EXHIBIT 99.1

FOR IMMEDIATE RELEASE

For more information contact:
Cindy Roberts
Director of Investor Relations
817-224-1461
cindy.roberts@dyn-intl.com

DynCorp International Inc. Announces Fiscal 2007
Third Quarter Results

·      EBITDA increased 30.8 percent over prior year third quarter

·      Cash earnings per share increased 37.9 percent to $0.40 per share over the comparable period in 2006

·      Ending Backlog increased 120% percent to $5.8 billion during fiscal 2007

Falls Church, VA — February 7, 2007 — DynCorp International Inc. (NYSE: DCP), a provider of specialized mission-critical technical services to civilian and military government agencies, today announced results for its fiscal 2007 third quarter.

Third Quarter Results

Revenue for the 2007 third quarter was $517.5 million, down 6.5 percent from revenue for the 2006 third quarter. Government Services’ — formerly referred to as the International Technical Services segment — revenue for the third quarter decreased 9.4 percent over the comparable period in 2006.  The lower Government Services’ revenue was attributable to (1) the conclusion of protective services previously provided in Israel, Haiti, Afghanistan and central Iraq, (2) ending services in support of the Hurricane Katrina relief effort, and (3) completion of helicopter refurbishment and upgrades in support of U.S. drug eradication efforts in Afghanistan.  Revenue from the Maintenance and Technical Support Services — formerly referred to as the Field Technical Services segment — increased 0.1 percent from the 2006 third quarter.

Operating income for the 2007 third quarter increased 37.2 percent to $32.3 million from the 2006 third quarter.  Operating margin for the 2007 third quarter was 6.2 percent, compared to operating margin of 4.2 percent in the 2006 third quarter. Operating margin increased 2.0 percent of revenue primarily due to (1) improved performance on the Company’s Civilian Police program, (2) improved performance and changes to the Company’s International Narcotics and Law Enforcement Air-Wing contract, (3) increased level of effort on the Company’s Contract Field Teams program, and (4) a contract modification for construction in Afghanistan.

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Net income for the 2007 third quarter was $11.6 million, or $0.20 per share, compared to net income of $1.6 million, or $0.05 per share, for the comparable period in fiscal 2006.  The increase in 2007 third quarter net income was due to improved operating margins and lower interest expense resulting from redemption of the Company’s preferred stock during the first quarter of fiscal 2007.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the 2007 third quarter increased to $46.4 million, or 9.0 percent of revenue, from $35.3 million, or 6.4 percent of revenue, for the comparable period in fiscal 2006.  Cash earnings per share for the 2007 third quarter, which adds back special items, amortization and non-cash equity-based compensation expense, improved 37.9 percent to $0.40 per share from the comparable period in fiscal 2006.

Year-to-Date Results

Revenue for the first nine months of fiscal 2007 was $1,529.9 million, up 7.9 percent, as compared to revenue for the first nine months of fiscal 2006.  The Company’s Government Services segment generated revenue of $1,001.9 million for the first nine months of fiscal 2007, growing 11.8 percent over the comparable period in fiscal 2006.  Government Services’ revenue growth resulted primarily from drug eradication efforts in South America, aviation support for drug eradication efforts in Afghanistan, increased Police Advisors in Iraq and Afghanistan, and additional support to the U.S. Department of State in Liberia and Sudan under the Africa Peacekeeping program.  The Company’s Maintenance and Technical Support Services segment revenue increased 1.2 percent to $528.0 million as compared to the first nine months of fiscal 2006.

Operating income for the first nine months of fiscal 2007 was $70.6 million, an 11.1 percent increase over the comparable period in fiscal 2006.  Operating margin for the first nine months of fiscal 2007 was 4.6 percent, compared to 4.5 percent for the first nine months of fiscal 2006.  The increased operating income and operating margin reflect (1) strong performance from fixed price contracts such as the Civilian Police and International Narcotics and Law Enforcement Air-Wing contracts, (2) increased level of effort on the Company’s Contract Field Teams contract, and (3) the contract modification for construction in Afghanistan.

