In looking back at the state of the

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1 GOVERNMENT CONTRACTOR QUARTERLY MARKET UPDATE Q In This Issue After The Storm: Breathing a Sigh of Relief (For Now) 1 After The Storm: Breathing A Sign of Relief (For Now) 2 Public Company Valuation Multiples & Select Financial Metrics 3 M&A Transactions 4 Select Market Activity 5 Industry and Agency News 6 Representative Transactions 7 Contact Information SC&H CAPITAL is an investment banking firm dedicated to advising the owners of middle market companies on merger and acquisition transactions, capital raises, and corporate finance projects. SC&H Capital has successfully closed 60+ transactions over the past eight years. Indexed at 12/31/2013 Close In looking back at the state of the government contracting marketplace over the past two years, there were several seismic changes that took place. In 2013, we saw sequestration, the government shutdown, and an overall austere budget climate, which all created considerable challenges for both large and small contractors. However in 2014, the government fiscal yearend proved to be a stronger selling season for contractors with many industry members breathing a sigh of relief into Q4. Many of these enhanced contracting opportunities came about due to government buyers being motivated during the home stretch of the One Year Relative Performance: Over the 52-week period ending December 31, 2014, the Prime Defense Contractor index was up 20.9% while the Other Defense Contractor index was up 9.3%. Over the same period, the benchmark S&P 500 was up 12.6% while the benchmark Russell 2000 index increased 4.2% Year Relative Performance S&P 500 Russell 2000 Primes Other Defense Indexed at 12/31/2011 Close fiscal year. So, this might potentially turn out to be a short-term relief for the government contracting community. From an M&A perspective, thanks to improvements in the broader economy, capital now being inexpensive, a rise in lending opportunities, and private equity firms making more investments, 2015 has become an ideal time for companies seeking acquisition opportunities. Three Year Relative Performance: Over the 36-month period ended December 31, 2014, the Prime Defense Contractor index gained 105.7% and the Other Defense Contractor index increased by 61.7% compared to the benchmark S&P 500 and Russell 2000 indexes which had gained 61.2% and 60.1%, respectively Year Relative Performance S&P 500 Russell 2000 Primes Other Defense Source: Capital IQ 1

2 PUBLIC COMPANY VALUATIONS MULTIPLES AND SELECT FINANCIAL METRICS Large Prime Contractors ($ in Millions of USD, except for per share info) Recent % off Trailing Twelve Months Forward Stock Price 52 - Week Market Enterprise EV / EV / EV / EV / Company Ticker 12/31/2014 High Cap Value Revenue EBITDA Revenue EBITDA The Boeing Company BA $ (10.1%) $ 92,666.7 $ 91, x 10.7x 1.0x 8.9x Honeywell International Inc. HON $99.92 (2.4%) $ 78,218.4 $ 78, x 11.4x 1.9x 9.9x Accenture plc ACN $89.31 (2.9%) $ 56,098.2 $ 52, x 10.8x 1.7x 10.1x Lockheed Martin Corporation LMT $ (3.1%) $ 60,491.1 $ 63, x 10.2x 1.4x 9.8x General Dynamics Corporation GD $ (5.8%) $ 45,605.9 $ 44, x 10.4x 1.4x 9.7x Raytheon Company RTN $ (3.0%) $ 33,356.2 $ 34, x 10.0x 1.5x 9.1x Northrop Grumman Corporation NOC $ (4.9%) $ 29,772.6 $ 32, x 8.8x 1.4x - Large Prime Contractors Median 1.4x 10.4x 1.4x 9.8x Large Prime Contractors Mean 1.5x 10.3x 1.5x 9.6x Other Defense Contractors ($ in Millions of USD, except for per share info) Recent % off Trailing Twelve Months Forward Stock Price 52 - Week Market Enterprise EV / EV / EV / EV / Company Ticker 12/31/2014 High Cap Value Revenue EBITDA Revenue EBITDA L-3 Communications Holdings Inc. LLL $ (2.5%) $ 10,744.6 $ 14, x 10.7x 1.2x 10.7x Computer Sciences Corporation CSC $63.05 (5.9%) $ 8,858.0 $ 9, x 4.8x 0.8x 4.3x Harris Corporation HRS $71.82 (9.5%) $ 7,511.8 $ 8, x 8.1x 1.8x 8.1x Alliant Techsystems Inc. ATK $ (26.5%) $ 3,712.8 $ 5, x 7.3x 1.1x 7.3x Leidos Holdings, Inc. LDOS $43.52 (8.6%) $ 3,223.4 $ 4, x 9.3x 0.8x 9.9x CACI International Inc. CACI $86.18 (6.1%) $ 2,050.9 $ 3, x 9.5x 0.9x 10.0x Engility Holdings, Inc. EGL $42.80 (7.5%) $ $ 1, x 9.2x 0.7x 7.1x ManTech International Corporation MANT $30.23 (4.9%) $ 1,126.8 $ 1, x 7.9x 0.6x 8.4x ICF International Inc. ICFI $40.98 (7.6%) $ $ x 10.1x 0.7x 7.2x NCI, Inc. NCIT $10.21 (22.2%) $ $ x 5.7x 0.3x 4.7x Other Defense Contractors Median 0.8x 8.6x 0.8x 7.7x Other Defense Contractors Mean 0.9x 8.3x 0.9x 7.8x Government Services Average EBITDA Multiple Samples Government Services Average Revenue Multiple Samples 12.00x 12/31/ /31/ x 12/31/ /31/2014 TEV/EBITDA 10.00x 8.00x 6.00x 4.00x 2.00x 10.31x 9.66x 6.05x 8.31x 8.46x 7.95x TEV/Revenue 1.40x 1.20x 1.00x 0.80x 0.60x 0.40x 0.20x 1.22x 1.41x 0.46x 0.68x 1.21x 1.28x 0.00x Aerospace & Defense IT Services Diversified 0.00x Aerospace & Defense IT Services Diversified Source: Capital IQ Note: Data as of 12/31/13 and 12/31/14 Aerospace & Defense: NOC, LMT, GD, BA, RTN, HON, LLL IT Services: LDOS, CACI, MANT, EGL, NCIT Diversified: CSC, HRS, ICFI, ACN 2 Government Contractor Quarterly Market Update Q1 2015

