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SUBJECT TO COMPLETION, DATED SEPTEMBER 24, 2004

The information in this preliminary prospectus supplement is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus supplement is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 PROSPECTUS SUPPLEMENT

(To Prospectus dated May 21, 2004)		        

3,200,000 Shares

LOGO

SI International, Inc.
Common Stock

        Of the 3,200,000 shares of common stock being offered, 2,200,000 shares are being sold by SI International, Inc. and 1,000,000 shares are being sold by the selling stockholders. SI International, Inc. will receive no proceeds from the sale of shares by the selling stockholders. Our common stock is listed on the Nasdaq National Market under the symbol "SINT." On September 23, 2004, the last reported sale price of our common stock on the Nasdaq National Market was $24.07 per share.

        Investing in our common stock involves risks. See "Risk Factors" beginning on page 3 of the accompanying prospectus.

 
   Price to Public
   Underwriting
Discounts and
Commissions
   Proceeds, Before
Expenses, to
SI International,
Inc.
   Proceeds, Before
Expenses, to the
Selling
Stockholders
Per Share   $   $   $   $
Total   $   $   $   $

        Delivery of the shares of common stock will be made on or about October     , 2004.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus are truthful or complete. Any representation to the contrary is a criminal offense.

        SI International, Inc. and the selling stockholders have granted the underwriters an option to purchase a maximum of 330,000 and 150,000 additional shares of common stock, respectively, to cover over-allotments, if any, exercisable at any time until 30 days after the date of this prospectus supplement.

  Wachovia Securities  

 
SG Cowen & Co.
 

 
Legg Mason Wood Walker
 
  Incorporated  

 
Stephens Inc.
 

 
SunTrust Robinson Humphrey
 

The date of this prospectus supplement is October     , 2004.

TABLE OF CONTENTS

Prospectus Supplement

 
   Page
About This Prospectus Supplement   S-1
Special Note Regarding Forward-Looking Statements and Market Data   S-1
Prospectus Supplement Summary   S-3
Use Of Proceeds   S-12
Dividend Policy   S-12
Price Range of Common Stock   S-12
Capitalization   S-13
Management's Discussion and Analysis of Financial Condition and Results of Operations   S-14
Selling Stockholders   S-25
Underwriting   S-26
Legal Matters   S-28
Experts   S-28
Where You Can Find More Information   S-28

Prospectus

About This Prospectus
 
2
Risk Factors   3
SI International, Inc.   18
Use of Proceeds   19
Ratios of Earnings to Fixed Charges   19
Description of Equity Securities   20
Description of Debt Securities   27
Selling Stockholders   43
Plan of Distribution   44
Legal Matters   46
Experts   46
Where You Can Find More Information   46

        You may rely on the information contained in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference therein. Neither we nor any of the underwriters has authorized anyone to provide information different from that contained in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference therein. When you make a decision about whether to invest in our common stock, you should not rely upon any information other than the information in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference therein. Neither the delivery of this prospectus supplement or the accompanying prospectus nor any sale of our common stock means that information contained in this prospectus supplement or the accompanying prospectus or any document incorporated by reference therein is correct as of any date other than its date. This prospectus supplement and the accompanying prospectus are not an offer to sell or solicitation of an offer to buy these shares of common stock in any circumstances under which the offer or solicitation is unlawful.

i


ABOUT THIS PROSPECTUS SUPPLEMENT

        Throughout this prospectus supplement, we occasionally distinguish between SI International, Inc., as a company separate from its subsidiaries, and SI International, Inc., as a company combined with its subsidiaries. In order to clarify which entity we are referring to in various discussions, in this prospectus supplement we use the terms "SI International, Inc." and "SI International" to refer to SI International, Inc. without its subsidiaries. All other references, including "SI," "we" and "us" refer to SI International and its subsidiaries.

        We generally perform our services for federal governmental agencies pursuant to both contracts and task orders. A contract may include specific work requirements for a particular job that is to be performed or may instead provide a framework that defines the scope and terms under which work may be performed in the future, in which case any task orders that may be issued from time to time under the contract set forth the specific work assignments that are to be performed under the contract. In this prospectus supplement and the accompanying prospectus and the documents incorporated by reference therein, references to any contract includes the task orders, if any, issued under that contract. Accordingly, information in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference therein regarding our revenues under governmental contracts includes revenues we receive under both contracts and task orders, and references in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference therein regarding the number of our "engagements," and similar references, means specific work that we have contracted to perform pursuant to both contracts and task orders.

        Throughout this prospectus supplement and the accompanying prospectus and the documents incorporated by reference, we use "government fiscal year" and "fiscal year" to describe the federal government's and our fiscal year, respectively, and statements with respect to our revenue or other financial statement items for a particular year, such as 2003, refer to our revenue or that item, as the case may be, for that fiscal year. The government's fiscal year runs from October 1 to September 30. Our fiscal year is based on the calendar year and ends each year on the Saturday nearest to December 31 of that calendar year, and our fiscal quarters end on the Saturday nearest to the applicable quarterly month end. As a result, our fiscal year may be comprised of 52 or 53 weeks. All fiscal years presented in this prospectus supplement include 52 weeks.

        Unless otherwise expressly stated or the context otherwise requires, all information contained in this prospectus supplement assumes that the underwriters' over-allotment option will not be exercised.


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
AND MARKET DATA

        This prospectus supplement and the accompanying prospectus contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Also, documents that we incorporate by reference into this prospectus supplement and the accompanying prospectus, including documents that we subsequently file with the Securities and Exchange Commission, or the SEC, will contain forward-looking statements. When we refer to forward-looking statements or information, sometimes we use words such as "may," "will," "could," "should," "plan," "intend," "expect," "believe," "estimate," "anticipate," "continue" and similar words. In particular, statements that we make in "Management's Discussion and Analysis of Financial Condition and Results of Operation" relating to our revenues, profitability and the sufficiency of contemplated sources of capital to meet our cash requirements, statements we make in "Prospectus Supplement Summary," with respect to certain contracts, contract bids, industry trends or future periods are forward-looking statements. Forward-looking statements are not guarantees of our future performance and involve risks, uncertainties and assumptions that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. There will likely be

S-1


events in the future that we are not able to predict and over which we have no control. You should not place undue reliance on forward-looking statements. We do not undertake any obligation to notify you if we learn that any of the forward-looking statements or the underlying assumptions are incorrect.

        The risk factors included and incorporated by reference in this prospectus supplement and the accompanying prospectus describe some of the material risks affecting our business that are known to us but are not all-inclusive, particularly with respect to possible future events. Investing in our common stock involves risks, and you should consider these risks and uncertainties carefully in evaluating any of our forward-looking statements, and before you decide to purchase our common stock. Many events can occur or fail to occur that would cause our actual results to be different from those we describe.

        Backlog is our estimate of the amount of future revenue we expect to realize over the remaining life of our awarded contracts and task orders as of the measurement date. However, there can be no assurance that we will receive the amounts we have included in our backlog as of any particular date. All statements regarding the amount of our backlog are forward-looking statements and are subject to the risks and uncertainties described above and elsewhere in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference therein.

        In addition, this prospectus supplement and the accompanying prospectus and the documents incorporated by reference therein contain forecasts and estimates regarding the information technology market and federal government's spending and workforce and related matters, including estimates regarding projected growth in the federal government's information technology spending, projected federal government appropriations for homeland security, intelligence, national defense and similar matters, the projected increase in outsourcing by the federal government, the aging and projected retirement of the federal government's civilian workforce and employee turnover rates at other companies in our industry. This prospectus supplement and the accompanying prospectus and the documents incorporated by reference therein also include historical information regarding information technology expenditures by the federal government, time required to procure products and services by the federal government, the decline in federal government workforce and other matters relating to the information technology market and federal government procurement. These forecasts and estimates and this historical data have been derived from publicly available information, industry publications and data compiled by independent market research firms. Although we believe this information is reliable, we have not independently verified this information and we cannot assure you that it is accurate or that the forecasts will prove correct.

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PROSPECTUS SUPPLEMENT SUMMARY

        The following is only a summary. It should be read together with the more detailed information included elsewhere in this prospectus supplement and the accompanying prospectus and other documents incorporated by reference herein and therein. In addition, important information is incorporated by reference into this prospectus supplement and the accompanying prospectus.


The Company

        We are a provider of information technology and network solutions primarily to the federal government. Our clients include the U.S. Air Force Space Command, the Department of State, the Federal Retirement Thrift Investment Board, the U.S. Army, the Department of Homeland Security, the Department of Agriculture, the U.S. Navy, the National Institutes of Health and the intelligence community. In addition, we provide our services to a small number of commercial entities. We combine our technology and industry expertise to provide a full spectrum of state-of-the-practice solutions and services, from design and development to implementation and operations, to assist our clients in achieving their missions. We provide information technology and network solutions in the following eight practice areas to reinforce our clients' operations in defense transformation, homeland defense, mission-critical outsourcing and federal information technology modernization.

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        Our business is guided by our experienced team of six executive officers, who have an average of 19 years of executive level experience in our industry. Our next level of senior management is comprised of seven individuals who have an average of 28 years of experience in managing government information technology businesses. As of June 26, 2004, we employed approximately 1,900 employees. As of July 16, 2004, approximately 67% of our employees hold federal government security clearances or have passed National Agency Checks that allow us to bid on and perform classified work for the federal government. In addition, as of July 16, 2004, over 19% of our employees hold Top Secret security clearances. A significant portion of our employees who hold Top Secret security clearances also hold Sensitive Compartmental Information clearances, which permit us to bid on highly classified projects.

        Our broad set of contract vehicles gives us extensive reach and enables us to deliver a full range of our services and solutions to the federal government. As of June 26, 2004, we had approximately 500 active engagements. The strength of our service offerings and information technology expertise allows us to maintain substantial relationships with clients, some of whom have been clients of ours, or of one of our acquired businesses, for over 15 years. For the six months ended June 26, 2004, we derived approximately 79.9% of our revenue from contracts on which we acted as prime contractor. Acting as a prime contractor provides us with stronger client relationships and visibility and access to new work that are not available when acting as a subcontractor.