Net income for the first nine months of fiscal 2007 was $8.1 million, resulting in earnings per share of $0.15, compared to net income of $1.5 million and earnings per share of $0.05 for the first nine months of fiscal 2006.  Net income includes one-time expenses related to the Company’s initial public offering (IPO) on May 4, 2006.  After adjusting for IPO-related expense items and executive severance costs, pro forma net income for the first nine months of fiscal 2007 was $22.3 million, and pro forma earnings per share were $0.39.

Adjusted EBITDA for the first nine months of fiscal 2007 improved to $115.6 million, or 7.6 percent of revenue, compared to adjusted EBITDA of $100.5 million, or 7.1 percent of revenue, for the first nine months of fiscal 2006.  For the first nine months of fiscal 2007, cash earnings per share, which adds to pro forma earnings per share amortization and non-cash equity-based compensation expense, improved 17.3 percent to $0.95 per share.

During the first nine months of fiscal 2007, the Company generated operating cash flow of $45.8 million, which was partially offset by capital expenditures and cash used in connection with the

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Company’s IPO. Operating cash flow of $45.8 million decreased from operating cash flow of $54.2 million for the first nine months of fiscal 2006.  The prior year’s higher operating cash flow resulted from unusually high accounts receivable collections.  On December 29, 2006, the Company’s days sales outstanding were 77.0, as compared to 63.6 on December 30, 2005.

Backlog as of December 29, 2006 was $5.8 billion, including $1.2 billion in funded backlog and $4.6 billion in unfunded backlog. Estimated remaining contract value was $8.9 billion as of December 29, 2006.  Both backlog and estimated remaining contract value has increased during fiscal 2007 by $3.2 billion.  During the third quarter 2007, the U.S. Army awarded a contract to provide translation and interpretation services in support of Operation Iraqi Freedom to Global Linguist Solutions, LLC, a joint venture in which the Company has a 51 percent interest.  This contract award contributed $3.3 billion to backlog and estimated contract value.  The incumbent for this program has protested the award of the contract to Global Linguist Solutions LLC.

Fiscal 2007 Guidance

The Company provides the following guidance for its fiscal year ending March 30, 2007, based on its current backlog and management’s estimate of future contract awards.  Revenue has been reduced from a range of $2,100 - $2,200 million to a range of $2,050 - $2,100 million to reflect delays in the timing of new business.  Diluted earnings per share have been increased from $0.43 per share to $0.45 per share to reflect lower non-cash equity compensation and severance expense.

		FY 2007
Revenue		$	2,050 - $2,100	M
EBITDA		$	161.4	million
Adjusted EBITDA (1)		$	170.0	million
Diluted earnings per share		$	0.45
Pro forma diluted earnings per share (2)		$	0.71
Diluted cash earnings per share (3)		$	1.48

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(1)                 Adjusted EBITDA adds back (i) $0.8 million related to compensation expense associated with consummation of the Company’s IPO; (ii) $2.1 million of non-cash equity-based compensation expense; and (iii) $ 5.7 million of severance expense.

(2)                 This guidance excludes (i) certain severance expenses of $5.7 million; (ii) one-time expenses of $10.2 million associated with consummation of the Company’s IPO; (iii) interest expense of $2.9 million associated with the Company’s preferred stock; and (iv) interest expense of $0.8 million associated with subordinated debt retired from IPO proceeds.  The one-time IPO expenses consist of premium costs to redeem preferred stock and subordinated debt of $5.7 million and $2.7 million, respectively, the write-off of deferred financing costs of $1.0 million associated with early retirement of subordinated debt, and compensation expense of $0.8 million related to consummation of the Company’s IPO.

(3)                 Cash earnings per share represents pro forma diluted earnings per share plus add backs for amortization of customer-related intangibles (approximately $0.73 per share) and non-cash equity-based compensation (approximately $0.05 per share).