3 NOTABLE M&A TRANSACTIONS ENGILITY ENTERED INTO DEFINITIVE AGREEMENT TO ACQUIRE TASC Engility, a leading provider of specialized technical consulting, program and business support services, engineering, and technology lifecycle support to government, has entered into definitive agreement to acquire TASC, a leading professional services provider to the national security and public safety markets. This all-stock transaction is valued at approximately $1.1 billion, including the assumption of net debt. The transaction was approved by the Boards of Directors of both companies and is expected to close in the first quarter of LOCKHEED MARTIN ACQUIRES SYSTEMS MADE SIMPLE Lockheed Martin closed its acquisition of Systems Made Simple, a leading provider of health information technology solutions to the U.S. federal government. This transaction will broaden Lockheed Martin s capabilities across the spectrum of health IT operations. The financial terms were not disclosed, but Systems Made Simple brings a strong position on the Veterans Affairs Transformation Twenty-One Total Technology contract, known as T4. RAYTHEON ACQUIRES BLACKBIRD TECHNOLOGIES FOR $420 MILLION Raytheon Company has acquired Blackbird Technologies, a leading provider of persistent surveillance, secure tactical communications, and cybersecurity solutions to the Intelligence Community (IC) and special operations market. The purchase price is approximately $420 million, subject to post-closing adjustments, and Blackbird will become part of Raytheon Company s Intelligence, Information and Services (IIS) business. BOOZ ALLEN MAKES HEALTH ANALYTICS DEAL Booz Allen Hamilton is giving its health analytics capabilities a boost with the acquisition of Epidemico, an informatics company in Boston. The company develops products that can provide early insights, continuous monitoring, and consumer engagement for varied aspects of population health, Booz Allen said in an announcement. Epidemico works on such problems as disease outbreaks, drug safety, supply chain vulnerabilities, and other issues. VISTRONIX MAKES THREE ACQUISITIONS Vistronix, a leading provider of intelligence and technology solutions to national security agencies in the federal space, acquired ExaTech Solutions, Objective Solutions (OSI), and Agency Consulting Group (ACG). The combined transaction deepens Vistronix expertise in big data analytics, cloud computing, and cybersecurity offerings to the intelligence community. NOVETTA SOLUTIONS ON ACQUISITION SPREE IN 2014 Novetta Solutions, a provider of advanced data analytics solutions, acquired Global News Intelligence, SigInt Technologies, Digital Results Group, and Sentinel Applied Analytics, during The acquisitions expand Novetta s analytical offerings in sentiment and influence analytics, intelligence analysis, and added a scalable web based data fusion software that will allow access to new commercial, defense, and law enforcement customer solutions. Novetta is backed by the private equity firm Arlington Capital. The company was formed in 2012 when it bought FGM and merged it with White Oak Technologies, a company it already had in its portfolio. 3 Government Contractor Quarterly Market Update Q1 2015

