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GAAP Net Income Increases 35% and Non-GAAP Net Income Increases 29% from Prior Quarter
Non-GAAP Operating Margin Improves to 24%

HERNDON, Va. — (BUSINESS WIRE) — October 29, 2009 — Deltek, Inc. (Nasdaq: PROJ), the leading provider of enterprise applications software for project-focused businesses, today announced financial results for its third quarter ended September 30, 2009.

Total revenue for Q3 was $64.1 million, compared to $69.4 million in Q2 2009. Q2 total revenue included $3.4 million of other revenue associated with fees generated from the Company’s annual customer conference held in May. License revenue for Q3 was $12.7 million, compared to $15.8 million in Q2. Maintenance and support revenue in Q3 was $31.6 million, an increase from $31.0 million in Q2. Consulting services revenue for Q3 was $19.7 million, an increase from $19.2 million in the prior quarter.

Q3 GAAP net income increased 35% to $6.6 million, from $4.9 million in the prior quarter, and non-GAAP net income increased 29% to $9.9 million, from $7.6 million in Q2. Q3 GAAP EPS was $0.10, compared with $0.09 in Q2 and non-GAAP EPS was $0.15, compared with $0.14 in Q2. Q3 cash flow from operations increased 22% from Q2 to $18.6 million, resulting in a cash balance of $130.4 million at September 30, 2009.

“Our continuing focus on margin expansion and cost control drove our double-digit profit growth and strong cash flow,” said Kevin Parker, president and CEO of Deltek. “While near-term predictability for license revenue remains challenging across the software industry, we remain very engaged with our customers and our pipelines continue to be strong in all segments of our business. During the quarter, we saw a significant increase in new customer activity in our A&E and professional services vertical market.”

“Throughout 2009, we have successfully maintained our strong profitability, significantly strengthened our balance sheet, increased cash flow and delivered innovative products to market. As a result of these accomplishments, we are well positioned for Q4 and 2010.”

When compared to prior year results, total revenue for Q3 was $64.1 million, compared to $71.0 million in 2008. License revenue for Q3 was $12.7 million, compared to $18.5 million in 2008. Maintenance and support revenue in Q3 was $31.6 million, an increase from $29.3 million in 2008. Consulting services revenue for Q3 was $19.7 million, compared to $23.1 million in the prior year. Other revenues were insignificant in both Q3 2009 and Q3 2008.

GAAP net income for the third quarter was $6.6 million, or $0.10 per share, compared to $8.0 million, or $0.17 per share, last year. Non-GAAP net income for Q3 was $9.9 million, or $0.15 per share, compared to $10.3 million, or $0.22 per share, in Q3 2008.

Non-GAAP net income excludes the net-of-tax impact of stock-based compensation, expenses associated with the Company's 2005 recapitalization, amortization of acquired intangible assets and restructuring charges.

The per share amounts in this press release refer to diluted per share figures.

Q3 Highlights

• During the quarter, Deltek amended and extended the Credit Agreement governing its term loans and revolving credit facility. Under the amended Credit Agreement, $129.4 million of the Company’s existing term loans were extended by two years to April 2013. The remaining $50.2 million of the Company’s existing term loans will mature in April 2011, with four equal quarterly installments beginning September 30, 2010.
  
  Under the amended Credit Agreement, the Company also extended by three years $22.5 million of the Company’s $30 million revolving credit facility. That portion will now expire in April 2013. The remaining $7.5 million of the Company’s revolving credit facility will expire in April 2010. The Company extended the term loans and revolving credit facility to maximize financial flexibility and to improve upon an already strong balance sheet.

• Deltek appointed Jim Dellamore as its new Executive Vice President, Global Services. In this position, Mr. Dellamore is responsible for the strategic and operational direction of Deltek’s Global Services organization. Mr. Dellamore brings over 30 years of experience to Deltek, and prior to his arrival at the Company, he held senior management positions with GXS and Oracle Corporation.
• Deltek announced that Goba (Pty) Limited, one of South Africa’s leading engineering firms, selected Deltek Vision to win more business, streamline their back-office and successfully manage large, complex projects. Goba joins an expanding group of customers in this region, demonstrating the momentum that Deltek Vision is experiencing in the growing South African marketplace.
• Deltek announced that numerous customers, including ATK, Camber Corporation, and Comprehensive Health Services, have purchased AppGRC for Deltek Costpoint since the solution was released. Government contractors leverage the powerful solution to automate the monitoring of key Costpoint data, making it easier to provide persuasive audit evidence for DCAA, SOX and other regulatory compliance. With the Federal Government’s growing emphasis on contractor transparency, AppGRC enables Deltek customers to protect their information and respond to auditor requests quickly, significantly reducing the overall cost of compliance.

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