        Our largest client is the Department of Defense. For the six months ended June 26, 2004, we derived approximately 51.2% of our total revenue from the Department of Defense and the intelligence community. For the six months ended June 26, 2004, the services we provided to federal civilian agencies accounted for approximately 45.1% of our total revenue and the remainder of our total revenue in that period was generated from commercial clients. A key Department of Defense customer for us is the U.S. Air Force Space Command, which, for the six months ended June 26, 2004, accounted for 23.0% of our total revenue and consisted of approximately 240 separate engagements. For the six months ended June 26, 2004, we derived approximately 13.5% of our revenue from the Department of State. Each of these entities consists of a substantial number of separate offices, each of which typically exercises

S-4


independent decision making and funding authority. We believe our contract base among these separate offices is well diversified.

        Our backlog as of June 26, 2004 was $703 million, including $100.0 million in funded backlog and $603 million in unfunded backlog. Backlog as of the end of the second quarter of our fiscal 2004 increased 131.0% from $304 million reported at the end of the same period in fiscal 2003.

        Our principal executive offices are located at 12012 Sunset Hills Road, Reston, Virginia 20190, and our telephone number is (703) 234-7000.


Our Market Opportunity

        The ongoing modernization of the federal government's information systems and communication networks, the wars in Iraq and Afghanistan and homeland security requirements are creating an increase in its demand for information technology services. INPUT, an independent market research firm, anticipates that information technology's share of the U.S. budget will accelerate over the next five years, reaching nearly 8.0% by government fiscal year 2009. According to INPUT, federal government information technology spending that is contracted out by the federal government is projected to increase by $22.1 billion from $58.6 billion in government fiscal 2004 to $80.7 billion in government fiscal 2009, a compound annual growth rate of approximately 6.6%. In addition, the U.S. Air Force addressable spending, which is the amount that is contracted out, is projected by INPUT to grow from $4.3 billion in government fiscal 2004 to $6.8 billion in government fiscal 2009, representing a compounded annual growth rate of 9.6%.

        We expect that the federal government's need for the types of information technology services that we provide will continue to grow in the foreseeable future, as a result of the high priority placed by the federal government on the transformation of its information technology programs. INPUT forecasts that the percentage of information technology spending that is contracted out by the federal government will reach a high of 86% of total information technology spending in government fiscal 2009.

        We believe the following industry trends will also continue to drive the federal government technology services market:

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S-6


Our Core Strengths

        We strategically built our business to respond specifically to the federal information technology marketplace. We believe that our core strengths position us to respond to the long-term trends and changing demands of our market.

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Our Growth Strategy

        We are implementing the following strategies in order to reach our goal of becoming a leading provider of information technology and network solutions to our clients:

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Recent Developments

        National Visa Center Contract Extension.    On September 14, 2004, we received an extension of the period of performance and an increase in the contract ceiling value relating to our National Visa Center, or NVC, contract with the Department of State. The expiration date of the NVC contract was extended from September 30, 2004 to December 31, 2004, and the contract ceiling amount was increased by $7.2 million from $88.0 million to $95.2 million. The NVC contract supports federal government operations at the National Visa Center and Kentucky Consular Center. We are the incumbent on this contract and have submitted our proposal in response to the solicitation for the follow-on contract to the NVC contract.


The Offering

Common stock offered by SI International, Inc.   2,200,000 shares(1)

Common stock offered by the selling stockholders
 
1,000,000 shares(1)

Common stock to be outstanding after the offering
 
10,683,814 shares(2)

Use of proceeds
 
For the repayment of debt and other general corporate purposes.

Risk factors
 
Please read "Risk Factors" beginning on page 3 of the accompanying prospectus and the other information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus for a discussion of some of the risks that prospective purchasers of our common stock should consider.

Nasdaq National Market symbol
 
SINT
(1)
Assumes no exercise by the underwriters of their 480,000 share over-allotment option.
(2)
Based upon the number of shares of common stock outstanding as of August 20, 2004. Excludes, as of June 26, 2004, 1,454,679 shares of common stock that we may issue upon exercise of outstanding stock options at a weighted average exercise price of $14.40 per share and 382,046 additional shares of common stock reserved and available for issuance under our 2002 stock incentive plan plus annual increases in the number of shares that will be reserved for issuance under that plan.

S-9


Summary Historical and Pro Forma Consolidated Financial Data

        The following summary historical financial data for the six months ended June 26, 2004 and our 2001, 2002 and 2003 fiscal years, and as of June 26, 2004 and the end of our 2002 and 2003 fiscal years, is derived from our audited consolidated financial statements included in the documents incorporated by reference in the accompanying prospectus. The following summary historical financial data for our 1999 and 2000 fiscal years and as of the end of our 1999, 2000 and 2001 fiscal years is derived from our audited consolidated financial statements not included in this prospectus supplement or the accompanying prospectus or the documents incorporated by reference in the accompanying prospectus.

        The following summary unaudited pro forma financial data for our 2003 fiscal year and as of the end of our 2003 fiscal year gives effect to our purchase of MATCOM, which occurred on January 21, 2004. The acquisition has been accounted for using the purchase method in accordance with Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations. The unaudited pro forma balance sheet information as of December 27, 2003 presents our financial position as if the acquisition of MATCOM occurred on December 27, 2003. The unaudited pro forma statement of operations information for the fiscal year ended December 27, 2003 has been prepared as if that acquisition had occurred on December 29, 2002. You should read the summary historical financial data in conjunction with our consolidated financial statements, the notes to our consolidated financial statements and the pro forma financial statements and notes thereto contained in documents incorporated by reference in the accompanying prospectus, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus supplement.

        The following summary unaudited pro forma financial data is subject to a number of estimates, assumptions and uncertainties and does not purport to reflect the financial condition or results of operations that would have existed or occurred had our acquisition of MATCOM taken place on the dates indicated, nor does it purport to reflect our future financial condition or results of operations. The pro forma financial data does not reflect certain contingent purchase consideration which, if earned, would be recorded as additional goodwill. You should read the summary unaudited pro forma financial data in conjunction with our Current Report on Form 8-K filed January 28, 2004, as amended on Form 8-K/A filed on March 17, 2004 incorporated by reference in the accompanying prospectus.

        This financial data is only a summary and does not provide all of the information contained in our consolidated financial statements, including the related notes, or the pro forma financial statements, including the related notes included in the documents incorporated by reference in the accompanying prospectus. This financial data is not necessarily indicative of our future results of operations or financial position.

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   Fiscal Year
   Six Months Ended
  
 
   Historical
   Pro Forma
    
    
  
 
   June 28,
2003
   June 26,
2004
  
 
   1999
   2000
   2001
   2002
   2003
   2003
  
 
    
    
    
    
    
   (unaudited)

   (unaudited)

   (unaudited)

  
 
   (dollars in thousands, except per share data)

  
Statement of Operations Data:                                                  
Revenue   $ 33,891   $ 120,580   $ 146,583   $ 149,351   $ 168,287   $ 238,474   $ 82,048   $ 119,784  
   
 
 
 
 
 
 
 
 
Costs and expenses:                                                  
  Direct costs     20,731     71,868     87,071     91,240     101,940     144,858     49,290     72,330  
  Indirect costs     11,646     40,509     49,495     49,404     51,569     71,643     26,330     36,358  
  Depreciation and amortization     198     992     1,653     1,988     2,009     2,534     998     1,187  
  Amortization of intangible assets     517     3,088     3,586     —     —     1,018     —     306  
   
 
 
 
 
 
 
 
 
    Total operating expenses     33,092     116,457     141,805     142,632     155,518     220,053     76,618     110,181  
   
 
 
 
 
 
 
 
 
Income from operations     799     4,123     4,778     6,719     12,769     18,421     5,430     9,603  
Other income (expense)     2     (157 )   —     —     —     —     —     —  

Interest expense
 
 
(419
)
 
(4,023
)
 
(3,451
)
 
(3,319
)
 
(606
)
 
(2,966
)
 
(308
)
 
(1,272
)
Minority interests     —     —     (144 )   (118 )   —     —     —     —  
Change in fair value of put warrants     —     (265 )   (1,255 )   640     —     —     —     —  
   
 
 
 
 
 
 
 
 
Income (loss) before provision for income taxes     382     (322 )   (72 )   3,922     12,163     15,455     5,122     8,331  
Provision for income taxes     271     424     657     1,439     4,784     6,131     2,024     3,291  
   
 
 
 
 
 
 
 
 
Net income (loss)     111     (746 )   (729 )   2,483     7,379     9,324     3,098     5,040  
Dividends on redeemable cumulative preferred stock     251     1,505     2,052     1,954     —     —     —     —  
   
 
 
 
 
 
 
 
 
Net income (loss) attributable to common stockholders   $ (140 ) $ (2,251 ) $ (2,781 ) $ 529   $ 7,379   $ 9,324   $ 3,098   $ 5,040  
   
 
 
 
 
 
 
 
 

Earnings (loss) per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Basic earnings (loss) per share   $ (0.06 ) $ (0.86 ) $ (1.06 ) $ 0.16   $ 0.87   $ 1.10   $ 0.37   $ 0.60  
  Diluted earnings (loss) per share     (0.06 )   (0.86 )   (1.06 )   (0.03 )   0.87     1.10     0.37     0.56  

Balance Sheet Data (at end of fiscal period):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents   $ 218   $ 198   $ 470   $ 10,856   $ 23,252   $ 7,285   $ 16,646   $ 256  
Working capital     (4,258 )   9,599     16,103     29,937     39,708     6,136     34,073     13,188  
Total assets     31,380     82,970     80,461     92,315     106,627     171,389     91,991     172,801  
Total debt, including capital lease obligations     14,559     39,595     40,082     658     530     61,530     475     46,461  
Total stockholders' equity (deficit)     2,601     350     (2,431 )   73,977     81,547     81,547     77,146     86,938  

Other Financial Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  EBITDA(1)   $ 1,516   $ 8,046   $ 10,017   $ 8,707   $ 14,778   $ 21,973   $ 6,428   $ 11,096  
  Capital expenditures     267     1,884     2,577     1,653     1,291     1,822     786     803  
  Net cash provided by (used in) operations     (116 )   (874 )   1,697     5,680     16,079     —     8,956     (4,014 )
  Net cash used in investing activities     (16,701 )   (36,215 )   (2,577 )   (1,653 )   (1,291 )   —     (786 )   (66,868 )
  Net cash provided by (used in) financing activities     16,931     37,069     1,152     6,359     (2,392 )   —     (2,380 )   47,886  
(1)
EBITDA, a non-GAAP financial measure, is defined as GAAP net income (loss) plus interest expense, income taxes, depreciation and amortization, change in the value of put warrants and minority interest. EBITDA as calculated by us may be calculated differently than EBITDA for other companies. We have provided EBITDA because we believe it is a commonly used measure of financial performance in comparable companies and is provided to help investors evaluate companies on a consistent basis, as well as to enhance an understanding of our operating results. EBITDA should not be construed as either an alternative to net income (loss), as an indicator of our operating performance; or as an alternative to cash flows as a measure of liquidity.