4 SELECT MARKET ACTIVITY Date Closed Target Buyers 01/12/2014 Neohapsis, Inc. Cisco Systems, Inc. (NasdaqGS:CSCO) Deal Value ($ in millions) Business Description - Neohapsis, Inc. provides mobile and cloud security services, application security as well as IT Risk management and architecture assessment services. The company serves both government and commercial customers worldwide. 12/23/2014 Enviro Systems Incorporated Zodiac Aerospace (ENXTPA:ZC) - Enviro Systems Incorporated designs and manufactures environmental control systems for aircraft manufacturers. The company provides services in the areas of engineering and testing, certification, and technical support services. 12/16/2014 DTECH LABS, Inc. Cubic Corporation (NYSE:CUB) DTECH LABS, Inc. designs and integrates deployable and tactical communications products and solutions for military, government, first-responder, and civilian customer base. 12/12/2014 Perimeter Internetworking Corp. BAE Systems plc (LSE:BA.L) - Perimeter Internetworking Corp. provides Security-as-a-Service security solutions including firewall management and monitoring, intrusion protection and prevention, and vulnerability testing. 12/10/2014 OSI;ExaTech Solutions; ACG Vistronix, Inc. - Objective Solutions Inc. (OSI), ExaTech Solutions, Inc., and Agency Consulting Group, Inc. (ACG) develop engineering solutions for Intelligence Community (IC), federal, and commercial clients. 12/09/2014 Government Contract Solutions, Inc. Preferred Systems Solutions, Inc. - Government Contract Solutions, Inc. offers procurement operations services, acquisition framework and lifecycle management services, and source selection management for federal agencies and government contractors. 12/03/2014 The Tipstone Group, LLC Ross Technologies, Inc. - The Tipstone Group provides professional support services in the fields of information security/assurance, computer network defense, and R&D for government and commercial organizations. 11/21/2014 ArmorWorks, Inc. Littlejohn Capital, LLC 4.1 ArmorWorks, Inc. develops and manufactures armor and survivability products for military and law enforcement agencies. It offers military body armor products and armor ballistic engineering. 11/20/2014 DefenseWeb Technologies, AIS Cage Site 11/05/2014 Blackbird Technologies, Inc. 10/31/2014 Avionics Interface Technologies, LLC Three Wire Systems, LLC Raytheon Company (NYSE:RTN) Teradyne Inc. (NYSE:TER) - DefenseWeb Technologies, AIS Cage Site develops software solutions for federal health care, well being, and family readiness organizations Blackbird Technologies, Inc. provides technology solutions for customers in the defense, intelligence, and law enforcement communities. Products and services include surveilance solutions and cybersecurity services Avionics Interface Technologies designs and manufactures flight modules, test instrumentation, simulation modules, embedded solutions, and related support systems for commercial aerospace and defense industries worldwide. 10/29/2014 Epidemico, Inc. Booz Allen Hamilton Holding Corporation (NYSE:BAH) - Epidemico, Inc. provides health IT cloud-based solutions for the public, government officials, life science, financial and Fortune 500 companies both in the U.S. and internationally. 10/21/2014 Sotera Defense Solutions, Engineered Solutions Division Outdoor Venture Corporation - The Engineered Solutions Division of Sotera Defense Solutions, Inc. manufactures and offers components and services for expeditionary systems, such as field kitchens and sanitary equipment for military personnel. 10/17/2014 Optimos, Inc. Acentia, LLC - Optimos, Inc. provides information technology strategy and consulting services to government clients. Services include enterprise technology services, IV&V, cloud migration, as well as architecture services. 10/09/2014 Safeguard Armor Solutions, Inc. Imperalis Holding Corp. (OTCPK:IMHC) - Safeguard Armor Solutions, Inc. manufactures and sells armor protection solutions, including ballistic blast, I.E.D. blast mitigation and intrusion protection for commercial assets, power plants, and vehicles. 10/01/2014 CMX Technologies, Inc. Xator Holdings Corp - CMX Technologies, Inc. provides technical, consulting, and engineering services to government organizations and commercial businesses around the world. 4 Government Contractor Quarterly Market Update Q1 2015

