.S. company and Myers
in fact replaced him with one of the independent board members Myers wishes to unseat
today. Why the change of heart?
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Redge Bendheim
Myers would have you believe Bendheim has the experience to serve on your Board
,
but ask
yourself with these qualifications, what can he do for you?
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Bendheim, from reading Myers proxy materials, has no experience serving on the board
of a publicly traded company and, as a retired tax partner, has no relevant or current
experience in public company governance, audit requirements or Sarbanes-Oxley
requirements.
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There is no evidence Bendheim has the kind of audit or internal controls experience at
a publicly traded company that an audit committee member requires.
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WE URGE YOU TO VOTE THE WHITE CARD TODAY AND SEND A STRONG MESSAGE TO MYERS THAT THE SM&A
STOCKHOLDERS WILL NOT STAND FOR BOARD DETERIORATION.
Sincerely,
/s/ Dwight Hanger
YOUR VOTE IS IMPORTANT SIGN, DATE AND
RETURN THE WHITE PROXY CARD TODAY
The Stockholder meeting will be on Friday, May 23, 2008 with stockholders of record as of
April 9, 2008 eligible to vote.
If you have any questions or need assistance in voting, contact
MacKenzie Partners, Inc.
Toll-Free: (800) 322-2885
winsproxy@mackenziepartners.com
Please discard and do not sign any gold proxy cards sent to you by Myers
We urge you sign, date and return the enclosed WHITE Proxy Card today or to vote by
telephone or internet by following the directions on your card.
SM&A
(Nasdaq: WINS)
May 2008
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Agenda
Why We Are Here
Historical Snapshot: Where We Have Been
The Future: Strong Strategy Built on Increasing Stockholder Value
A Broader Focus and Stronger Strategy
Building Stockholder Value - Results
The Right Team and the Right Structure
Reality vs. Dissident Assertions
Proposed Slate Adds No Value
Why You Should Support Our Board
Appendix
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Why We Are Here
Introduce our leadership team
Provide an overview of our strategic direction
Detail our operational & financial framework
Address dissident proxy position
Contest qualifications and value dissident group would bring to board
We seek your advocacy for the current board and
management team
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Historical Snapshot:
Where We Have Been
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Historical Snapshot:
10 Year History
1998 - Company goes public; Myers & Colbaugh, CEO & COO; Stock climbs from $12 share to +$32 share; 9 mo. later Company misses guidance and stock begins fall to eventually $0.62
1999 - Thirteen months after going public Colbaugh resigns and starts competing company
2000 - $30MM loss resulting from failed acquisition program in 1998 - 2000 resulting in inability to file financials timely, bank credit line in default, no working capital & stock delisted
McCarthy hired to negotiates standstill with banks and restructures debt.
2001 - McCarthy structures deal to sell three companies and writes one off as worthless security; total write-downs and operating losses total $95MM over last two years
2002 - Recovery year with management restructure and attempt to sell company
2003 - Build up of LM Program Services; single contract creates majority of top line growth.
2004 - LM terminates majority of employees on Program; revenues decline 10%
Company has no growth strategy, product strategy, sufficient sales team
Company begins to attract independent board members with industry experience
McCarthy suggests need for professional sales team and product development
2005 - Build up of FCS - Loss of FCS
Further investment made in sales and marketing, product development - Reiners hired
2006 - Board determines new leadership is necessary after stagnated performance and lack of strategic direction; Myers agrees to retire; Board begins CEO search
2007 - New CEO hired, Myers asked to resign as Chairman and from board.
New CEO is replaced after 90 days and board moves to stabilize company by hiring McCarthy as CEO
Several sales executives depart as a result of leadership turnover and launch competing firm
New sales team, product launches and acquisitions of PPI & PMA crafted by McCarthy & Reiners drive record revenues in 2007.
