Sra International 8-K Sra Announces Financial Resultsfor First Quarter Fiscal Year 2006

Exhibit 99.1

SRA ANNOUNCES FINANCIAL RESULTSFOR FIRST QUARTER FISCAL YEAR 2006

• Revenue: Up 38% to $280.7 million

• Net Income: Up 30% to $16.2 million before FAS 123R expense ($14.4 million GAAP)

• Diluted EPS: Up 27% to $0.28 before FAS 123R expense ($0.25 GAAP)

• New Business Awards of $658 million

FAIRFAX, Va. – November 2, 2005 – SRA International, Inc. (NYSE: SRX), a leading provider of information technology services and solutions to the federal government, today announced operating results for the first quarter of fiscal year 2006, which ended September 30, 2005.

Revenue increased 38% from $203.5 million in the September 2004 quarter to $280.7 million. Excluding the effect of FAS 123R, operating income increased 30% from $19.8 million in the September 2004 quarter to $25.7 million, and net income increased 30% from $12.4 million in the September 2004 quarter to $16.2 million. Excluding the effect of FAS 123R, diluted earnings per share increased 27% from $0.22 in the September 2004 quarter to $0.28, compared with previous guidance of at least $0.27.

On July 1, 2005, the Company adopted Financial Accounting Standards Board Statement No. 123R, which requires the Company to recognize share-based payment transactions as a compensation expense in its financial statements. Including the effect of FAS 123R, quarterly GAAP operating income was $22.8 million, net income was $14.4 million, and diluted earnings per share were $0.25. Management believes that excluding the effect of FAS 123R, although not in accordance with GAAP, provides a better comparison with prior results and with the results of companies not yet required to comply with FAS 123R. A reconciliation of GAAP results with results excluding the effect of FAS 123R is provided at the end of this press release.

Renny DiPentima, SRA President and Chief Executive Officer, stated, “We are pleased to announce another strong quarter. Our backlog of signed business orders continues to grow with substantial new business wins, and our pipeline of new opportunities increased more than in any other quarter in our history. Earlier today, we closed our acquisition of Spectrum Solutions Group, Inc., a growing and trusted provider of enterprise resource planning (ERP) services throughout the federal government.”

Chief Financial Officer Stephen Hughes added, “We are very pleased with the September quarter results. Year-over-year earnings were up sharply again, and we will continue to invest in building the business, with our focus on marketing and sales efforts. We are enjoying outstanding returns on these investments as we continue to win significant new business.”

New Business Awards

During the first quarter, SRA won new business with potential value of $658 million, a record amount for the Company. Over the last six months, the Company won new business with a potential value of $1.2 billion, if all options are exercised. The Company’s backlog of signed business orders is now over $3.2 billion, a year-over-year increase of 32%. Major highlights of competitive contract awards during the quarter include:

• Department of Homeland Security (DHS) Office for Civil Rights and Civil Liberties (CRCL). Under a single award, five-year Blanket Purchase Agreement with a maximum value of $25 million, SRA will provide research, analysis, business process, strategic consulting, and technical services support. CRCL provides legal and policy advice to DHS and leads the Department’s equal employment opportunity programs.

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• Federal Aviation Administration (FAA) William J. Hughes Technical Center.SRA will deliver engineering, research, and development services in the areas of airport pavement and aircraft fire safety. The two five-year contracts have a combined maximum value of $51.2 million if all options are exercised. The Center provides research and development support to the FAA to improve the safety and efficiency of the U.S. aerospace system.

• Army Forces Command Contract Maintenance Facility.SRA will provide materiel management, systems administration, and training to enhance unit readiness for the Army 101st Airborne Division at Fort Campbell, Kentucky, as well as other locations. The task order has an estimated value of $26.8 million over five years if all options are exercised.

• Kuwait Iraq C4 Commercialization (KICC). SRA is the sole winner of a five-year, $46 million Blanket Purchase Agreement to design, install, and maintain the information technology infrastructure for nine Army bases in southern Iraq. The KICC program will initially provide critical communications for the warfighter in Iraq, but it will eventually become part of the communications infrastructure for the Iraqi people.