Reconciliations of net income (loss) to EBITDA are as follows:

 
    
    
    
    
    
    
   Six Months Ended
 
   Fiscal Year
 
   Historical
   Pro Forma
    
    
 
   June 28,
2003
   June 26,
2004
 
   1999
   2000
   2001
   2002
   2003
   2003
 
    
    
    
    
    
   (unaudited)

   (unaudited)

   (unaudited)
 
   (dollars in thousands)
Net income (loss)   $ 111   $ (746 ) $ (729 ) $ 2,483   $ 7,379   $ 9,324   $ 3,098   $ 5,040
Interest expense     419     4,023     3,451     3,319     606     2,966     308     1,272
Provision for income taxes     271     424     657     1,439     4,784     6,131     2,024     3,291
Depreciation and amortization     198     992     1,653     1,988     2,009     2,534     998     1,187
Amortization of intangible assets     517     3,088     3,586     —     —     1,018     —     306
Change in fair value of put warrants     —     265     1,255     (640 )   —     —     —     —
Minority interests     —     —     144     118     —     —     —     —
   
 
 
 
 
 
 
 
EBITDA   $ 1,516   $ 8,046   $ 10,017   $ 8,707   $ 14,778   $ 21,973   $ 6,428   $ 11,096
   
 
 
 
 
 
 
 

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USE OF PROCEEDS

        We estimate that our net proceeds from the sale of shares of common stock we are offering will be approximately $            million after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares by the selling stockholders, including any shares sold by the selling stockholders upon exercise of the underwriters' over-allotment option.

        We intend to use a portion of our net proceeds from the offering to repay $         million aggregate principal amount of the term loan borrowings and $         million of the revolving credit facility borrowings under our existing credit facility, plus accrued and unpaid interest. As of September 23, 2004, we had approximately $43.0 million of borrowings outstanding under this credit facility, of which $27.0 million is comprised of a term loan and the remainder of a revolving credit facility. The borrowings outstanding under this credit facility bore interest at a weighted average rate of 5.7% annually. Borrowings under the credit facility were used to finance a portion of the purchase price of MATCOM in January 2004. Borrowings under the revolving credit facility that we repay with proceeds of this offering may be reborrowed, subject to customary conditions. An affiliate of Wachovia Capital Markets, LLC is a lender under our credit facility and will receive a pro rata portion or any proceeds used to reduce borrowings outstanding under the credit facility.

        We intend to use the remaining net proceeds we receive from this offering to either repay the remaining term loan borrowings or for other general corporate purposes, which may include financing all or a portion of the purchase price of other businesses. Although we continually evaluate acquisition opportunities, we currently do not have any definitive agreements to acquire any other company or business. Pending their use, we plan to invest the net proceeds in short-term marketable securities.


DIVIDEND POLICY

        We have not paid or declared any cash dividends on our common stock since our inception, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain all future earnings, if any, to support our growth strategy. The terms of our current credit facility place restrictions on our ability to pay dividends on our capital stock.


PRICE RANGE OF COMMON STOCK

        Since November 12, 2002, our common stock has been publicly traded on the Nasdaq National Market under the symbol "SINT." Prior to November 12, 2002, our common stock was not publicly traded. The high and low sales prices of our common stock for the time period indicated below, as reported by the Nasdaq National Market, were:

 
   Price per Share
 
   High
   Low
Year Ended December 28, 2002            
Fourth quarter (from November 12, 2002)   $ 14.20   $ 10.20

Year Ended December 27, 2003
 
 
 
 
 
 
First quarter   $ 12.38   $ 6.75
Second quarter   $ 13.23   $ 7.47
Third quarter   $ 19.89   $ 12.45
Fourth quarter   $ 20.90   $ 14.25

Year Ended December 25, 2004
 
 
 
 
 
 
First quarter   $ 24.00   $ 16.41
Second quarter   $ 27.85   $ 21.16
Third quarter (through September 23, 2004)   $ 24.17   $ 17.41

        As of September 23, 2004, the closing price of our common stock was $24.07.

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CAPITALIZATION

        The following table sets forth our capitalization as of June 26, 2004:

        This table excludes:


 
   As of June 26, 2004
 
   Actual
   As Adjusted
 
   (dollars in thousands)
Line of Credit   $ 16,000   $  
Current portion of long-term debt     4,500      
   
 
  Total current portion of long-term debt and line of credit   $ 20,500   $  
   
 

Long-term debt, net of current portion
 
$
25,500
 
$
 
   
 
Stockholders' equity:            
  Preferred stock, $0.01 par value, 10,000,000 shares authorized; no shares issued and outstanding, actual or as adjusted for this offering     —     —
  Common stock, $0.01 par value, 50,000,000 shares authorized; 8,478,311 shares issued and outstanding, actual; and 10,678,311 shares issued and outstanding, as adjusted for this offering     85      
  Additional paid-in capital     75,989      
  Deferred compensation     (274 )    
  Retained earnings     11,138      
   
 
Total stockholders' equity     86,938      
   
 
Total capitalization   $ 112,438   $  
   
 

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

        The following discussion and analysis should be read in conjunction with the historical financial data contained in "—Summary Historical and Pro Forma Consolidated Financial Data" and our consolidated financial statements and related notes included in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference herein and therein.

Overview

        We are, first and foremost, a provider of information technology and network solutions to the federal government. Prior to the acquisition of MATCOM, our clients included the U.S. Air Force Space Command, the Department of State, the U.S. Army, the Department of Homeland Security, the Department of Agriculture, the U.S. Navy and the intelligence community. The addition of MATCOM will allow us to continue to support our existing customer base, while strengthening our position with the U.S. Army, U.S. Navy, U.S. Air Force Electronic Systems Center and U.S. Department of Agriculture, and opened the new client relationships with the Federal Retirement Thrift Investment Board and National Institutes of Health. We combine our technology and industry expertise to provide a full spectrum of state-of-the-practice solutions and services, from design and development to implementation and operations, which assist our clients in achieving mission success.

        During 2003, we experienced growth in our key focus areas. The share of our revenues attributable to the Department of Defense continued to grow more rapidly than our total revenues, which can be attributed to two primary drivers. The Department of Defense budget was approved well before its civilian budget counterparts, and the push for defense transformation increased during our fiscal year 2003. The Department of Defense budget imperative has been a catalyst for early adoption of the defense appropriation legislation and a smoother allocation of the associated funding. This process has allowed our customers to effectively execute their information technology and network solution plans. As a result of our acquisition of MATCOM in January 2004, the percentage of our revenues attributable to the Department of Defense for the six months ended June 26, 2004 decreased slightly from the same period in 2003.

        Virtually all of the Department of Defense programs in which we are engaged either directly support or are closely related to defense transformation goals. However, we will continue to segment our focus areas in terms of defense transformation, homeland defense, mission-critical outsourcing and federal information technology modernization. It is important that we reflect our customer's evolving priorities through our characterization of the programs in each focus area.

        In fiscal 2003 and the six months ended June 26, 2004, we received 93.7% and 96.3%, respectively, of our revenues from services we provided to various departments and agencies of the federal government, both directly and as a subcontractor for other prime contractors, and 6.3% and 3.7%, respectively, of our total revenues from work performed for commercial entities. The following table shows our revenues from the client groups listed as a percentage of total revenue. Revenue data for the Department of Defense includes revenue generated from work performed under engagements for both the Department of Defense and the intelligence community.