2007 & early 2008 - A Sea of Change
Leadership Changes
Steve Myers' contract is not renewed; Replaced by Cynthia Davis
Cynthia Davis departs company
Cathy McCarthy, new President and CEO
Anna Aguirre hired as VP Human Resources
Kevin Reiners promoted to EVP, Operations
CFO resigns
Jim Eckstaedt joins as EVP, Finance and CFO
Employee Turnover
New Strategic Plan Designed by McCarthy & Reiners approved by board
General Pace joins the Board & our Executive Team
Solid Foundation for the Future
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Historical Snapshot:
Stock Price Performance
WINS vs. Russell 2000 while Myers is Chairman and CEO
Underperformed the Russell 2000 (41%) vs. + 80%
$32.75
$0.62
(98%)
Board sees need for leadership change
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The Future:
Strong Strategy Built on Increasing
Stockholder Value
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Summary of Strategic Direction
Near-Term
Market Strategy
Federal Business
State and Local Business
Products and Services
Project Acquisition and Performance Consulting
Internal Development
Intelligent Accretive Acquisition
Financial
Continued Acquisition leverage
Continued Revenue Growth
Leverage current model for EPS growth
Overarching Strategy
Provide national project acquisition and performance consulting
Grow SM&A revenue to $500+M per year
Increase EPS at a higher rate than revenue
Realize transition from micro to small-cap status to attract broader institutional investors
Future
Market Strategy
Federal Business
State and Local Business
Commercial Business
Products and Services
Project Acquisition and Performance Consulting
Portfolio Strategy
Internal Development
Intelligent Accretive Acquisition
Financial
Continued Acquisition leverage
Continued Revenue Growth
Improved models for EPS generation
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A Broader Focus & Stronger Strategy:
Typical Client Project Lifecycle
A
B
C
RFP
DRFP
Concept
Refinement
Technology
Development
System Development
& Demonstration
Production
& Deployment
Operations
& Support
RFP
DRFP
RFP
SM&A Competition
Management and
Program Services Offerings
SM&A Business
Strategy Offerings
Total Contract Lifecycle Success
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A Broader Focus & Stronger Strategy:
Expansion of Strategic Advisors & Program Services
Business Operations
Project Planning
Earned Value Management System
(EVMS) Consulting
Cost/Schedule Management
Cost Estimating - Pricing to Perform
ECP Management
Project Controls, Scheduling Staffing
Program Services
Project Management
AwardFee(tm)
Integrated Baseline Review
Startup Leadership / Mentoring
Project Assessment
Risk/Opportunity Management
Project Metrics Architecture
Management Dashboard
Technical Management
Milestone Success(tm) (Design Review
Delivery)
Requirements Management
System Architecting
Trade Process
Interface Management
Systems Engineering Staffing
Competition Management
Opportunity win strategy
Capture management
Proposal management
Volume Leads (Technical, Cost, Past
Perf, Management, IMP/IMS)
Price-to-Win
Orals presentation leadership
Author support
Portfolio Business Strategy
SM&A Strategic Advisors
Business Intelligence for mission-critical
programs
Executive-level thought
leadership
Pursue
Win
Perform
Client
Project
Total Contract Lifecycle Success
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Competition Management
$1.5 - $2 billion1
DoD and prime contractors annual expenditure in Bid and
Proposal funds (proposals and R&D)
Program Services
$7 - $11 billion1
Major programs spend 10% - 16% of program budgets on
Program Management Office activities
Includes DoD, DoD IT, Federal (non-DoD) IT
1DCAA data, CRA estimates 2007
Program Services market is significantly larger than Competition Management
Competition Management Program Services
East 2 11.2
Total Annual Spending 2008 ($B) Market Size ($B)
(10 - 16%)
Major DoD Programs $61.1 $6.1 - $10.0
Major DoD IT $2.5 $0.3 - $0.4
Major Non-DoD IT $5.0 $0.5 - $0.9
$6.9 - $11.2
Addressable Market Size
$8.4 - $13.2 Billion
$6.9 - $11.2 B
$1.5 -
$2.0 B
A Broader Focus & Stronger Strategy:
Larger Addressable Markets
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Building Stockholder Value - Results:
Increasing Company Revenue
Q106 Q107 Q206 Q207 Q306 Q307 Q406 Q407
Revenue 17.7 23.6 18.3 25.6 17 25.1 18.8 24.085
33% Q1
Growth
40% Q2
Growth
48% Q3
Growth
28% Q4
Growth
37% Revenue Growth in 2007
$ Millions
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Building Stockholder Value - Results:
Increasing Competition Management Revenues
Q106 Q107 Q206 Q207 Q306 Q307 Q406 Q407
Revenue 11.492 14.368 11.705 14.88 9.823 13.573 12.178 12.539
25% Q1
Growth
27% Q2
Growth
39% Q3
Growth
2% Q4
Growth
22% Revenue Growth in 2007
$ Millions
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Building Stockholder Value - Results:
Increasing Program Services Revenues
Q106 Q107 Q206 Q207 Q306 Q307 Q406 Q407
Revenue 6.221 9.256 6.572 10.688 7.202 11.486 6.593 11.546
50% Q1
Growth
62% Q2
Growth
60% Q3
Growth
74% Q4
Growth
62% Revenue Growth in 2007
$ Millions
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Q306 Q307* Q406 Q407**
Revenue 0.326 0.242 0.305 0.258
840 BP Improvement Y/Y
470 BP Improvement Y/Y
Building Stockholder Value - Results:
Reduction in SG&A Expenses
SG&A (ex. Stock-based Comp) as a percent of Sales
*Excludes effects of CEO transition ** Excludes effects PPI and transition expense
Demonstrable Improvement in Cutting SG&A Expenses
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Q306 Q307* Q406 Q407**
Revenue 0.02 0.12 0.04 0.09
600% Improvement
125% Improvement
Building Stockholder Value - Results:
Increasing Earnings
Diluted EPS
Demonstrable Improvement in Increasing Earnings
*Excludes effects of CEO transition **Excludes effects PPI and transition expense
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Continue our Total Lifecycle Success approach to clients with the expansion of Program
Services and Strategic Advisors vs. mostly Competition Management
Addition of General Peter Pace to lead Strategic Advisors; COO Kevin Reiners devised
and implemented Program Services offerings