• DoD Office of the Director of Defense Research and Engineering (DDR&E).SRA will provide a broad range of IT and program support, including database development and administration, financial management, and specialized technical analysis of research and engineering projects. The task order has an estimated value of $15.9 million over five years if all options are exercised. DDR&E oversees research and engineering projects to help solve current and future DoD challenges.

In addition, the Company won more than $150 million in task orders from the Departments of Defense, Homeland Security, and Justice to implement new business processes and intelligence analysis systems to counter terrorist threats.

Forward Guidance

The Company is issuing initial guidance for the second quarter of fiscal year 2006 and updating its forward guidance for fiscal year 2006 provided on August 1, 2005. The table below represents management’s current expectations about the Company’s future financial performance, based on information available at this time. The forward guidance in the table below includes the expected contribution of Spectrum Solutions Group, Inc., but it does not include any effect for acquisitions that SRA might make in the future.

Measure	Quarter Ending December 31, 2005	Fiscal Year Ending June 30, 2006
Revenue (in millions)	$280-$285	$1,140-$1,175
Diluted EPS, excluding effect of FAS 123R	At least $0.28	$1.21-$1.26
FAS 123R effect	$(0.04)	$(0.14)
Diluted EPS, including effect of FAS 123R	At least $0.24	$1.07-$1.12
Diluted Share Equivalents (in millions)	57.6	58.1

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About SRA International, Inc.

SRA is a leading provider of information technology services and solutions — including strategic consulting; systems design, development, and integration; and outsourcing and managed services — to clients in national security, civil government, and health care and public health markets. The Company also delivers business solutions for text and data mining, contingency and disaster response planning, information assurance, environmental strategies, enterprise systems management, and wireless integration.

FORTUNE® magazine has chosen SRA as one of the “100 Best Companies to Work For” for six consecutive years. In 2005,BusinessWeek selected SRA as one of its “Hot Growth” companies and as an Info Tech 100 Company. The Company’s 4,800 employees serve clients from its headquarters in Fairfax, Virginia, and offices across the country. For additional information on SRA, please visitwww.sra.com.

Any statements in this press release about future expectations, plans, and prospects for SRA, including statements containing the words “estimates,” “believes,” “anticipates,” “plans,” “expects,” “will,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: our dependence on our contracts with federal government agencies, particularly within the U.S. Department of Defense, for substantially all of our revenue, our dependence on our GSA schedule contracts and our position as a prime contractor on government-wide acquisition contracts to grow our business, and other factors discussed in our latest quarterly report on Form 10-K filed with the SEC on September 13, 2005. In addition, the forward-looking statements included in this press release represent our views as of November 2, 2005. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to November 2, 2005.

CONTACTS:
Stuart Davis	Stephen Hughes
VP and Director, Investor Relations	Executive VP and CFO
SRA, International, Inc.	SRA International, Inc.
(703) 502-7731	(703) 227-7010
stuart_davis@sra.com	steve_hughes@sra.com

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Pro Forma Consolidated Statement of Operations for the Three Months Ended September 30, 2005 (Unaudited)

(in thousands, except share and per share amounts)

The Company has presented net income, as adjusted, to show the effect that the adoption of FAS 123R had on the Company’s earnings per share. The Company believes that these non-GAAP financial measures provide useful information to investors because they allow investors to compare the Company’s current performance to prior performance and to the performance of companies that have not yet adopted FAS 123R. These non-GAAP financial measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

	As Reported 30-Sep-05 3 months ended		Adjustments			Pro Forma 30-Sep-05 3 months ended
Revenue	$	280,695	$	—		$	280,695
Operating costs and expenses:
Cost of services		210,240		—			210,240
Selling, general and administrative		43,657		(2,959	)		40,698	(1)
Depreciation and amortization		4,010		—			4,010
Total operating costs and expenses		257,907		(2,959	)		254,948
Operating income		22,788		2,959			25,747
Interest income		733		—			733
Pro forma income before taxes		23,521		2,959			26,480
Pro forma provision for taxes		9,131		1,148			10,279	(2)
Pro forma net income	$	14,390		1,811		$	16,201
Pro forma earnings per share:
Basic	$	0.27	$	0.03		$	0.30
Diluted	$	0.25	$	0.03		$	0.28
Weighted-average shares
Basic		54,263,817		—			54,263,817
Diluted		57,408,033		122,240			57,530,273

¹ Adjusted to eliminate the FAS 123R stock compensation expense resulting from the adoption of FAS 123R on July 1, 2005.