 
   Fiscal Year
   Six Months Ended
  
 
   2001
   2002
   2003
   June 28, 2003
   June 26, 2004
  
Department of Defense   45.0 % 49.0 % 54.5 % 52.6 % 51.2 %
Federal civilian agencies   43.4   43.9   39.2   40.8   45.1  
Commercial entities   11.6   7.1   6.3   6.6   3.7  
   
 
 
 
 
 
Total revenue   100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
   
 
 
 
 
 

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        We have derived a substantial majority of our revenues from governmental contracts under which we act as a prime contractor. We also provide services indirectly as a subcontractor. We intend to focus on retaining and increasing the percentage of our business as prime contractor because it provides us with stronger client relationships. However, primarily as a result of our acquisition of MATCOM in January 2004, the percentage of our revenues derived as prime contractor for the six months ended June 26, 2004 decreased slightly from the same period in 2003. The following table shows our revenues as prime contractor and as subcontractor as a percentage of our total revenue for the following periods:

 
   Fiscal Year
   Six Months Ended
  
 
   2001
   2002
   2003
   June 28, 2003
   June 26, 2004
  
Prime contract revenue   82.1 % 82.9 % 84.3 % 83.0 % 79.9 %
Subcontract revenue   17.9   17.1   15.7   17.0   20.1  
   
 
 
 
 
 
Total revenue   100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
   
 
 
 
 
 

        Our services are provided under three types of contracts: cost reimbursable, time and materials and fixed price contracts. The following table shows our revenues from each of these types of contracts as a percentage of our total revenue for the following periods:

 
   Fiscal Year
   Six Months Ended
  
 
   2001
   2002
   2003
   June 28, 2003
   June 26, 2004
  
Cost reimbursable   39.7 % 40.6 % 38.3 % 37.4 % 25.6 %
Time and materials   41.4   42.1   35.1   37.2   49.0  
Fixed price   18.9   17.3   26.6   25.4   25.4  
   
 
 
 
 
 
Total   100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
   
 
 
 
 
 

        Under cost reimbursable contracts, we are reimbursed for costs that are determined to be reasonable, allowable and allocable to the contract and paid a fee representing the profit margin negotiated between us and the contracting agency, which may be fixed or performance based. Under cost reimbursable contracts we recognize revenues and an estimate of applicable fees earned as costs are incurred. We consider fixed fees under cost reimbursable contracts to be earned in proportion to the allowable costs incurred in performance of the contract. For performance-based fees under cost reimbursable contracts, we recognize the relevant portion of the expected fee to be awarded by the client at the time such fee can be reasonably estimated, based on factors such as our prior award experience and communications with the client regarding performance. In general, cost reimbursable contracts are the least profitable of our government contracts. Primarily as a result of our acquisition of MATCOM in January 2004, the percentage of our revenues for the six month period ended June 26, 2004 derived from cost reimbursable contracts decreased significantly, approximately 31.6% from the same period in 2003.

        Under time and materials contracts, we are reimbursed for labor at fixed hourly rates and generally reimbursed separately for allowable materials, costs and expenses. To the extent that our actual labor costs under a time and materials contract are higher or lower than the billing rates under the contract, our profit under the contract may either be greater or less than we anticipated or we may suffer a loss under the contract. We recognize revenues under time and materials contracts by multiplying the number of direct labor hours expended by the contract billing rates and adding the effect of other billable direct costs. In general, we realize a higher profit margin on work performed under time and materials contracts than cost reimbursable contracts. Primarily as a result of the acquisition of MATCOM in January 2004, the percentage of our revenues for the six month period ended June 26, 2004 derived from time and materials contracts increased significantly, approximately 31.7% from the same period in 2003.

        Under fixed price contracts, we perform specific tasks for a fixed price. Compared to cost reimbursable and time and materials contracts, fixed price contracts generally offer higher profit margin opportunities but involve greater financial risk because we bear the impact of cost overruns in return for

S-15


the full benefit of any cost savings. We generally do not undertake complex, high-risk work, such as long-term software development, under fixed price terms. Fixed price contracts may include either a product delivery or specific service performance over a defined period. Revenue on fixed price contracts that provide for us to render services throughout a period is recognized as earned according to contract terms as the service is provided on a proportionate performance basis. These contracts are generally less than six months in duration. For fixed price contracts that provide for the delivery of a specific product with related customer acceptance provisions, revenues are recognized as those products are delivered and accepted. The percentage of our revenues for the six month period ended June 26, 2004 derived from fixed price contracts did not change from the same period in 2003.

        If we anticipate a loss on a contract, we provide for the full amount of anticipated loss at the time of that determination.

        Our most significant expense is direct cost, which consists primarily of direct labor costs for program personnel and direct expenses incurred to complete contracts, including cost of materials and subcontract efforts. Our ability to predict accurately the number and types of personnel, their salaries, and other costs, can have a significant impact on our direct cost.

        The allowability of certain direct and indirect costs in federal contracts is subject to audit by the client, usually through the Defense Contract Audit Agency. Certain indirect costs are charged to contracts and paid by the client using provisional, or estimated, indirect rates, which are subject to later revision, based on the government audits of those costs.

        We actively monitor our relationships with our clients during our engagements, as well as the quality of the service we provide, to assist in our efforts to win recompetition bids. In addition, we strive to maintain good relationships with a wide variety of government contractors.

Results of Operations

        The following table sets forth certain items from our consolidated statements of operations as a percentage of revenues for the periods indicated.

 
   Fiscal Year
   Six Months Ended
  
 
   2001
   2002
   2003
   June 28, 2003
   June 26, 2004
  
Revenue   100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Costs and expenses:                      
  Direct costs   59.4   61.1   60.6   60.1   60.4  
  Indirect costs   33.8   33.1   30.6   32.1   30.3  
  Depreciation   1.1   1.3   1.2   1.2   1.0  
  Amortization   2.4   —   —   —   0.3  
   
 
 
 
 
 
    Total operating expenses   96.7   95.5   92.4   93.4   92.0  
   
 
 
 
 
 
Income from operations   3.3   4.5   7.6   6.6   8.0  
Interest expense   (2.4 ) (2.2 ) (0.4 ) (0.4 ) (1.1 )
Minority interests   (0.1 ) (0.1 ) —   —   —  
Change in fair value of put warrants   (0.8 ) 0.4   —   —   —  
   
 
 
 
 
 
Income before provision for income taxes   —   2.6   7.2   6.2   6.9  
Provision for income taxes   0.5   1.0   2.8   2.5   2.7  
   
 
 
 
 
 
Net income (loss)   (0.5 )% 1.6 % 4.4 % 3.7 % 4.2 %
   
 
 
 
 
 

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Six months ended June 26, 2004 compared with six months ended June 28, 2003

        Revenue.    For the six months ended June 26, 2004, our revenues increased 46.0% to $119.8 million from $82.0 million for the same period in 2003. Revenues from work under federal government contracts increased 50.4% to $115.4 million from $76.6 million for the same period in 2003. This increase was attributable primarily to increased activities in our outsourcing, applications development and network solutions services. Commercial revenues decreased 19.0% to $4.4 million in the six months ended June 26, 2004 from $5.4 million for the same period in 2003. The decrease was attributable primarily to an increase in our focus on federal government support.

        Direct costs.    Direct costs include direct labor and other costs such as materials and subcontracts. Generally, changes in direct costs are correlated to changes in revenue as resources are consumed in the production of that revenue. For the six months ended June 26, 2004, direct costs increased 46.7% to $72.3 million from $49.3 million for the same period in 2003. This increase was attributable primarily to the increase in revenue. As a percentage of revenue, direct costs were 60.4% for the six months ended June 26, 2004 as compared to 60.1% for the same period in 2003.

        Indirect costs.    Indirect costs include facilities, selling, bid and proposal, indirect labor, fringe benefits and other discretionary costs. For the six months ended June 26, 2004, indirect costs increased 38.1% to $36.4 million from $26.3 million for the same period in 2003. This increase was primarily attributable to the expected growth of support functions necessary to facilitate and administer the growth in direct costs as well as the integration of MATCOM and the growth in our sales and marketing efforts. As a percentage of revenue, indirect costs were 30.3% for the six months ended June 26, 2004 as compared to 32.1% for the same period in 2003.

        Depreciation.    For the six months ended June 26, 2004, depreciation increased by 20.0% to $1.2 million from $1.0 million for the same period in 2003. As a percentage of revenue, depreciation was 1.0% for the six months ended June 26, 2004 as compared to 1.2% for the same period in 2003.

        Amortization of intangible assets.    For the six months ended June 26, 2004, amortization of intangible assets increased to $0.3 million from $0.0 for the same period in 2003. This increase was attributed to the acquisition of MATCOM on January 21, 2004. We use an accelerated method of amortization.

        Income from operations.    For the six months ended June 26, 2004, income from operations increased 76.9% to $9.6 million from $5.4 million for the same period in 2003. This increase was attributable primarily to increased revenue. As a percentage of revenue, income from operations was 8.0% for the six months ended June 26, 2004 compared to 6.6% for the same period in 2003.

        Interest expense.    For the six months ended June 26, 2004, interest expense increased 313.0% to $1.27 million from $0.31 million for the same period in 2003. This increase was attributable primarily to increased borrowings under our credit facility made in connection with the acquisition of MATCOM. As a percentage of revenue, interest expense was 1.1% for the six months ended June 26, 2004 as compared to 0.4% for the same period in 2003. We anticipate interest expense to remain at higher levels throughout fiscal year 2004 as compared to the same periods in 2003.

        Provision for/benefit from income taxes.    The provision for income tax was $3.3 million for the six months ended June 26, 2004, compared to $2.0 million for the same period in 2003. For both the six months ended June 26, 2004 and June 28, 2003, we recorded an expense for income tax, which reflects an effective tax rate of 39.5%.

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Fiscal year 2003 compared with fiscal year 2002

        Revenue.    For the fiscal year ended December 27, 2003, our revenues increased 12.7% to $168.3 million from $149.4 million for the same period in 2002. Revenues from work under federal government contracts increased 13.6% to $157.7 million from $138.8 million for the same period in 2002. This increase was attributable to new contract awards, successful recompetition wins on existing programs and growth within existing programs in our four focus areas: defense transformation, homeland defense, mission-critical outsourcing and federal information technology modernization. Commercial and other revenues decreased 0.9% to $10.6 million in 2003 from $10.6 million in 2002. This decrease was attributable to our continued focus on opportunities for the federal government.

        Direct costs.    Direct costs include direct labor and other direct costs such as materials and subcontracts. Generally, changes in direct costs are correlated to changes in revenue as resources are consumed in the production of that revenue. For fiscal 2003, direct costs increased 11.7% to $101.9 million from $91.2 million for fiscal 2002. This increase was attributable primarily to the increase in revenue. As a percentage of revenue, direct costs were 60.6% for fiscal 2003 as compared to 61.1% for fiscal 2002.

        Indirect costs.    Indirect costs include facilities, selling, bid and proposal, indirect labor, fringe benefits and other discretionary costs. For fiscal 2003, indirect costs increased 4.4% to $51.6 million from $49.4 million for the same period in 2002. This $2.2 million increase was primarily attributable to the expected growth of support functions necessary to facilitate and administer the growth in direct costs.

