Revenue Climbs 112%, Net Income Up 25%, EPS Up 21%

    NEWPORT BEACH, Calif., July 21 /PRNewswire/ -- SM&A Corporation
(Nasdaq: WINS) of Newport Beach, the premier proposal management company in
the United States, today announced record revenue, net income and earnings per
share growth for the three months and six months ended June 30, 1999.  These
results were driven by integration of strategic acquisitions, along with
continuing strong demand for its high value consulting services.
    The company continues to confirm its annual revenue and earnings growth
rate to be in the 20% to 25% range.

    Financial Results
    Revenue for the second quarter advanced 112.3% to $26.9 million, versus
$12.7 million in the prior year-ago quarter of 1998.  Net income for the
second quarter increased 24.7% to $3.1 million, or $0.19 per diluted share, up
from $2.4 million, or $0.16 per diluted share, in the comparable quarter of
1998.
    For the six month period ended June 30, 1999, revenues grew 123.8% to
$52.2 million, up from $23.3 million in the previous comparable 1998 six month
period.  Net income was $6.0 million, or $0.36 per diluted share, a 43.7% gain
over $4.2 million, or $0.28 per diluted share, in the comparable six months
ended June 30, 1998.
    Michael A. Piraino, President and Chief Operating Officer commented on the
Company's performance stating, "We are pleased with the financial results
achieved this current quarter.  The three operating groups, the Proposal
Management Group, the Systems Solutions Group and the Information Technology
Solutions Group each achieved significant internal growth goals, and the
recent acquisitions we made have now been fully integrated.  Now that we have
the infrastructure and new management talent in place, we are well positioned
to achieve our growth goals of revenue and earnings growth of 20%-25%."
According to Piraino, the Company's new $50 million, 5-year revolving line of
credit being provided by Mellon Bank, N.A., Wells Fargo Bank, N.A. and
Imperial Bank gives them with the added financial leverage needed to even more
effectively execute their strategic plans.
    Gross margins decreased to 42.0% for both the quarter and six month
periods from 45.0% in the comparable periods in 1998.  This was anticipated
due to the change in business mix from the integration of the new companies'
billing rates at a slightly lower gross margin.

    Completes Integration of Acquired Companies
    The Company further reported that it is pleased with the speed with which
they have integrated the operations of acquired companies and the advancements
made in cross-selling activities of their products and services.  Piraino
stated, "In particular, we are extremely satisfied with the contribution to
our growth made from our most recent acquisition, Systems Integrated Software
("SIS").  As we had expected, their software products and IT network solutions
have proven to be very complementary to our ITSG core business.  And, by
integrating their operations into ours, we are beginning to see attractive
results.  We plan to continue introducing SIS's product and service offerings
to current SM&A clients, in addition to expanding the services offered to SIS
clients."  SM&A completed the acquisition of Colorado-based Systems Integrated
Software, Inc. this past March and, in 1998, acquired Space Applications
Corporation and Decision-Science Applications, Inc.

    Stock Repurchase Program
    As previously announced, SM&A's Board of Directors authorized the Company
to repurchase up to a total of 800,000 shares of its issued and outstanding
common stock.  Repurchases have been made at the discretion of management
periodically at prices believed to be in the best interest of the Company.
As of June 23rd, the Company had repurchased 680,000 shares at an average
purchase price of $7.54.  The Company reported it will continue to monitor
stock performance and make decisions about future share repurchases, but can
provide no assurance that more shares will be repurchased.
    With over 700 highly talented employees, SM&A provides integrated proposal
management, high-end systems engineering, program integration and information
technology products and services to aerospace, defense, communications, and
engineering companies.  Statements herein concerning the company's growth and
strategies may include forward-looking statements.  The company's actual
results may differ materially from those suggested as a result of various
factors, including, without limitation, the Company's ability to recruit and
retain qualified technical personnel; identify, acquire, and integrate
suitable acquisition candidates; obtain sufficient working capital to support
such growth; and compete successfully with existing and future competitors.
Interested parties should refer to the disclosure set forth under the caption
"Risk Factors" and elsewhere in the company's Form 10-K for the year ended
December 31, 1998, for additional information regarding risks affecting the
company's financial condition and results of operations.

    Financial Results (unaudited for 1999)

                      SM&A Corporation and Subsidiaries
                      Consolidated Statements of Income
                    (in thousands, except per share data)

                            Three Months Ended          Six Months Ended
                                 June 30                      June 30,
                             1999         1998          1999         1998

    Net revenues           $26,927       $12,684      $52,241      $23,343

    Cost of revenues        15,665         6,960       30,402       12,948

    Gross profit            11,262         5,724       21,839       10,395

    SG&A expenses            5,630         2,667       10,853        4,413
    Amortization of goodwill   285            86          630           86

    Operating income         5,347         2,971       10,356        5,896

    Other income (expense):

      Interest expense        (176)          249         (129)         309

      Miscellaneous income
        (expense)               47           880           39          889

    Earnings before income
      taxes                  5,218         4,100       10,266        7,094

    Income tax expense       2,164         1,673        4,260        2,918

    Net earnings            $3,054        $2,427       $6,006       $4,176

    Diluted net earnings
      per share              $0.19         $0.16        $0.36        $0.28

    Shares used in computing
      diluted net earnings
      per share             16,247        15,630       16,471       15,042

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