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Conference Call

The Company will host a conference call at 8:30 a.m. EST on Thursday, February 8, 2007 to discuss fiscal 2007 third quarter results.  To participate in the conference call, dial (866) 871-0758 and enter conference ID number 5954731.  International callers should dial (706) 634-5249 and enter the same conference ID number above.  A telephonic replay will be available from 9:30 a.m. EST on February 8, 2007 through 11:59 am EST on February 15, 2007.  To access the replay, please dial (800) 642-1687 or (706) 645-9291 and enter the following ID number 5954731.

About DynCorp International

DynCorp International Inc., through its operating company DynCorp International LLC, is a provider of specialized mission-critical technical services, mostly to civilian and military government agencies.  It operates major programs in law enforcement training and support, security services, base operations, aviation services and operations and logistics support worldwide. Headquartered in Falls Church, VA, DynCorp International Inc. has approximately 14,000 employees worldwide.  For more information, visit our website at www.dyn-intl.com.

Reconciliation to GAAP

In addition to the Company’s financial results reported in accordance with accounting principles generally accepted in the United States of America (GAAP) included in this press release, the Company has provided certain financial measures that are not calculated according to GAAP.  Management believes these non-GAAP financial measures are useful in evaluating operating performance and are regularly used by security analysts, institutional investors and other interested parties in reviewing the Company.  Non-GAAP financial measures are not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of the performance of other companies.

For a reconciliation of non-GAAP financial measures to the comparable GAAP financial measure and for share amounts used to derive earnings per share, please see the financial schedules accompanying this release.

Forward-looking Statements

Certain statements made in this announcement may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding the expectations of management with respect to revenue and profitability.  All of these forward-looking statements are based on estimates and assumptions made by the Company’s management that, although believed by the Company to be reasonable, are inherently uncertain.  Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental, and technological factors outside of its control that may cause its business, strategy or actual results or events to differ materially from the statements made herein.  These risks and uncertainties may include, but are not limited to, the following: changes in the demand for services the Company provides; additional work awarded under the Civilian Police and International Narcotics and Law Enforcement contracts; pursuit of new commercial business in the U.S. and abroad; activities of competitors including the filing of bid protests; changes in significant operating expenses;

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changes in availability of capital; general economic and business conditions in the U.S. and abroad; acts of war or terrorist activities; variations in performance of financial markets; and other risks detailed from time to time in the Company’s reports filed with the Securities and Exchange Commission.  Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements.  The Company’s actual results could differ materially from those contained in the forward-looking statements.  The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

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(Financial tables follow)

 

DYNCORP INTERNATIONAL INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars and shares in thousands)

		For the Three Months Ended						For the Nine Months Ended
		Dec. 29, 2006			Dec. 30, 2005			Dec. 29, 2006			Dec. 30, 2005
		(unaudited)						(unaudited)
Revenues		$	517,539		$	553,561		$	1,529,944		$	1,418,245
Cost of services (excluding depreciation and amortization disclosed below)		449,680			498,483			1,343,447			1,262,075
Selling, general and administrative		24,949			21,013			82,906			59,874
Depreciation and amortization		10,656			10,563			33,005			32,763
Operating income		32,254			23,502			70,586			63,533
Other expense (income):
Interest and other income		(1,534		)	(72		)	(2,417		)	14
Interest expense		14,554			14,594			44,057			42,278
Interest on mandatory redeemable shares		—			5,903			3,002			14,149
Loss on debt extinguishment (1)		—			—			9,201			—
Income before taxes		19,234			3,077			16,743			7,092
Provision for income taxes		7,640			1,444			8,646			5,607
Net income		$	11,594		$	1,633		$	8,097		$	1,485
Earnings per share:
Basic and diluted		$	0.20		$	0.05		$	0.15		$	0.05
Average shares outstanding:
Basic and diluted		57,000			32,000		(2)	53,978			32,000		(2)
EBITDA (3)		$	44,927		$	34,348		$	107,657		$	96,909
EBITDA margin		8.7		%	6.2		%	7.0		%	6.8		%
Adjusted EBITDA (4)		$	46,389		$	35,346		$	115,587		$	100,532
Adjusted EBITDA margin		9.0		%	6.4		%	7.6		%	7.1		%
Cash earnings per share (5)		$	0.40		$	0.29		$	0.95		$	0.81
Operating cash flow		$	(20,021	)	$	(37,610	)	$	45,787		$	54,162