        Depreciation.    For fiscal 2003, depreciation increased by 1.1% to $2.01 million from $1.99 million for the same period in 2002. As a percentage of revenue, depreciation was 1.2% for fiscal 2003 as compared to 1.3% for the same period in fiscal 2002.

        Amortization.    In compliance with SFAS 142, Goodwill and Other Intangible Assets, we discontinued the amortization of goodwill effective December 30, 2001. Accordingly, there was no amortization for the fiscal years ended December 27, 2003 and December 28, 2002.

        Income from operations.    For fiscal 2003, income from operations increased 90.0% to $12.8 million from $6.7 million for the same period in 2002. This increase was attributable primarily to the decrease of both direct and indirect costs as a percentage of revenue. As a percentage of revenue, income from operations was 7.6% for fiscal 2003 as compared to 4.5% in fiscal 2002. We anticipate continued improvement in our operating margin.

        Interest expense.    For fiscal 2003, interest expense declined 81.7% to $0.6 million from $3.3 million for the same period in 2002. This decline was attributable primarily to the repayment of debt following our initial public offering in November 2002. As a percentage of revenue, interest expense was 0.4% for fiscal 2003 as compared to 2.2% for the same period in fiscal 2002. We anticipate an increase in interest expense in fiscal year 2004 from fiscal year 2003 due to amounts borrowed under our current credit facility in connection with the acquisition of MATCOM.

        Provision for income taxes.    The provision for income tax was $4.8 million in fiscal 2003, compared to a provision of $1.4 million for the comparable period in 2002. Our fiscal year 2003 tax provision represents an effective tax rate of 39.3%. Our fiscal 2002 tax provision represents an effective tax rate of 36.7%. Our effective tax rate is greater than the federal statutory rate of 34% due primarily to state income tax rates.

        Dividends.    For fiscal year 2003, dividends on cumulative preferred stock decreased to $0.0 from $2.0 million for fiscal year 2002. This decrease was attributable to the conversion of preferred stock to common stock on November 12, 2002 in connection with our initial public offering.

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Fiscal year 2002 compared to fiscal year 2001

        Revenue.    For the fiscal year ended December 28, 2002, our revenues increased 1.9% to $149.4 million from $146.6 million for the same period in 2001. Revenues from work under federal government contracts increased 7.1% to $138.8 million from $129.6 million for the same period in 2001. This increase was attributable primarily to an increase in our information technology and network solutions services provided to our federal government customers. As anticipated, commercial and other revenues decreased 37.6% to $10.6 million in 2002 from $17.0 million in 2001. This decrease was attributable to our continuing de-emphasis of marketing activities in the commercial sector. The decrease in our commercial work was largely the result of decreased spending by our customers in the commercial telecom market and the petroleum reservoir modeling business. Consistent with our decision in June 2002 to merge SI Telecom back into SI International and our decision to de-emphasize our petroleum business, we have concentrated on our core federal government contracting business.

        Direct costs.    Direct costs include direct labor and other direct costs such as materials and subcontracts. Generally, changes in direct costs are correlated to changes in revenue as resources are consumed in the production of that revenue. For fiscal 2002, direct costs increased 4.7% to $91.2 million from $87.1 million for fiscal 2001. This increase was attributable primarily to the increase in revenue. As a percentage of revenue, direct costs were 61.1% for fiscal 2002 as compared to 59.4% for fiscal 2001.

        Indirect costs.    Indirect costs include facilities, selling, bid and proposal, indirect labor, fringe benefits and other discretionary costs. For fiscal 2002, indirect costs decreased 0.2% to $49.4 million from $49.5 million for the same period in 2001. Indirect costs were 33.1% of revenues for fiscal 2002 as compared to 33.8% of revenues for the same period in 2001.

        Depreciation.    For fiscal 2002, depreciation increased 17.7% to $2.0 million from $1.7 million for the same period in 2001. This increase was attributable primarily to our investment to modernize and standardize our information technology infrastructure to support future growth. As a percentage of revenue, depreciation was 1.3% for fiscal 2002 as compared to 1.1% for the same period in fiscal 2001.

        Amortization.    In compliance with SFAS 142, Goodwill and Other Intangible Assets, we discontinued the amortization of goodwill effective December 30, 2001. Accordingly, there was no amortization for the fiscal year ended December 28, 2002 compared to $3.6 million for the same period in fiscal 2001.

        Income from operations.    For fiscal 2002, income from operations increased 39.6% to $6.7 million from $4.8 million for the same period in 2001. This increase was attributable primarily to the discontinuance of goodwill amortization, partially offset by the increase in direct costs as described above. As a percentage of revenue, income from operations was 4.5% for fiscal 2002 as compared to 3.3% for the same period in fiscal 2001.

        Interest expense.    For fiscal 2002, interest expense declined 3.8% to $3.3 million from $3.5 million for the same period in 2001. This decline was attributable primarily to the significant decline in interest rates and repayment of debt, partially offset by the $0.5 million charge for the early termination of our previous credit facility as required under the terms of that credit facility as part of our initial public offering in November 2002. As a percentage of revenue, interest expense was 2.2% for fiscal 2002 as compared to 2.4% for the same period in fiscal 2001.

        Provision for income taxes.    The provision for income taxes increased from $0.7 million in fiscal 2001 to $1.4 million in fiscal 2002. Our fiscal 2002 and 2001 tax provision represents an effective tax rate, which is greater than the federal statutory rate of 34% due to nondeductible charges for put warrants and goodwill amortization.

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        Dividends.    For fiscal 2002, dividends on cumulative preferred stock decreased to $2.0 million from $2.1 million for fiscal 2001. This decrease was attributable to the conversion of preferred stock to common stock on November 12, 2002 in connection with our initial public offering.

Supplemental Quarterly Information

        The following table sets forth quarterly unaudited consolidated financial data for the fiscal quarters of 2002 and 2003 and the first and second quarters of 2004, expressed in dollars and as a percentage of total revenues for the respective periods. We believe that this unaudited financial information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the information for each period. All of the fiscal quarters reflected in the following table had thirteen weeks. Some unevenness of revenue from quarter to quarter exists primarily because of the timing of purchases of materials necessary to perform certain obligations under our C4I2SR contract with U.S. Air Force Space Command. We expect this unevenness to continue with the successor C4I2TSR contract with U.S. Air Force Space Command.

 
   Fiscal Year 2002
   Fiscal Year 2003
   Fiscal Year 2004
  
 
   Q1
   Q2
   Q3
   Q4
   Q1
   Q2
   Q3
   Q4
   Q1
   Q2
  
 
   (dollars in thousands)

  
Revenue   $ 33,463   $ 35,407   $ 38,378   $ 42,103   $ 41,324   $ 40,724   $ 42,082   $ 44,157   $ 55,970   $ 63,814  
Costs and expenses:                                                              
  Direct costs     19,145     21,856     24,427     25,812     25,026     24,264     25,837     26,813     33,529     38,801  
  Indirect costs     11,718     13,923     10,838     12,925     13,163     13,167     12,318     12,921     17,309     19,049  
  Depreciation and amortization     481     515     523     469     512     486     497     514     589     598  
  Amortization of intangible assets     —     —     —     —     —     —     —     —     113     192  
Total operating expenses     31,344     36,294     35,788     39,206     38,701     37,917     38,652     40,248     51,540     58,640  
   
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations     2,119     (887 )   2,590     2,897     2,623     2,807     3,430     3,909     4,430     5,174  
Interest expense     (697 )   (657 )   (659 )   (1,305 )   (162 )   (146 )   (161 )   (137 )   (534 )   (738 )
Minority interests     (38 )   (39 )   (41 )   —     —     —     —     —     —     —  
Change in fair value of put warrants     (90 )   (301 )   1,031     —     —     —     —     —     —     —  
Provision (benefit) for income taxes     564     (689 )   819     746     973     1,052     1,290     1,470     1,539     1,752  
   
 
 
 
 
 
 
 
 
 
 
Net income (loss)   $ 730   $ (1,195 ) $ 2,102   $ 846   $ 1,488   $ 1,609   $ 1,979   $ 2,302   $ 2,357   $ 2,684  
   
 
 
 
 
 
 
 
 
 
 
 
   Fiscal Year 2002
   Fiscal Year 2003
   Fiscal Year 2004
  

 
 
Q1
 
Q2
 
Q3
 
Q4
 
Q1
 
Q2
 
Q3
 
Q4
 
Q1
 
Q2
 
Revenue     100.0 %   100.0 %   100.0 %   100.0 %   100.0 %   100.0 %   100.0 %   100.0 %   100.0 %   100.0 %
Costs and expenses:                                                              
  Direct costs     57.2     61.7     63.7     61.3     60.6     59.6     61.3     60.7     59.9     60.8  
  Indirect costs     35.0     39.3     28.2     30.7     31.9     32.3     29.3     29.3     30.9     29.9  
  Depreciation and amoritzation     1.4     1.5     1.4     1.1     1.2     1.2     1.2     1.2     1.1     0.9  
  Amortization of intangible assets     —     —     —     —     —     —     —     —     0.2     0.3  
   
 
 
 
 
 
 
 
 
 
 
Total operating expenses     93.6     102.5     93.3     93.1     93.7     93.1     91.8     91.2     92.1     91.9  
   
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations     6.4     (2.5 )   6.7     6.9     6.3     6.9     8.2     8.8     7.9     8.1  
Interest expense     (2.1 )   (1.9 )   (1.8 )   (3.1 )   (0.4 )   (0.4 )   (0.4 )   (0.3 )   (1.0 )   (1.2 )
Minority interests     (0.1 )   (0.1 )   (0.1 )   —     —     —     —     —     —     —  
Change in fair value of put warrants     (0.3 )   (0.9 )   2.7     —     —     —     —     —     —     —  
Provision (benefit) for income taxes     1.7     (1.9 )   2.1     1.8     2.3     2.6     3.1     3.3     2.7     2.7  
   
 
 
 
 
 
 
 
 
 
 
Net income (loss)     2.2 %   (3.5 )%   5.4 %   2.0 %   3.6 %   3.9 %   4.7 %   5.2 %   4.2 %   4.2 %
   
 
 
 
 
 
 
 
 
 
 

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Liquidity and Capital Resources

        Our primary liquidity needs are the financing of working capital, capital expenditures and acquisitions. We have historically relied primarily on cash flow from operations, borrowings under our credit facility and from some of our stockholders and the sale of common and preferred stock to provide for our cash needs.