Continue to expand our market presence by Vertical Market Expansion & Client
Segmentation
Continue momentum of GROWING revenues in both Competition Management & Program
Services and REDUCING SG&A expenses
Revenue growth of 37% in 2007, Q407 revenue growth of 28%
Diversified product offerings have produced organic revenue growth of 25% in 2007
As a percent of revenues second half 2007 SG&A expense decreased*
Continue to GROW EPS
EPS growth of 250% in the second half of 2007*
Building Stockholder Value - Results:
Summary
*Excludes effects of CEO transition and PPI
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Continue to strengthen talent and morale within the organization
Two management transitions in less than six months had created an environment of
uncertainty
Continue to effectively utilize cash by purchasing back shares
Current board authorized $30M in stock repurchases
The company has repurchased 84% of the authorization through March 2008
The company purchased close to the daily maximum volume limit under SEC rules
during Q108
Current board repurchased 241,200 shares at an average price of $4.29 during the
Q108
Maintained cash reserves for strategic acquisitions
Building Stockholder Value - Results:
Summary
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The Right Team
and the
Right Structure
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The Right Team and the Right Structure:
Myers Proposed Members to be Replaced
William C. Bowes (Director since 2004 - Chair of Governance & Nominating Committee)
Mr. Bowes is a retired Vice Admiral and an experienced industry executive. As Vice Admiral, he served as Commander of the Naval Air
Systems Command, Principal Deputy Assistant Secretary of the Navy for Research, Development and Acquisition (RDA), and Acting
Assistant Secretary of the Navy for RDA. Following his retirement from active duty, Mr. Bowes joined Hughes Aircraft as a senior president
and deputy general manager of Hughes Aircraft Company's Sensors and Communications Systems Segment. Shortly after Raytheon
acquired Hughes, he joined Litton Industries where he held positions as vice president for Corporate Strategic Planning and vice
president of Programs Management at Litton's Integrated Systems Division. After Northrop Grumman acquired Litton, Mr. Bowes led one
of three business units in the newly created Navigation Systems Division of Northrop.
John P. Stenbit (Director since 2004)
Mr. Stenbit has had distinguished careers in both the private and public sectors, including participation as a member of Secretary
Rumsfeld's staff in conjunction with the transformation of the entire Department of Defense during both of his terms of service. In his
most recent position, Mr. Stenbit served as the Assistant Secretary of Defense Networks and Information Integration (NII), previously
known as Command, Control, Communications, and Intelligence (C3I), at the Pentagon. He has served in several high profile positions for
TRW, Inc., most recently in Fairfax, Virginia, where he was responsible for providing systems integration solutions to the government as
an executive vice president and member of the Management Committee of TRW. Mr. Stenbit also serves in the following capacities: (i) as
a member of SI International's (NASDAQ: SINT) board committees for compensation and corporate governance; (ii) as Chairman of the
Governance & Nominating Committee, and member of the Compensation Committee and the Audit Committee of Cogent, Inc. (NASDAQ:
COGT); (iii) on the Compensation and the Governance and Nominating Committee of Viasat (NASDAQ: VSAT); (iv) on technical/scientific
boards advising the Secretary of Defense, Commander Strategic Command, the Director National Security Agency, and the Director
National Reconnaissance Office. Mr. Stenbit serves as a member of the Board and Audit Committee of Loral Space and Communications
Company (NASDAQ: LORL).
Joseph B. Reagan (Director since 2004 - Chair of Compensation Committee)
Dr. Reagan is a technology and senior management consultant to industry and the United States Government. He retired in 1996 after
37 years with the Lockheed Martin Corporation where he was a corporate officer and vice president and general manager in the Missiles
and Space Company. Dr. Reagan was a director of Southwall Technologies Inc., an OTC public company, from October 1987 to May 1992
and from June 1993 to May 2006, where he served as Chairman of the Compensation Committee and as a member of the Audit
Committee. From December 1998 to December 2004, Dr. Reagan was a director of the Naval Studies Board, an element of the National
Research Council, where he served as Vice Chairman. From May 1992 until May 2004 he was a director of the Tech Museum of
Innovation in San Jose. He was elected to the National Academy of Engineering in 1998 and was the Chairman of the Aerospace Section
from 2005 to 2007.
Robert J. Untracht (Director since 2002 - Chair of Audit Committee)
Mr. Untracht is a consultant on financial reporting matters and teaches accounting classes at the University of California, Los Angeles. He
formerly served as an Associate Professor of Accounting at the New York Institute of Technology in Old Westbury, New York. Earlier in his
career, Mr. Untracht held positions with Ernst & Young LLP from 1981 to 1998 ranging from Manager to Audit Partner and National
Director of Retail and Consumer Product Industry Services where he served clients in the retail, aircraft leasing and entertainment
industries. He also was involved in the firm's financial restructuring group. From 1974 to 1981, at Deloitte & Touche LLP, Mr. Untracht
served clients in the aerospace, defense and manufacturing industries.
|
The Right Team and the Right Structure:
Board Members
Our super-majority independent Board is highly experienced, seasoned, and
committed to SM&A
Dwight L. Hanger (Director since 2004 - Chairman of the Board)
From 2000 to 2004 Mr. Hanger held the position of Vice President for Capgemini Ernst & Young, a provider of consulting, technology and
outsourcing services. From 1969 to 2000, he worked as a management consultant with Ernst & Young LLC and Ernst & Whinney serving
as a Partner 22 years.