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(1)                 Represents the premium associated with the redemption of all of the outstanding preferred stock, premium on the redemption of a portion of the senior subordinated notes and write-off of deferred financing costs associated with the early retirement of a portion of the senior subordinated notes.

(2)                 Shares were adjusted to reflect the 64-to-1 stock split that occurred prior to the consummation of the IPO.

(3)                 EBITDA is a primary component of certain covenants under our senior secured credit facility and is defined as net income before interest expense, income taxes, depreciation and amortization.  We believe that EBITDA is useful to investors as a way to evaluate our ability to incur and service debt, make capital expenditures and meet working capital requirements.  EBITDA does not represent net income or cash flows from operations, as these terms are defined under generally accepted accounting principles (“GAAP”), and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP.  EBITDA as presented in this press release is not necessarily comparable to similarly titled measures reported by other companies.

(4)                 Adjusted EBITDA is defined as EBITDA plus non-cash equity-based compensation, other compensation expenses of a non-recurring nature and severance related costs.  See Reconciliation of Net Income to EBITDA and Adjusted EBITDA included in the financial table in this press release.

(5)                 See Reconciliation of Pro Forma Net Income to Cash Earnings included in the financial table in this press release.

 

 

DYNCORP INTERNATIONAL INC.

PRO FORMA FINANCIAL INFORMATION

(Dollars and shares in thousands)

		Three Months Ended  Dec. 29, 2006			Adjustments			Pro Forma Three Months Ended  Dec. 29, 2006
Revenues		$	517,539		$	—		$	517,539
Cost of services (excluding depreciation and amortization disclosed below)		449,680			—			449,680
Selling, general and administrative		24,949			(990		) (1)	23,959
Depreciation and amortization		10,656			—			10,656
Operating income		32,254			990			33,244
Other expense (income):
Interest and other income		(1,534		)	—			(1,534		)
Interest expense		14,554			—			14,554
Income before taxes		19,234			990			20,224
Provision for income taxes		7,640			(177		) (2)	7,463
Net income		$	11,594		$	1,167		$	12,761
Earnings per share:
Basic and diluted		$	0.20		NA			$	0.22
Average shares outstanding:
Basic and diluted		57,000			NA			57,000

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(1)                 Reflects severance expense for former senior executive.

(2)                 Adjusts the Company’s current period effective tax rate to the Company’s sustainable effective tax rate of 36.9%.

 

 

DYNCORP INTERNATIONAL INC.

PRO FORMA FINANCIAL INFORMATION

(Dollars and shares in thousands)

		Nine Months  Ended  Dec. 29, 2006			Adjustments			Pro Forma Nine Months Ended  Dec. 29, 2006
Revenues		$	1,529,944		$	—		$	1,529,944
Cost of services (excluding depreciation and amortization disclosed below)		1,343,447			—			1,343,447
Selling, general and administrative		82,906			(6,459		) (1)	76,447
Depreciation and amortization		33,005			—			33,005
Operating income		70,586			6,459			77,045
Other expense (income):
Interest and other income		(2,417		)	—			(2,417		)
Interest expense		44,057			—			44,057
Interest on mandatory redeemable shares		3,002			(3,002		) (2)	—
Loss on debt extinguishment (3)		9,201			(9,201		)	—
Income before taxes		16,743			18,662			35,405
Provision for income taxes		8,646			4,418		(4)	13,064
Net income		$	8,097		$	14,244		$	22,341
Earnings per share:
Basic and diluted		$	0.15		NA			$	0.39
Average shares outstanding:
Basic and diluted		53,978			3,022		(5)	57,000

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(1)                 Reflects the incentive compensation expense incurred in connection with the completion of the Company’s IPO in May 2006 and the severance expense for certain former senior executives.