        Net cash provided by (used in) operations was ($4.0) million for the six months ended June 26, 2004, $16.1 million for fiscal 2003, $5.7 million for fiscal 2002 and $1.7 million for fiscal 2001. Cash used in operations in the six months ended June 26, 2004 was attributable to net income of $5.0 million, depreciation, amortization, and other non-cash items of $3.2 million, offset by an increase in net operating assets of $12.2 million. Cash provided by operations in fiscal 2003 was attributable to net income of $7.4 million plus depreciation, amortization and other non-cash items of $2.8 million and a decrease in working capital of $5.9 million. Cash provided by operations in fiscal 2002 was attributable to net income of $2.5 million plus depreciation, amortization and other non-cash items of $2.3 million and a decrease in working capital of $0.9 million. Cash provided by operations in fiscal 2001 was attributable to depreciation and amortization of $5.2 million and a change in fair value of put warrants of $1.3 million offset in part by a net loss of $0.7 million, a decrease in other non-cash charges of $0.6 million and an increase of $3.3 million related to changes in working capital.

        Cash used in investing activities was $66.9 million for the six months ended June 26, 2004, $1.3 million for fiscal 2003, $1.7 million for fiscal 2002 and $2.6 million in fiscal 2001. During the six months ended June 26, 2004, we acquired MATCOM for $65.9 million and invested $0.8 million in capital assets. In fiscal 2003 we invested $1.3 million in capital assets. In fiscal 2002 we invested $1.7 million in capital assets. In fiscal 2001, we invested $2.6 million in capital assets. Investments in capital assets are comprised primarily of computer and office equipment and furniture and fixtures.

        Cash provided by financing activities was $47.9 million for the six months ended June 26, 2004. Cash used in financing activities was $2.4 million in fiscal 2003. Cash provided by financing activities for the six months ended June 26, 2004 was attributable to $16.0 million net borrowings under our revolving line of credit and $30.0 million of long-term debt provided by our credit facility, $2.9 million from bank overdrafts, and $0.3 million provided by proceeds from the exercise of stock options, partially offset by $1.2 million of debt issuance fee payments and $70,000 of capital lease payments. Cash provided by financing activities was $6.4 million for fiscal 2002 and $1.2 million in fiscal 2001. Cash used in financing activities for fiscal year 2003 was attributable to repayments of bank overdrafts of $2.2 million, $0.2 million partial repayment of an outstanding note from the acquisition of Systems Technology Associates and payments for our capital leases of $0.1 million. Cash provided by financing activities for fiscal year 2002 was attributable to the proceeds from issuances of common stock of $47.1 million and the issuance of exchangeable notes in the amount of $4.3 million to the unit holders of SI International, L.L.C., offset by the repayment of all debt in the amount of $43.4 million, the repurchase of warrants held by the bank in the amount of $1.4 million and payments on our long term capital leases of $0.2 million. Cash provided by financing activities in fiscal 2001 was attributable to the proceeds from the issuance of exchangeable notes in the amount of $5.0 million to the unit holders, including Frontenac VII Limited Partnership and Frontenac Masters VII Limited Partnership, of SI International, L.L.C., our principal stockholder, net borrowings against our line of credit of $0.2 million and increase in bank overdrafts of $0.9 million, offset by repayments of notes payable of $3.5 million and repayments of long-term debt of $1.4 million.

        Cash and cash equivalents as of June 26, 2004 and the end of fiscal 2003, fiscal 2002 and fiscal 2001 were $256,000, $23.3 million, $10.9 million and $0.5 million, respectively.

        Following the closing of our initial public offering on November 12, 2002, we entered into a $35.0 million secured revolving credit facility (the 2002 credit facility) with Wachovia Bank, N.A. acting as administration agent for a consortium of lenders. We replaced all letters of credit outstanding under our prior credit facility with letters of credit issued under the new facility. For the fiscal years ended

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December 27, 2003 and December 28, 2002, we did not have any borrowings under the 2002 credit facility. In connection with the acquisition of MATCOM which closed on January 21, 2004, we amended our prior credit facility to increase the maximum amount of available borrowings from $35.0 million to $80.0 million, and to extend the maturity of the credit facility to January 21, 2008. We used approximately $15.0 million from cash on hand and borrowings under the amended credit facility to acquire MATCOM.

        The amended credit facility included a $30.0 million term loan and a $50.0 million revolving credit facility. Under the term loan, we are required to make three $1.5 million quarterly principal payments starting on June 30, 2004, eight $1.875 million quarterly principal payments starting on March 31, 2005, three $2.250 million quarterly principal payments starting on March 31, 2007 and a final $3.750 million principal payment on December 31, 2007.

        The amended credit facility permits us, subject to our compliance with financial and nonfinancial covenants and customary conditions, to make up to $50.0 million of revolving credit borrowings and also provides for the issuance of letters of credit, although the amount of available revolving credit borrowings are reduced by the amount of any outstanding letters of credit issued under the facility. See "Risk Factors—Our indebtedness and debt service obligations may increase substantially and we will be subject to restriction under debt instruments."

        Any borrowings outstanding under the facility will, at our option, bear interest either at floating rates equal to LIBOR plus a spread ranging from 275 to 350 basis points or a specified base rate plus a spread ranging from 175 to 250 basis points, with the exact spread determined upon the basis of our ratio of outstanding indebtedness to our earnings before interest, taxes and depreciation and amortization expense, as defined in the amended credit facility.

        We and each of our existing and future subsidiaries are jointly and severally liable with respect to the payment of all borrowings and other amounts due and performance of all obligations under the amended credit facility. The amended credit facility is secured by a pledge of substantially all of our current and future tangible and intangible assets, as well as those of our current and future subsidiaries, including accounts receivable, inventory and capital stock of our existing and future subsidiaries. The amended credit facility requires us to make mandatory prepayments of outstanding borrowings, with a corresponding reduction in the maximum amount of borrowings available under the facility, with net proceeds from certain insurance recoveries and asset sales, and with 100% of the net proceeds from debt issuances, and with 50% of the net proceeds from certain equity issuances (including this offering) subject to specified exceptions. Also, the amended credit facility includes a number of restrictive covenants including, among other things, limitations on our leverage and capital expenditures, limitations on our ability to incur additional indebtedness or liens, requirements that we maintain minimum ratios of cash flow to fixed charges and prohibitions on payment of dividends on our capital stock, limitations on our ability to enter into mergers, acquisitions or sales of our assets and prohibitions on certain transactions among our subsidiaries and affiliated companies. The amended credit facility also contains events of default, including, among other events, any transaction resulting in a new stockholder or group of stockholders acquiring control of our Board of Directors or ownership of greater than 40% of our outstanding capital stock, any default by us under any material government contract or other material contract to which we are a party, the suspension of our ability to enter into contracts with the federal, state or local governments generally. See "Risk Factors—Risks Related to our Business—Our indebtedness and debt service obligations may increase substantially and we will be subject to restrictions under debt instruments."

        We currently anticipate that cash flow from operations and borrowings available under our amended credit facility will be sufficient to meet our presently anticipated capital needs for at least the next twelve months, but may be insufficient to provide funds necessary for any future acquisitions we may make, whether during the next twelve months or thereafter. To the extent that we require additional funds, whether for acquisitions or otherwise, we may seek additional equity or debt financing. Such financing may not be available to us on terms that are acceptable to us, if at all, and any equity financing may be

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dilutive to our stockholders. To the extent that we obtain additional debt financing, our debt service obligations will increase and the relevant debt instruments may, among other things, impose additional restrictions on our operations, require us to comply with additional financial covenants or require us to pledge assets to secure our borrowings.

        Financial data for all of our subsidiaries are included in our consolidated financial statements included in this prospectus supplement and our accompanying prospectus and the documents incorporated by reference herein or therein.

Tabular Disclosure of Contractual Obligations

        Our contractual obligations as of December 27, 2003 are as follows (dollars in thousands):

 
    
   Payment due by period
Contractual Obligations
   Total
   Less than
1 year
   1—3
years
   3—5
years
   More than
5 years
Capital lease   $ 217   $ 148   $ 69     —     —
Operating leases     34,506     4,649     8,002   $ 7,331   $ 14,524
   
 
 
 
 
Total   $ 34,723   $ 4,797   $ 8,071   $ 7,331   $ 14,524
   
 
 
 
 

        Purchase obligations related to existing contracts are with the federal government and, in the event any contracts are terminated, we would have the ability to submit a termination claim for outstanding purchases.

        In connection with our acquisition of MATCOM, we borrowed $30.0 million in long-term debt repayable as follows: three $1.5 million quarterly principal payments starting on June 30, 2004, eight $1.875 million quarterly principal payments starting on March 31, 2005, three $2.25 million quarterly principal payments starting on March 31, 2007, and a final $3.75 million principal payment on December 31, 2007; provided that the debt is repayable earlier upon the occurrence of certain events, including the offering of equity securities (including this offering) as described under "—Liquidity and Capital Resources." As of January 21, 2004, we borrowed an additional $19.0 million for the acquisition of MATCOM under our revolving credit facility, which is reflected as current liabilities on our balance sheet.