J. Christopher Lewis (Director since 1996)
Mr. Lewis has been a general partner of Riordan, Lewis & Haden, equity investors in California based enterprises since 1981. Mr. Lewis
has been involved in all aspects of private equity investing, including growth financings, acquisitions, and corporate advisory activities.
Mr. Lewis also serves as a director of Tetra Tech, Inc. (NASDAQ: TTEK), and several private companies.
Cathy L. McCarthy (Director since 2007)
Ms McCarthy previously served as Executive Vice President, Chief Financial Officer and Secretary of PIA Merchandising, Inc., and as the
Chief Financial Officer of The Giant Group, Inc., and in various capacities at Wherehouse Entertainment, Inc, including Chief Financial
Officer. Ms McCarthy became an officer of the Company in November 2001 and served as President and COO from February 2006 to
July 2007. Ms. McCarthy serviced as Executive Vice President, Chief Financial Officer and Corporate Secretary from September 2001
until February 2006. She also serves on the board of Thermage, Inc. (NASDAQ: THRM).
General Peter Pace, USMC (Ret.) (Director since 2008)
General Pace served for more than 40 years in the Marine Corps before retiring in October 2007 from the most senior position in the
United States Armed Forces. As Chairman of the Joint Chiefs of Staff from 2005 until 2007, he served as the principal military advisor to
the President of the United States, the Secretary of Defense, the National Security Council, and the Homeland Security Council during a
time of tremendous change in the nation's strategic focus.
Robert Robin (Director since 2005)
Mr. Rodin holds the office of Chairman and CEO of RDN Group, a management consulting firm. From 1999 through October 2002, Mr.
Rodin served as Chairman and CEO of eConnections, a provider of extended supply chain intelligence solutions. From 1991 through
1999, Mr. Rodin served as Chief Executive Officer and President of Marshall Industries. He remained in this position until the Company
was acquired by Avnet, Inc. in 1999. He also serves on the board of Napster, inc. (NASDAQ: NAPS)
|
The Right Team and the Right Structure:
History of Good Corporate Governance
Super-majority independent board
Full board elected annually
All three key committees comprised solely of independent Directors
All equity compensation plans approved by shareholders
All Directors have exemplary attendance
Separate roles of Chairman and CEO with an independent Chairman
Regular sessions without management for the independent board as well as board committees
Adoption of corporate governance guidelines
Adoption of a code of ethics and whistleblower procedures
Annual Director performance evaluation
Continuous improvement via Risk Metrics review recommendations and NACD best practices or
recommendations
Annual Director education
Compensation Committee continues to drive to pay for performance
|
Reality vs. Dissident Assertion
|
Reality vs. Dissident Assertion
Reality:
For the 8-year period from 1998 through Dec. 2006, the revenue CAGR was 8.2%
4 of the 9 years of the Myers' leadership experienced Y/Y revenue DECREASES
Dissident Assertion:
"History of predictable revenues."
Revenues exclude discontinued operations
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Revenue 39.6 38.1 37.5 46.4 55.1 75.6 69 76.7 71.8 98.3
(3.8%)
(1.6%)
23.7%
18.8%
37.2%
11.2%
(8.7%)
(6.4%)
36.9%
Revenues
Y/Y Change
$ Millions
|
Reality vs. Dissident Assertion
Reality:
Current board has consistently provided responsible guidance to "Wall Street" analysts given the
nature of the company's business
Dissident Assertion:
"The CEO and Board failed to provide reasonably accurate guidance."
"Inadequate Board Oversight Led to Confusing, Negative Investor Calls That Damaged Shareholder
Value"
Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407
Analyst Estimate 16.49 17.92 19.12 18.7 21.26 22.09 22.28 22.36
Actual 17.72 18.28 17.03 18.77 23.62 25.57 25.06 24.09
Analyst Estimates vs. Actual Sales
$ Millions
|
Reality vs. Dissident Assertion
Reality:
SG&A expenses have not been predictable and his leadership has shown no demonstrable
ability to control SG&A expense growth
Dissident Assertion :
Myers' states that SG&A spending is predictable and that better board oversight could have
controlled growth in SG&A expense
Myers as Chairman & CEO
*Excludes effects for PPI & Management Transitions
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*
SG&A 0.201 0.22 0.34 0.259 0.225 0.19 0.239 0.252 0.307 0.246
SG&A (ex. Stock-based Comp) as a percent of Sales
|
Reality vs. Dissident Assertion
Reality:
2008 Guidance
A necessary offsite, replacement of key personnel, and the addition of General Pace to head
Strategic Advisors
Dissident Assertion:
EPS Guidance is not reconcilable and should enhance EPS by $0.07.
Item Guidance Provided Inference Dollar Values
Revenue Guidance 10% over $98.3M $108.1M $108.1M
GPM Guidance 39% - 40% 39% - 40% 42.8M
SG&A Guidance Decline vs. 28.1% in 2007 ex. PPI Approx. 27.5% ex. PPI (29.7M)
PPI Earn-out $2.0M $2.0M (2.0M)
Pre-tax Profit 11.1M
Tax Rate 41.5% - 42% 41.5% - 42% (4.6M)
Net Income $6.5M
EPS (19.25M Shares Outstanding) $0.34
|
Reality:
Growth in staff does not immediately translate to a linear growth in revenues
Hiring trends by the company are designed to:
Replenish depleted bench
Create a more robust bench
Ramp up to run rate expected at the end of the year
Dissident Assertion:
Staff increases of ~30% should lead to revenue growth of at least 20% versus 10% CEO guidance.