(2)                 Represents the decrease in interest expense related to the Company’s preferred stock redeemed in connection with the Company’s IPO.

(3)                 Represents the premium associated with the redemption of all of the outstanding preferred stock, the premium on the redemption of a portion of the senior subordinated notes and the write-off of deferred financing costs associated with the early retirement of a portion of the senior subordinated notes.

(4)                 Adjusts the Company’s current period effective tax rate to the Company’s sustainable effective tax rate of 36.9%.

(5)                 Reflects the adjustment to the shares outstanding subsequent to the IPO, which totaled 57,000.

 

DYNCORP INTERNATIONAL INC.

PRO FORMA FINANCIAL INFORMATION

(Dollars and shares in thousands)

		Three Months Ended Dec. 30, 2005			Adjustments			Pro Forma Three Months Ended Dec. 30, 2005
Revenues		$	553,561		$	—		$	553,561
Cost of services (excluding depreciation and amortization disclosed below)		498,483			—			498,483
Selling, general and administrative		21,013			—			21,013
Depreciation and amortization		10,563			—			10,563
Operating income		23,502			—			23,502
Other expense (income):
Interest and other income		(72		)	—			(72		)
Interest expense		14,594			—			14,594
Interest on mandatory redeemable shares		5,903			(5,903		) (1)	—
Income before taxes		3,077			5,903			8,980
Provision for income taxes		1,444			1,870		(2)	3,314
Net income		$	1,633		$	4,033		$	5,666
Earnings per share:
Basic and diluted		$	0.05		NA			$	0.10
Average shares outstanding:
Basic and diluted		32,000		(3)	25,000		(4)	57,000

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(1)                 Represents the decrease in interest expense related to the Company's preferred stock redeemed in connection with the Company's IPO.

(2)        Adjusts the Company's current period effective tax rate to the Company's sustainable effective tax rate of 36.9%.

(3)                 Shares were adjusted to reflect the 64-to-1 stock split that occurred prior to the consummation of the IPO.

(4)                 Represents the adjustment to the shares outstanding subsequent to the IPO, which totaled 57,000.

DYNCORP INTERNATIONAL INC.

PRO FORMA FINANCIAL INFORMATION

(Dollars and shares in thousands)

		Nine Months Ended Dec. 30, 2005			Adjustments			Pro Forma Nine Months Ended Dec. 30, 2005
Revenues		$	1,418,245		$	—		$	1,418,245
Cost of services (excluding depreciation and amortization disclosed below)		1,262,075			—			1,262,075
Selling, general and administrative		59,874			(2,625		) (1)	57,249
Depreciation and amortization		32,763			—			32,763
Operating income		63,533			2,625			66,158
Other expense (income):
Interest and other income		14			—			14
Interest expense		42,278			—			42,278
Interest on mandatory redeemable shares		14,149			(14,149		) (2)	—
Income before taxes		7,092			16,774			23,866
Provision for income taxes		5,607			3,200		(3)	8,807
Net income		$	1,485		$	13,574		$	15,059
Earnings per share:
Basic and diluted		$	0.05		NA			$	0.26
Average shares outstanding:
Basic and diluted		32,000		(4)	25,000		(5)	57,000

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(1)                 Reflects the retention bonus expense incurred in connection with the 2005 acquisition of the Company by an entity controlled by Veritas Capital Fund II, L.P. and its affiliates.

(2)                 Represents the decrease in interest expense related to the Company’s preferred stock redeemed in connection with the Company’s IPO.

(3)        Adjusts the Company’s current period effective tax rate to the Company’s sustainable effective tax rate of 36.9%.

(4)                 Shares were adjusted to reflect the 64-to-1 stock split that occurred prior to the consummation of the IPO.

(5)                 Represents the adjustment to the shares outstanding subsequent to the IPO, which totaled 57,000.