Critical Accounting Policies and Estimates

        Our significant accounting policies are described in Note 2 to our consolidated financial statements included in this prospectus supplement and our accompanying prospectus and the documents incorporated by reference herein or therein. We consider the accounting policies related to revenue recognition to be critical to the understanding of our results of operations. Our critical accounting policies also include the areas where we have made what we consider to be particularly difficult, subjective or complex judgments in making estimates, and where these estimates can significantly impact our financial results under different assumptions and conditions. We prepare our financial statements in conformity with accounting principles generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates, judgments and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. Actual results could be different from these estimates.

Revenue Recognition

        Our accounting policy regarding revenue recognition is written to comply with the following criteria: (1) a contract has been executed; (2) the contract price is fixed and determinable; (3) delivery of services or products has occurred; and (4) collectibility of the contract price is considered probable and can be

S-23


reasonably estimated. Compliance with these criteria may require us to make significant judgments and estimates.

        For cost reimbursable contracts with fixed fees and fixed price contracts, we estimate the applicable fees earned as costs are incurred or services are provided. This process requires estimation of the contemplated level of effort to accomplish the tasks under contract, the cost of such effort and ongoing assessment towards completing the contract. We utilize a number of management processes to monitor contract performance and revenue estimates, including monthly in-process reviews. For cost reimbursable contracts with performance-based fees, we estimate the applicable fees earned based on historical experience and performance evaluations from our customers. For fixed price contracts that are based on unit pricing, we recognize revenue for the number of units delivered in any given fiscal period. For fixed price contracts that are based on the proportionate performance method and involve a specified number of similar acts, we recognize revenue based on the proportion of those acts completed compared to the number of total specified acts required by the contract. For fixed price contracts that are based on the proportionate performance method and involve a specified number of defined but not similar acts, we recognize revenue based on the proportion of the project's percentage total costs incurred compared to the estimated total costs associated with the entire transaction. Occasionally, facts may develop that require revisions to estimated total costs or revenues expected. The cumulative effect of any such revisions is recorded in the period in which the facts requiring the revision become known. The full amount of anticipated losses on any contract type are recognized in the period in which they become known.

        In addition, certain indirect costs are charged to contracts and paid by the client using provisional, or estimated, indirect rates that are subject to later revision based on government audits. Any costs found to be improperly allocated to a specific contract will not be reimbursed, and any such costs already reimbursed must be refunded.

S-24


SELLING STOCKHOLDERS

        The table below sets forth information about the selling stockholders' beneficial ownership of our common stock as of August 5, 2004. As of August 5, 2004, the selling stockholders beneficially owned, in the aggregate, 2,312,870 shares of our common stock. Frontenac Company VII, L.L.C., or Frontenac LLC, is the general partner of Frontenac VII Limited Partnership, or FVII, and the general partner of Frontenac Masters VII Limited Partnership, or Masters. James E. Crawford, III, a member of our Board of Directors, is a member of Frontenac LLC. Walter C. Florence, a member of our Board of Directors, is associated with Frontenac LLC and is a limited partner of Masters. The address of each selling stockholder is 135 S. LaSalle Street, Suite 3800, Chicago, IL 60603.

        The number of shares of common stock outstanding as of August 20, 2004 was 8,483,814 shares. The number of shares of common stock outstanding after this offering includes shares of common stock being offered for sale by us in this offering. This table assumed no exercise of the underwriters' over-allotment option.

 
   Shares Beneficially
Owned Prior
to the Offering
    
   Shares Beneficially
Owned After
the Offering
Name of Selling Stockholder
   Number of
Shares
Beneficially
Owned (1)
   Percent
   Number of
Shares Being
Offered
   Number of Shares
Beneficially
Owned
   Percent
Frontenac VII Limited Partnership   2,202,705   25.6%   952,369   1,250,336   11.7%
Frontenac Masters VII Limited Partnership   110,165   1.3%   47,631   62,534   0.6%
(1)
As reported in a Form 4 filed by Frontenac LLC on August 5, 2004.

S-25


UNDERWRITING

        Subject to the terms and conditions of the underwriting agreement, dated the date of this prospectus supplement, we and the selling stockholders have agreed to sell to the underwriters named below, and the underwriters, for whom Wachovia Capital Markets, LLC is acting as representative, have severally agreed to purchase, the respective number of shares of common stock appearing opposite their names below.

Underwriter
   Number of Shares
Wachovia Capital Markets, LLC    
SG Cowen & Co., LLC    
Legg Mason Wood Walker, Incorporated    
Stephens Inc.    
SunTrust Capital Markets, Inc.    
   
  Total    
   

        The underwriters have agreed to purchase all of the shares of common stock shown in the above table if any of those shares are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

        The shares of common stock are offered by the underwriters, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by counsel for the underwriters and other conditions. The underwriters reserve the right to withdraw, cancel or modify the offer and to reject orders in whole or in part.

        Commissions and Discounts.    The underwriters have advised us that they propose to offer the common stock to the public at the public offering price appearing on the cover page of this prospectus supplement and to certain dealers at that price less a concession of not more than $            per share, of which $            may be reallowed to other dealers. After the initial offering, the public offering price, concession and reallowance to dealers may be changed.

        The following table shows the public offering price, underwriting discounts and commissions and proceeds, before expenses, to us and the selling stockholders, both on a per share basis and in total, assuming either no exercise or full exercise by the underwriters of their over-allotment option.

 
    
   Total
 
   Per Share
   Without Option
   With Option
Public offering price   $   $   $
Underwriting discounts and commissions            
Proceeds, before expenses, to us            
Proceeds, before expenses, to selling stockholders            

        We estimate that the expenses of this offering payable by us, not including underwriting discounts and commissions, will be approximately $            . We have agreed under a registration rights agreement to pay the expenses of the selling stockholders.

        Over-allotment Option.    We and the selling stockholders have granted to the underwriters an option, exercisable during the 30-day period after the date of this prospectus supplement, to purchase up to a total of 330,000 and 150,000 additional shares of common stock, respectively, at the public offering price per share less the underwriting discounts and commissions per share shown on the cover page of this prospectus supplement to cover over-allotments, if any. We will not receive any proceeds from the sale of shares by the selling stockholders upon the exercise of the over-allotment option. To the extent that the over-allotment option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase approximately the same percentage of the additional shares that the number of shares of

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common stock to be purchased by that underwriter as shown in the above table represents as a percentage of the total number of shares shown in that table.

        Indemnity.    We and the selling stockholders have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, or to contribute to payments that the underwriters may be required to make in respect of those liabilities.

        Lock-up Agreements.    All of our directors and officers (as defined under Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act) and the selling stockholders, will enter into agreements that, for a period of 90 days after the date of this prospectus supplement, they will not, without the prior written consent of Wachovia Capital Markets, LLC, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or other capital stock or any securities convertible into, or exercisable or exchangeable for, shares of our common or our other capital stock, except that such directors, executive officers and selling stockholders will be permitted to transfer any of these securities by gift, will or intestate succession (so long as any recipient of those securities enters into a similar lock-up agreement), the selling stockholders will be permitted to distribute securities to their partners (so long as any recipient of those securities enters into a similar lock-up agreement), and the selling stockholders will be permitted to sell shares of common stock in this offering.

        In addition, we have agreed that, for a period of 90 days after the date of this prospectus supplement, we will not, without the prior written consent of Wachovia Capital Markets, LLC, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our common stock or other capital stock or any securities convertible into, or exercisable or exchangeable for, shares of our common stock or other capital stock, except for:

        Wachovia Capital Markets, LLC may, in its sole discretion and at any time or from time to time, without notice, release all or any portion of the common stock or other securities subject to the lock-up agreements.

        Quotation on the Nasdaq National Market.    Our common stock is quoted on the Nasdaq National Market under the symbol "SINT."

        Stabilization.    The representative has advised us that, pursuant to Regulation M under the Exchange Act, certain persons participating in the offering may engage in transactions, including stabilization bids, syndicate covering transactions or the imposition of penalty bids, which may have the effect of stabilizing or maintaining the market price of our common stock at a level above that which might otherwise prevail in the open market.

S-27

        The representative of the underwriters has advised us that these transactions may be effected on the Nasdaq National Market or otherwise. Neither we nor the underwriters make any representation that the underwriters will engage in any of the transactions described above, and these transactions, if commenced, may be discontinued without notice. Neither we nor the underwriters make any representation or prediction as to the direction or magnitude of the effect that the transactions described above, if commenced, may have on the market price of our common stock.

        Other Relationships.    Wachovia Capital Markets, LLC and its affiliates have provided commercial and investment banking services to us from time to time for which they have received customary fees and expenses. The other underwriters and their affiliates may, from time to time, engage in other transactions with us and perform other services for us in the ordinary course of their businesses. In particular, Wachovia Bank, N.A., an affiliate of Wachovia Capital Markets, LLC, is a lender and agent under our credit facility, certain borrowings under which will be repaid with the net proceeds from this offering. In addition, Wachovia Bank, N.A., an affiliate of Wachovia Capital Markets, LLC, serves as transfer agent and registrar for our common stock.


LEGAL MATTERS

        The legality of the common stock offered by this prospectus supplement will be passed upon for us by Shaw Pittman LLP, a limited liability partnership including professional corporations. Sidley Austin Brown & Wood LLP, San Francisco, California will act as counsel to the underwriters.


EXPERTS

        The consolidated financial statements of SI International, Inc. included in SI International, Inc.'s Form 10-K/A for the year ended December 27, 2003 have been audited by Ernst & Young LLP, independent auditors, as set forth in their report included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

        The financial statements of MATCOM International Corp. incorporated herein by reference from our Current Report on Form 8-K filed with the SEC on January 28, 2004, as amended on Form 8-K/A filed with the SEC on March 17, 2004, have been audited by Grant Thornton LLP, independent public accountants, as indicated in their report with respect thereto, and are incorporated herein by reference in reliance upon the authority of said firm as experts in accounting and auditing.


WHERE YOU CAN FIND MORE INFORMATION

        We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the SEC's website at http://www.sec.gov. You may also read and copy any document we file at the SEC's Public Reference Room at:

        Please call the SEC at (800) SEC-0330 for further information on the operating rules and procedures for the public reference room.