5 INDUSTRY AND AGENCY NEWS SENATE PASSES $1.1 TRILLION GOVERNMENT SPENDING BILL In December, the Senate approved a sweeping $1.1 trillion spending bill to fund most of the federal government through the next fiscal year. The legislation widely referred to as the Crominbus for continuing resolution (CR) and omnibus spending bill funds most government agencies through September The Department of Homeland Security will be treated differently, getting a funding extension only through Feb. 27, by which time Republicans will control both chambers of Congress. GAO: BID PROTESTS UP IN 2014 A recent Government Accountability Office (GAO) report indicated that the number of disputed federal contract awards reached 2,561 in fiscal 2014, a 5 percent increase over the 2,429 recorded in the preceding year. GAO said that contractors filed 2,445 bid protests, 50 cost-related claims, and 66 petitions for reconsideration with the agency during the past fiscal year. PRESIDENT OBAMA NOMINATES ASHTON CARTER AS THE NEW SECRETARY OF DEFENSE In December, President Obama announced his nomination of former Deputy Secretary of Defense Ashton Carter to be the next U.S. Secretary of Defense. Carter has been in public service for more than 30 years, and has served in various positions under 11 Secretaries of Defense. Many believe that Carter will serve as an acquisition reformer. NIST FINALIZES GUIDELINES ON FEDERAL CLOUD TECH ADOPTION The National Institute of Standards and Technology released a road map for federal agencies to accelerate migration of their information technology systems to cloud-based infrastructure. DOD BOLSTERS SMALL BUSINESS PROGRAMS The Department of Defense increased its small-business contracting, exceeding its goals in the sector for the first time. The Pentagon awarded an estimated $53 billion worth of prime contracts to small businesses in fiscal year 2014, or 23 percent of all prime contracts surpassing the percent goal for the year. NASA AWARDS 56 CONTRACTS UNDER POTENTIAL $20 BILLION IDIQ BID NASA has awarded 56 contracts under a potential 10-year, $20 billion vehicle that covers information technology products and services for the space agency s centers and other federal agencies. The Solutions for Enterprise-Wide Procurement (SEWP) V program includes a five-year base period for work between Nov. 1 and Oct. 31, 2019, as well as a five-year option to extend work through Oct. 31, SEWP aims to help NASA and its partners in government and industry to access IT and computer technologies, scientific and engineering processing functions, network equipment, and peripherals. PUBLIC IT CLOUD SPENDING TO HIT $127 BILLION IN 2018 A new forecast from International Data Corp. predicts public information technology cloud services spending will grow to more than $127 billion in 2018 from the $56.6 billion projected for IT cloud spending growth represents more than 50 percent of software, server, and storage spending worldwide in 2018, IDC said. Among the factors driving public IT cloud services growth is the adoption of cloud first strategies by both IT vendors expanding their offerings and IT buyers implementing new solutions. 5 Government Contractor Quarterly Market Update Q1 2015

6 REPRESENTATIVE TRANSACTIONS 6 Government Contractor Quarterly Market Update Q1 2015

7 CONTACT INFORMATION SC&H CAPITAL is an investment banking advisory firm to middle market businesses. We support our investment banking activity with a full suite of strategic and financial advisory resources to help companies develop and execute strategic plans and initiatives. The firm s committed team of senior professionals average nearly 20 years of transaction advisory experience across a broad array of industries. Our holistic and customized approach to advising clients enables us to deliver unparalleled results in maximizing shareholder value and achieving strategic objectives. SC&H GROUP puts our subject matter expertise to work for clients in the following areas: Audit Services Tax Services Consulting Services Investment Banking & Advisory Services Personal Financial Planning Services AREAS OF EXPERTISE MERGERS & ACQUISITIONS Sell Side Representation Recapitalizations Buy Side Representation Management Buyouts (MBO) Capital Raises Divestitures EMPLOYEE STOCK OWNERSHIP PLANS (ESOP) ESOP Design ESOP Administration Feasibility Analysis Annual Valuations Transaction Structuring Plan Audits Transaction Financing Accounting Assistance ESOP Implementation Company Financial Statement Transaction Valuations Audits Fairness Opinions S-Corporation Tax Opinions VALUATION ADVISORY Valuations for Financial Reporting Valuations for Consulting & Other Valuations for Tax & Compliance Purposes Purposes Appraisal Services For further information on our Government Contractor Services, Baltimore, MD (410) please contact: SC&H CAPITAL McLean, VA (703) Christopher Helmrath Managing Director chelmrath@scandh.com Matthew Roberson Principal mroberson@scandh.com Greg Hogan Principal ghogan@scandh.com Kevin O Sullivan Principal kosullivan@scandh.com This communication does not represent a solicitation of an offer to sell securities. Securities offered through Stout Causey Capital Corporation, Member FINRA/ SIPC. Licensed to sell securities in California, Connecticut, District of Columbia, Maryland, Massachusetts, Missouri, North Carolina, New Jersey, New York, Pennsylvania, Tennessee, Virginia, and West Virginia. SC&H Capital is a registered trade name of Stout Causey Capital Corporation, a subsidiary of SC&H Group, Inc. SC&H Group, Inc. is a member of SC&H Group, LLC. 7 Government Contractor Quarterly Market Update Q1 2015