 

DYNCORP INTERNATIONAL INC.

RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA

(Dollars in thousands)

		For the Three Months Ended						For the Nine Months Ended
		Dec. 29, 2006			Dec. 30, 2005			Dec. 29, 2006			Dec. 30, 2005
		(unaudited)						(unaudited)
Net income		$	11,594		$	1,633		$	8,097		$	1,485
Provision for income taxes		7,640			1,444			8,646			5,607
Interest expense and loss on debt extinguishment		14,554			20,497			56,260			56,427
Depreciation and amortization		11,139			10,774			34,654			33,390
EBITDA		$	44,927		$	34,348		$	107,657		$	96,909
Non-cash equity-based compensation (1)		472			998			1,471			998
Compensation expenses (2)		—			—			781			2,625
Severance expenses (3)		990			—			5,678			—
Adjusted EBITDA		$	46,389		$	35,346		$	115,587		$	100,532

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(1)                 Represents non-cash equity-based compensation expense.

(2)                 Represents one-time IPO bonuses and one-time retention bonuses paid to certain members of management.

(3)                 Represents severance expense related to certain former senior executives.

 

 

DYNCORP INTERNATIONAL INC.

RECONCILIATION OF PRO FORMA NET INCOME TO CASH EARNINGS

(Dollars and shares in thousands)

		For the Three Months Ended						For the Nine Months Ended
		Dec. 29, 2006			Dec. 30, 2005			Dec. 29, 2006			Dec. 30, 2005
		(unaudited)						(unaudited)
Pro forma net income		$	12,761		$	5,666		$	22,341		$	15,059
Amortization of intangibles		9,847			10,015			30,372			30,046
Non-cash equity-based compensation		472			998			1,471			998
Cash earnings		$	23,080		$	16,679		$	54,184		$	46,103
Earnings per share:
Basic and diluted		$	0.40		$	0.29		$	0.95		$	0.81
Average shares outstanding:
Basic and diluted (1)		57,000			57,000			57,000			57,000

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(1)                 Represents the adjustment to the shares outstanding subsequent to the IPO, which totaled 57,000.

 

 

DYNCORP INTERNATIONAL INC.

OTHER CONTRACT DATA

(Dollars in millions)

		At or for the period ended
		Dec. 29, 2006			March 31, 2006
Backlog (1) :
Funded backlog		$	1,248		$	1,024
Unfunded backlog		4,553			1,617
Total backlog		$	5,801		$	2,641
Estimated remaining contract value (2)		$	8,944		$	5,727

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(1)                 Backlog consists of orders and options under our contracts.  We define contracted backlog as the estimated value of contract awards received from customers that have not been recognized as sales.  Our backlog consists of funded and unfunded backlog.  Funded backlog is based upon amounts actually appropriated by a customer for payment of goods and services less actual revenue recorded as of the measurement date under that appropriation.  Unfunded backlog is the actual dollar value of unexercised contract options.  Most of our U.S. government contracts allow the customer the option to extend the period of performance of a contract for a period of one or more years.  These options may be exercised at the sole discretion of the customer.  It has been our historical experience, however, that the customer has exercised contract options.

(2)                 Estimated remaining contract value represents the aggregate contract revenue we estimate will be earned over the remaining life of certain contracts.  When more than one company is awarded a contract for a given work requirement, we include in estimating remaining contract value only our estimate of the contract revenue we expect to earn over the remaining term of the contract.  Funded backlog is based upon amounts actually appropriated by a customer for payment for goods and services.  Because the U.S. federal government operates under annual appropriations, agencies of the U.S. federal government typically fund contracts on an incremental basis.  Accordingly, the majority of the estimated remaining contract value is not funded backlog.  Our estimated remaining contract value is based on our experience under contracts and we believe our estimates are reasonable.  However, there can be no assurance that our existing contracts will result in actual revenues in any particular period or at all.  These amounts could vary depending upon government policies, government budgets, appropriations and the outcome of protested contract awards.