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TWST: What is SM&A?
Mr. Handy: SM&A is the world's foremost management consulting firm
providing leadership and solutions to plan for business capture, to win
competitive procurements, and to profitably perform on the projects and
programs won. Our proven process, 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
our major software providers, to healthcare and financial audit service
providers, SM&A is the partner that many companies turn to when they
must win. The company started in 1982 and went public in 1998. Over that
period of time, it has had significant growth, up through the period of
the fiscal year end of 2005. The company's heritage comes out of
providing our services into the aerospace and defense sector. The
company has been executing a strategy over the past few years to
diversify outside of aerospace and defense, and we have successfully
done so. The company's revenue now comes from about 70% aerospace and
defense compared to more than 90% a few years ago. TWST: What defines the competitive landscape? What are the customer or
client needs that are to be addressed, and what's the ultimate
differentiator for SM&A?
Mr. Handy: SM&A is the largest provider of these services to our
customers, with about $77 million in revenue in 2005, and we are the
only public company providing these services. The next comparable level
of companies that do what we do are in the range of approximately $12
million to $14 million in annual revenue. Then there are a large number
of small sole proprietors that provide comparable services. They don't
have the necessary bandwidth, gold standard processes and high value
consultants to provide the level of services that we do. Outside of
those small competitors, the competitive landscape contains our own
customers. Oftentimes, they have their own internal teams that provide
proposal development services. And those are the ones that we are
constantly trying to penetrate to demonstrate our added value through
increasing their win rate and reducing their costs through an
outsourcing arrangement.
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