Reality vs. Dissident Assertion
|
Reality:
There is no accounting methodology to remedy with regards to PPI. The structure of the
transaction, which presumably Myers reviewed and approved when he signed the agreement,
is what drives the accounting treatment.
Dissident Assertions:
Myers claims that the PPI accounting treatment can be "corrected" and "turned what should
have been an accretive deal into a seriously dilutive one."
Reality vs. Dissident Assertion
|
Reality:
Current members of the board and management team have a 7.17% vested stake in the
company
Chairman Dwight Hanger did not sell shares as Myers' indicates
Dissident Assertion:
"8 of 9 current Board members feel no pain when stock falls."
Reality vs. Dissident Assertion
Name Title Amount and Nature of
Beneficial Ownership (1) Percentage of Common Stock Owned
McCarthy, Cathy L. President, Chief Executive Officer and Director 404,607 2.13%
Pace, Peter President, Chief Executive Officer
SM&A Strategic Advisors and Director
25,000
<1%
Aguirre, Anna L. Senior Vice President, Human Resources - -
Eckstaedt, James R. Executive Vice President, Finance, CFO and Secretary - -
Reiners, Kevin L. Executive Vice President, Operations 32,379 <1%
Dwight L. Hanger Director 54,227 <1%
Bowes, William C. Director 101,864 <1%
Lewis, J. Christopher Director 359,256 1.89%
Reagan, Joseph B. Director 77,864 <1%
Rodin, Robert Director 75,000 <1%
Stenbit, John P. Director 112,818 <1%
Untracht, Robert J. Director 121,959 <1%
Total Current Named Executive Officers and Directors 1,364,974 7.17%
(1) INCLUDES SHARES WHICH COULD BE ACQUIRED UPON THE EXERCISE OF STOCK OPTIONS EXERCISABLE WITHIN 60DAYS OF MARCH 14, 2008
|
Proposed Slate Adds No Value
Steven Myers
Excessive Compensation - Myers drew a $1 million annual compensation for years that was
criticized by industry observers as disproportionate and excessive.
Unnecessary Expenditures - Myers spent nearly $1.1 million of shareholder money so he could
fly private jets
Short-term Outlook - He appears to be a short-term player who is selling, not buying shares
Poor Use of Cash - Four failed acquisitions leading to $95 million in losses
Loss of Talent - Myers track record clearly demonstrated a continual loss of critical talent and
intellectual property resulting in the development of five competing firms
Poor Track Record -While Myers was Chairman and CEO the company showed a lack of an
strategic direction, inconsistent growth in revenue and earnings
Kenneth Colbaugh
Poor Guidance - Together with Myers provided guidance that was substantially missed, laying
the groundwork for a severe plunge in the price of SM&A's stock, which eventually traded as low
as 62 cents a share.
Poor Due Diligence - Key participant in failed acquisitions leading to millions in losses
Started Competing Company - Thirteen months after the IPO, Colbaugh resigned and formed a
competitor that raided executives from the company. One result: a costly lawsuit SM&A filed to
protect its trade secrets.
No Public Company Board Experience - Except for his brief term on the SM&A board, Colbaugh
has no other public company board experience
|
Proposed Slate Adds No Value
Al Nagy
Oversight of Excessive Compensation - Nagy served as head of the compensation
committee when Myers was drawing a $1 million in compensation
Received Lucrative Consulting Agreements - Nagy enjoyed lucrative consulting
agreements with SM&A on numerous occasions
No Public Company Board Experience - Nagy is not currently serving as a director at a
publicly traded U.S. company
Previously Replaced by Myers - Myers in fact replaced him with one of the independent
board members Myers wishes to unseat today.
Redge Bendheim
No Public Company Board Experience - Bendheim has no experience serving on the
board of a publicly traded company and, as a retired tax partner, has no relevant or
current experience in public company governance, audit requirements or Sarbanes-Oxley
requirements.
Limited or No Public Company Controls Experience - There is no evidence Bendheim has
the kind of audit or internal controls experience at a publicly traded company that an
audit committee member requires.
|
Steven Myers:
Summary
Underperformance of stock price
Stock price from IPO to departure in 2007 was DOWN 41% while Russell 2000 was UP
80% during that same time frame
He has no demonstrable ability to grow revenues or decrease SG&A expense
4 of 9 years experiencing declines in revenues
8-year Revenue CAGR ended December 2006 of 7.7%
In 1998, SG&A as a percent of sales was 20.1% versus 32.5% for the year ended
December 2006
No demonstrable ability to effectively deploy cash efficiently
Acquisitions by Myers resulted in $95 million in losses
History of executives departing the Company and starting up competing firms
Ken Colbaugh, a member of Myers' board slate started a competing firm after departing
from the board in 1999
A minimum of 17 senior executives were either terminated or departed the Company
and now work with competing companies
Myers' is not seeking four board seats, he is seeking control
Additional change to the leadership composition of the
company will have significant ramifications
|
Why Support Our Board
Strategic plan for growth and profitability
Diversified product portfolio
Increased addressable market
Sound acquisition strategy
Stabilized senior leadership team is aligned and delivering
Increased quarterly revenues
Decreased SG&A as a percent of revenue
Improved employee morale
Board incumbents are:
Independent, experienced, and committed to the future of SM&A
Integral members of each of the three key committees
|
Vote the WHITE proxy today
Let your Board and Senior Management team
take SM&A to the next level and continue to
steer the company to success
We represent ALL stockholders.