² Adjusted to eliminate the tax effect of the adjustment described in Note 1 at the consolidated effective tax rate of 38.8%.

Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share amounts)

	Three Months Ended
	9/30/04		9/30/05
Revenue	$	203,474	$	280,695
Operating costs and expenses:
Cost of services		151,546		210,240
Selling, general and administrative		29,276		43,657
Depreciation and amortization		2,882		4,010
Total operating costs and expenses		183,704		257,907
Operating income		19,770		22,788
Interest income, net		523		733
Income before taxes		20,293		23,521
Provision for income taxes		7,853		9,131
Net income	$	12,440	$	14,390
Earnings per share:
Basic	$	0.24	$	0.27
Diluted	$	0.22	$	0.25
Weighted-average shares:
Basic		51,986,022		54,263,817
Diluted		55,540,778		57,408,033

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands)

	As of
	6/30/05		9/30/05
Current assets:
Cash and cash equivalents	$	162,973	$	88,454
Short-term investments		20,156		23,173
Accounts receivable, net		206,995		261,502
Prepaid expenses and other		19,931		15,919
Deferred income taxes, current		6,506		8,153
Total current assets		416,561		397,201
Total property and equipment, net		34,754		34,836
Other assets:
Goodwill		89,214		162,540
Identified intangibles, net		17,661		28,457
Investments		5,172		—
Deferred income taxes, noncurrent		—		136
Deferred compensation trust		5,755		7,798
Total other assets		117,802		198,931
Total assets	$	569,117	$	630,968
Current liabilities:
Accounts payable and accrued expenses	$	75,383	$	97,836
Accrued payroll and employee benefits		49,486		61,794
Billings in excess of revenue recognized		6,616		5,593
Total current liabilities		131,485		165,223
Long-term liabilities:
Deferred income taxes, noncurrent		106		—
Other long-term liabilities		8,434		10,018
Total long-term liabilities		8,540		10,018
Total liabilities		140,025		175,241
Total stockholders’ equity		429,092		455,727
Total liabilities and stockholders’ equity	$	569,117	$	630,968

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Three Months Ended
	9/30/04			9/30/05
Cash flows from operating activities:
Net income	$	12,440		$	14,390
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,882			4,010
Stock-based compensation		82			3,080
Tax benefits of stock option exercises		2,658			—
Deferred income taxes		(956	)		(1,889	)
Working capital changes, net of the effect of acquisitions		12,502			(7,491	)
Net cash provided by operating activities		29,608			12,100
Cash flows from investing activities:
Capital expenditures		(3,527	)		(2,775	)
Sales and maturities of investments		—			2,636
Purchases of investments		(1,867	)		—
Acquisition of Galaxy Scientific Corporation, net of cash acquired		—			(95,645	)
Net cash used in investing activities		(5,394	)		(95,784	)
Cash flows from financing activities:
Issuance of common stock		2,410			4,727
Tax benefits of stock option exercises		—			4,438
Net cash provided by financing activities		2,410			9,165
Net increase (decrease) in cash and cash equivalents		26,624			(74,519	)
Cash and cash equivalents, beginning of period		143,367			162,973
Cash and cash equivalents, end of period	$	169,991		$	88,454
Supplemental disclosures of cash flow information:
Cash paid during the period:
Income taxes	$	1,391		$	2,572
Cash received during the period:
Interest	$	769		$	983
Income taxes	$	176		$	16

Reconciliation Between Total Revenue Growth and Organic Revenue Growth (Unaudited)

(in thousands)

Organic revenue growth, as presented, measures revenue growth adjusted for the impact of acquisitions. The Company believes that this non-GAAP financial measure provides useful information because it allows investors to better assess the underlying growth rate of the Company’s existing business. This non-GAAP financial measure should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

	Three Months Ended
	9/30/04		9/30/05		Growth
Total Revenue, as reported	$	203,474	$	280,695	38.0	%
Plus: Touchstone revenue for July 1, 2004 through September 30, 2004		7,410		—
Plus: Galaxy revenue for July 1, 2004 through September 30, 2004		18,495		—
Organic Revenue	$	229,379	$	280,695	22.4	%