|
The Foundation:
Our Team
Cathy L. McCarthy - President & Chief Executive Officer since July 2007
Ms McCarthy previously served as Executive Vice President, Chief Financial Officer and Secretary of PIA Merchandising, Inc., and as
the Chief Financial Officer of The Giant Group, Inc., and in various capacities at Wherehouse Entertainment, Inc, including Chief
Financial Officer. Ms McCarthy became an officer of the Company in November 2001 and served as President and COO from
February 2006 to July 2007. Ms. McCarthy serviced as Executive Vice President, Chief Financial Officer and Corporate Secretary
from September 2001 until February 2006. She also serves on the board of Thermage, Inc. (Nasdaq: THRM).
General Peter Pace, USMC (Ret.) - President & Chief Executive Officer, Strategic Advisors Incorporated since January 2008
General Pace served for more than 40 years in the Marine Corps before retiring in October 2007 from the most senior position in the
United States Armed Forces. As Chairman of the Joint Chiefs of Staff from 2005 until 2007, he served as the principal military
advisor to the President of the United States, the Secretary of Defense, the National Security Council, and the Homeland Security
Council during a time of tremendous change in the nation's strategic focus.
Kevin L. Reiners - Executive Vice President, Operations since August 2007
Mr. Reiners served from August 2002 to August 2005 as Vice President of Programs for Lockheed Martin Space Systems Company.
In this capacity, he was responsible for the implementation of Program Management processes and disciplines for all Space Systems
programs. From July 2000 to August 2002 Mr. Reiners served as Business Director for Lockheed Martin Space Systems Company on
the Terminal High Altitude Area Defense (THAAD) program.
James R. Eckstaedt - Executive Vice President, Finance and Chief Financial Officer since January 2008
Mr. Eckstaedt previously held the position of Executive Vice President and Chief Financial Officer of Sage Software, Inc. from 1997 to
2007. Prior to Sage Software, Mr. Eckstaedt was the Chief Financial Officer of the Cerplex Group, Inc., a provider of outsourcing
services for the computer industry. Before that, he held various finance positions at Western Digital Corporation.
Anna Aguirre - Senior Vice President, Human Resources since January 2008
A seasoned HR professional with over 18 years of experience, most recently Ms. Aguirre served five years as the VP Global Human
Resources and Facilities at Iomega Corporation, a leading provider of data storage products.
New Management Team Has Implemented a Strategy That is Showing Results
|
Business
Considerations
Resource
Allocations
Feedback Loop
Client Segmentation = Gap Between Needs & Capability
Boeing
Accenture
Mature
Experienced
Novice
Rockwell
L-3
Cahaba
Pac Sci
Increased
Shareholder
Value
Increased
Client Value
Strategic
Business
Intelligence
Markets
Account
Executives
Products
Associates
A&D
A&D
A&D
SI/IT
SI/IT
SI/IT
Healthcare
Healthcare
New Markets (C&E, Fin Svcs)
Increased
Associate
Opportunity
A Broader Focus & Stronger Strategy:
Vertical Market Expansion & Client Segmentation
|
Launched in January 2008 and led by Former Chairman of the Joint
Chiefs of Staff General Peter Pace, USMC (Ret.)
SM&A Strategic Advisors, Inc
Raise SM&A profile with current and potential clients
Gain access and strategic positioning at client senior executive
levels
Attract executive-level thought leadership
Strategic Business Intelligence
Enable a strategy-driven approach to market expansion, product
development, long range planning
Develop thought leadership in markets SM&A serves
Enabled by Knowledge Management (KM)
When General Pace chose SM&A in January 2008, he told the board
that his decision to join SM&A was based on the quality of the current
board, his confidence in the current management team and the
direction articulated in the 2008 strategic plan.
Pursue
Win
Perform
Client
Project
Strategic Advisors:
Overview
|
Competition Management:
Overview
SM&A Competition Management provides the people, process, tools,
and leadership to WIN structured competitive procurements.
Since 1982, SM&A has an 85% Win rate on over 1000 proposals
worth more than $340 billion.
Service Offerings:
Opportunity win strategy
Capture management
Proposal management
Volume Leads (Technical, Cost, Past Performance, Management,
IMP/IMS)
Price-to-Win
Orals presentation leadership
Author support
Client team typically consists of 10 - 200 engineers and IT
specialists & managers
Proposal process typically requires 3 - 12 months of intense activity
at clients site
SM&A has never had a proposal cancelled prior to completion
Pursue
Win
Perform
Client
Project
|
Program Services:
Overview
Pursue
Win
Perform
Client
Project
SM&A Program Services solutions keep programs on schedule,
under budget, and increases the probability of successful program
completion.
Our experience in project management and customer
communications on 150+ programs worth over $1 trillion provides
SM&A a comprehensive understanding of the program delivery
environment.
Service Offerings:
Capability Assessments
QuickStart(r) for proposal-to-program transition
Milestone Success to meet cost, schedule, and design
requirements
AwardFeeTM to maximize profits
Leadership and Technical Services for leadership, mentoring and
specialty support
Client team typically consists of between 100 to 2000 Engineers
and Business professionals
Client program duration typically lasts between 2 to 10 years
|
Safe Harbor Statement
THIS DOCUMENT DOES NOT RECOMMEND THE PURCHASE OR SALE OF ANY SECURITY. UNDER NO
CIRCUMSTANCES IS THIS PRESENTATION TO BE USED OR CONSIDERED AS AN OFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITY.
ALL STOCKHOLDERS OF SM&A ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND
OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY SM&A FOR USE AT THE 2008
ANNUAL MEETING OF STOCKHOLDERS OF SM&A. THEY CONTAIN IMPORTANT INFORMATION REGARDING
THE ELECTION OF DIRECTORS AND OTHER MATTERS. THE DEFINITIVE PROXY STATEMENT AND FORM OF
PROXY HAVE BEEN MAILED TO STOCKHOLDERS OF RECORD OF SM&A ALONG WITH
OTHER RELEVANT DOCUMENTS. THEY ARE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT
HTTP://WWW.SEC.GOV. IN ADDITION, SM&A WILL PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT
WITHOUT CHARGE UPON REQUEST.
Some statements made in this document refer to future actions, strategies, or results that involve a
number of risks and uncertainties. Any number of factors could cause actual results to differ materially
from expectations, including a shift in demand for SM&A's Competition Management and Performance
Assurance services; fluctuations in the size, timing, and duration of client engagements; delays,
cancellations, or shifts in emphasis for competitive procurement activities; declines in future defense,
information technology, homeland security, new systems, and research and development expenditures in
the aerospace and defense industry, SIIT and other risk factors listed in SM&A's SEC reports, including the
report on Form 10-K for the year ended December 31, 2007. Actual results may differ materially from
those expressed or implied. The company does not undertake any duty to update forward-looking
statements.
Please see risk factors in SM&A's 10-K and other SEC filings
|
SM&A responds to statements made by former CEO
NEWPORT BEACH, CA April 28, 2008 SM&A today said that information contained in a recent
press release and in proxy solicitation documents filed with the Securities and Exchange Commission
by former SM&A CEO Steven Myers contained inaccurate and/or misleading information. The press
release from Myers was issued on April 24, 2008 and the presentation documents were filed with the
SEC on April 23, 2008.
Dwight Hanger, the Chairman of the Board of SM&A said, It is most unfortunate that the founder of
our company has decided to pursue such a destructive path. I see nothing positive that can come
out of his efforts; in fact, it has already proven to be a costly and distracting exercise. Having
said that, I feel that our shareholders are being misled and that we need to address several of his
allegations.
In his press release and proxy materials:
|
|
|
Myers complains about SM&As stock price
|
When Myers left the company as CEO in March 2007, SM&As stock price had fallen nearly 78% from its
peak during his tenure. The stock also was down 36% from the price it traded at three years before
his retirement. After the company went public in January 1998, Myers and his then COO Kenneth
Colbaugh now one of the Myers nominees substantially missed guidance the following September,
beginning a severe, downward spiral of the stock. At one point during Myers tenure as CEO, SM&As
stock traded at 62 cents a share and was de-listed.
We believe the recent decline in stock price, although in part a reflection of the market
conditions in general, is predominately due to our current slower revenue growth outlook and
inconsistent EPS growth partially caused by continual charges for non-operational distractions -
NOT because of poor guidance.
|
|
|
Myers criticizes the accuracy of forecasted revenues
|
We stand by our recent guidance and note that our guidance will always be based on concrete data
and the best available information about our markets, current trends and opportunities. Our
ability to generate revenue growth is highly dependent on the number and tenure of experienced
account executives, the availability of solutions we provide to our clients and the quantity and
quality of our associates who are highly skilled to deliver our solutions. It should be noted that
Myers criticizes us for
exceeding
our forecasted revenue expectations, the result of exceptional
hard work and dedication by our employees. Our strong Q4 revenues were delivered despite the
turmoil within the company and uncertain external economic negative forces, which jointly led to
our conservative guidance for the period.
|
|
|
Myers promises include correcting accounting methodology to remedy the negative
impact of the PPI acquisitions accounting process.
|
With respect to PPI, there is no accounting methodology to remedy. The structure of the
transaction, which presumably Myers reviewed and approved when he signed the agreement, is what
drives the accounting treatment consequences we are faced with.
|
|
|
Myers claims that he will effectively deploy cash
|
In 2008 until our recent black-out period, the company aggressively repurchased stock totaling $1
million, or 241,200 shares. The Board and management review on a continual basis investment
decisions which will result in the best return on assets. The Board and management will continue
to make the best use of cash based on sound analysis and the alternatives available. We currently
have a buy back authorization of $4.8 million and intend to continue to implement it pursuant to
its terms as market conditions warrant.
As for Myers expertise in the effective deployment of cash, we only ask that you look to his
track record of investments in a series of acquisitions that resulted in $45 million of write-offs
and aggregate losses totaling $50 million over 2000 and 2001. The resulting shareholder erosion was
immediately evident in a stock which plunged from a peak of $32.75 three months after going public
in 1998 to 62 cents just two years later.
|
|
|
Myers states he will reverse recent attrition of critical talent.
|
During the last 10 years as a public company under Myers leadership, 16 highly respected senior
executives and numerous senior level managers left SM&A; the majority of which either started or
joined companies that compete directly against SM&A. Much of that was due to the pervasive lack of
a sound strategic direction and investment strategy, a situation the Board moved to correct in late
2006. The recent resignations are largely due to management disruptions and the resulting impact on
employee morale and job security through much of 2007. The Board believes the new reconstituted
leadership team has never been more talented, dedicated to operational excellence and focused as a
TEAM to deliver results for shareholders.
The Board and this leadership team have recently
attracted extraordinary new talent at every level to support our strategic direction.
Mr. Hanger continued
:
Myers is running on his record, so it is only fair that our stockholders
have all of the facts and context to evaluate it. As I said in my previous letter to shareholders
,
`
We invite you to review Myers record as CEO of SM&A because, when you do, we are confident you
will conclude as we have that
our path to the future should not involve a detour into the past.
The credentials of your current Board speak for themselves. We have a super majority independent
board comprised of professionals with extensive relevant industry expertise, financial knowledge
and significant business acumen. We would put them up against Myers nominees anytime and are
confident that our stockholders will conclude that the Myers nominees offer no additional value.
I believe, after examining the facts, our shareholders will conclude as we have that it is in their
best interests and the best interest of this company for them to vote for the board of directors
nominated by the company.
YOUR VOTE IS IMPORTANT VOTE THE WHITE PROXY CARD TODAY
The Stockholder meeting will be on Friday, May 23, 2008 with stockholders of record as of
April 9, 2008 eligible to vote.
If you have any questions or need assistance in voting, contact
MacKenzie Partners, Inc.
Toll-Free: (800) 322-2885
winsproxy@mackenziepartners.com
Please ignore any materials sent to you by Myers and discard any gold cards you receive.
We urge you to sign, date and return the enclosed WHITE Proxy Card today or vote by
telephone or internet.
About SM&A
SM&A is the worlds foremost management consulting firm providing leadership and mentoring
solutions to PLAN for business capture, WIN competitive procurements and profitably PERFORM on the
projects and programs won. Our proven processes, people and tools have delivered significant
top-line and bottom-line growth across markets, products and services. From the largest aerospace
and defense contractors, through the major software providers, to healthcare and financial/audit
service providers, SM&A is the partner many companies turn to WHEN THEY MUST WIN.
Some statements made in this news release refer to future actions, strategies, or future
performance that involves a number of risks and uncertainties. Any one or number of actors could
cause actual results to differ materially from expectations, and could include: shift in demand for
SM&As Competition Management and Performance Assurance services; fluctuations in the size, timing,
and duration of client engagements; delays, cancellations, or shifts in emphasis for competitive
procurement activities; declines in future defense, information technology, homeland security, new
systems, and research
and development expenditures, and other risk factors listed in SM&As SEC reports, including the
report on Form 10-K for the year ended December 31, 2007. Actual results may differ materially from
those expressed or implied. The company expressly does not undertake any duty to update
forward-looking statements.
Media Contact:
Mike Sitrick
Jim Bates
Sitrick And Company
310-788-2850
Investor Contact:
Amy Bilbija
Senior Vice President
MacKenzie Partners
650-798-5206
Jim Eckstaedt
Executive Vice President and Chief Financial Officer
SM&A
949-975-1550 ext 296
SOURCE: SM&A
About SM&A
SM&A is the worlds foremost management consulting firm providing leadership and mentoring
solutions to PLAN for business capture, WIN competitive procurements and profitably PERFORM on the
projects and programs won. Our proven processes, people and tools have delivered significant
top-line and bottom-line growth across markets, products and services. From the largest aerospace
and defense contractors, through the major software providers, to healthcare and financial/audit
service providers, SM&A is the partner many companies turn to WHEN THEY MUST WIN.
All stockholders of SM&A are advised to read the definitive proxy statement and other documents
related to the solicitation of proxies by SM&A for use at the 2008 annual meeting of stockholders
of SM&A. They contain important information regarding the election of directors and other matters.
The definitive proxy statement and form of proxy have been mailed to stockholders of record of
SM&A along with other relevant documents. They are available at no charge on the SECs website at
http://www.sec.gov
In addition, SM&A will provide copies of the definitive proxy statement without
charge upon request.
Some statements made in this news release refer to future actions, strategies, or results that
involve a number of risks and uncertainties. Any number of factors could cause actual results to
differ materially from expectations, including a shift in demand for SM&As Competition Management
and Program services; fluctuations in the size, timing, and duration of client engagements; delays,
cancellations, or shifts in emphasis for competitive procurement activities; declines in future
defense, information technology, homeland security, new systems, and research and development
expenditures, and other risk factors listed in SM&As SEC reports, including the report on Form
10-K for the year ended December 31, 2007. Actual results may differ materially from those
expressed or implied. The company does not undertake any duty to update forward-looking statements.
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