        The SEC allows us to "incorporate by reference" the information we file with them, which means we can disclose important information to you by referring you to those documents. The information we incorporate by reference is an important part of our prospectus, and all information that we will later file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below as well as any future filings made with the SEC under Sections 13(a), 13(c), 14, or

S-28


15(d) of the Securities Exchange Act, except that we do not incorporate any document or portion of a document that is "furnished" to the SEC (Exchange Act File No. 000-50080), and any filings made from the date of this prospectus until we sell all of the securities under this prospectus as supplemented.

S-29

        Copies of these filings are available at no cost on our website, www.si-intl.com. Amendments to these filings will be posted to our website as soon as reasonably practicable after filing with the SEC. In addition, you may request a copy of these filings and any amendments thereto at no cost, by writing or telephoning us. Those copies will not include exhibits to those documents unless the exhibits are specifically incorporated by reference in the documents or unless you specifically request them. You may also request copies of any exhibits to the registration statement. Please direct your request to:

        Our prospectus does not contain all of the information included in the registration statement. We have omitted certain parts of the registration statement in accordance with the rules and regulations of the SEC. For further information, we refer you to the registration statement, including its exhibits and schedules. Statements contained in our prospectus and any accompanying prospectus supplement about the provisions or contents of any contract, agreement or any other document referred to are not necessarily complete. Please refer to the actual exhibit for a more complete description of the matters involved. You may get copies of the exhibits by contacting the person named above.

        You should rely only on the information in our prospectus, any prospectus supplement and the documents that are incorporated by reference. We have not authorized anyone else to provide you with different information. We are not offering these securities in any state where the offer is prohibited by law. You should not assume that the information in this prospectus, any prospectus supplement or any incorporated document is accurate as of any date other than the date of the document.

S-30

As filed with the Securities and Exchange Commission on May 19, 2004

Registration No. 333-113827

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 2 TO FORM S-3
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933

SI INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)

SEE TABLE OF ADDITIONAL REGISTRANTS

Delaware
(State or Other Jurisdiction of Incorporation or Organization)

52-2127278
(IRS Employer Identification Number)

12012 Sunset Hills Road
Reston, Virginia 20190
(703) 234-7000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)

Ray Oleson
Chief Executive Officer
SI International, Inc.
12012 Sunset Hills Road
Reston, Virginia 20190
(703) 234-7000

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

With a copy to:

Lawrence T. Yanowitch
Shaw Pittman LLP
1650 Tysons Boulevard
McLean, VA 22102
(703) 770-7900		   Jeffrey B. Grill
Shaw Pittman LLP
2300 N Street, N.W.
Washington, D.C. 20037
(202) 663-8000

        Approximate date of commencement of proposed sale to public                         

        If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o

        If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered in connection with dividend or interest reinvestment plans, check the following box. ý

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o                         

        If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o                         

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

        The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant files a further amendment which specifically states that this registration statement is to become effective in accordance with Section 8(a) of the Securities Act or until the registration statement becomes effective on the date the SEC, acting under Section 8(a), determines.

TABLE OF ADDITIONAL REGISTRANTS

Registrant
   Jurisdiction of
Organization
   IRS Employer
Identification
Number
SI International Application Development, Inc. (f/k/a Statistica, Inc.)   Maryland   52-1089282

SI International Consulting, Inc. (f/k/a SI Enterprise Consulting Corporation)
 
Delaware
 
54-1868597

SI International Learning, Inc. (f/k/a WPI, Inc.)
 
Maryland
 
52-113675

SI International Engineering, Inc. (f/k/a Systems Technology Associates, Inc.)
 
Colorado
 
84-1074887

SI International Telecom Corporation
 
Delaware
 
84-1561617

MATCOM International Corp.
 
Delaware
 
54-1932253

SI International Technology Services, Inc. (f/k/a Materials, Communication
and Computers, Inc.)
 
North Carolina
 
56-1375202


 
 
 
 
 

PROSPECTUS

LOGO

SI International, Inc.

$100,000,000
Common Stock, Preferred Stock, Depositary Shares,
Warrants and Debt Securities
Offered by
SI International, Inc.

1,500,000 Shares of Common Stock
Offered by the
Selling Stockholders

        We may from time to time offer, in one or more series, separately or together, the following:

        The aggregate initial public offering price of the securities that we may offer through this prospectus will be up to $100,000,000. In addition, up to 1,500,000 shares of our common stock may be offered from time to time in one or more offerings by the selling stockholders identified in this prospectus at prices that such selling stockholders will determine at the time of the offering. We will not receive any proceeds from the sales of shares of our common stock by the selling stockholders.

        We will provide the specific terms of the securities offered by us or the selling stockholders in supplements to this prospectus, which we will deliver together with the prospectus at the time of sale.

        This prospectus may not be used to offer and sell securities unless accompanied by a prospectus supplement. Please read this prospectus and the applicable supplement carefully before you invest in any of our securities.

        Our common stock is quoted on the Nasdaq National Market under the symbol "SINT."

        Investing in our securities involves risks. See "Risk Factors" beginning on page 3 and in the "Risk Factors" section, if any, of the applicable prospectus supplement.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is May 21, 2004.


ABOUT THIS PROSPECTUS

        This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission using a "shelf" registration process. Under this shelf process, we may sell any combination of the securities described in this prospectus in one or more offerings up to a total dollar amount of $100,000,000. In addition, the selling stockholders referred to in this prospectus may offer and sell up to 1,500,000 shares of our common stock under this prospectus and any prospectus supplement. We will not receive any of the proceeds from any sale of shares by the selling stockholders.

        Our prospectus provides you with a general description of the securities we and the selling stockholders may offer. Each time we or the selling stockholders sell securities, we will provide a prospectus supplement that will contain specific information about all of the terms of that offering. Our prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and the applicable prospectus supplement together with additional information described under the heading "Where You Can Find More Information."

        References to "we," "us" or "our" refer to SI International, Inc. and its direct or indirect owned subsidiaries, unless the context otherwise requires. The term "you" refers to a prospective investor.

2

        Before investing in our securities, you should be aware that there are various risks. Investors should carefully consider, among other factors, the factors discussed in this prospectus and in any prospectus supplement. This prospectus contains, and any accompanying prospectus supplement will contain, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Also, documents that we "incorporate by reference" into this prospectus, including documents that we subsequently file with the SEC will contain forward-looking statements. When we refer to forward-looking statements or information, sometimes we use words such as "may," "will," "could," "should," "plans," "intends," "expects," "believes," "estimates," "anticipates" and "continues." The risk factors in this prospectus describe risks that may affect these statements but are not all-inclusive, particularly with respect to possible future events. Many things can happen that can cause actual results to be different from those we describe. Forward-looking statements are not guarantees of our future performance and involve risks, uncertainties and assumptions that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. There will likely be events in the future that we are not able to predict and over which we have no control. You should not place undue reliance on forward-looking statements. We do not undertake any obligation to notify you if we learn that any of the forward-looking statements or the underlying assumptions are incorrect.


RISK FACTORS

Risks Related to Our Industry

We depend on contracts with the federal government for most of our revenue, and our business would be seriously harmed if the government ceased doing business with us or significantly decreased the amount of business it does with us.

        We derived 93.7% and 92.9% of our total revenue in fiscal 2003 and in fiscal 2002, respectively, and 96.2% of our total revenue in the three months ended March 27, 2004, from federal government contracts, either as a prime contractor or a subcontractor. This includes 54.5% and 49.0% of our total revenue in fiscal 2003 and in fiscal 2002, respectively, and 50.1% of our total revenue in the three months ended March 27, 2004, that we derived, either as a prime contractor or a subcontractor, from contracts with agencies of the Department of Defense and intelligence community. We expect that we will continue to derive most of our revenue for the foreseeable future from work performed under federal government contracts. If we were suspended or prohibited from contracting with the federal government generally, or with any significant agency of the Department of Defense or the intelligence community, or if our reputation or relationship with the federal government or any significant agency of the Department of Defense or the intelligence community were impaired, or if any of the foregoing otherwise ceased doing business with us or significantly decreased the amount of business it does with us, our business, prospects, financial condition and operating results would be materially adversely affected.

        Our two largest contracts, in terms of revenues, are scheduled to expire in September 2004. Our National Visa Center, or NVC, contract with the Department of State generated 13.9% and 11.0% of our total revenues in fiscal 2003 and in fiscal 2002, respectively, and approximately 10.2% of our total revenue for the three months ended March 27, 2004. We have received a solicitation from the government for the recompetition of the NVC contract and submitted our proposal on April 23, 2004. We cannot guarantee that we will win the recompete for the NVC contract. If we fail to win the recompete for the NVC contract, our business would be materially adversely affected.

        Our contract with the U.S. Air Force Space Command for communications and computer infrastructure for command and control, information management and intelligence and for surveillance and reconnaissance, or C4I2SR, generated 22.1% of our total revenues in fiscal 2003 and approximately 10.6% of our total revenue for the three months ended March 27, 2004. On a pro forma basis, assuming MATCOM had been acquired on December 29, 2002, the C4I2SR contract would have generated 15.6% of

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our total revenues in fiscal year 2003. On March 26, 2004, we announced that the federal government awarded us the C4I2TSR contract, the successor contract to the C4I2SR contract. The indefinite delivery/indefinite quantity prime contract has a three and one-half year base period, with three two-year options exercisable at the option of the federal government. If all option periods are exercised, the contract term would be nine and one-half years and would have a value of approximately $800 million.

Our business could be adversely affected by changes in budgetary priorities of the federal government.

        Because we derive a significant portion of our revenue from contracts with the federal government, we believe that the success and development of our business will continue to depend on our successful participation in federal government contract programs. Changes in federal government budgetary priorities could directly affect our financial performance. A significant decline in government expenditures, a shift of expenditures away from programs which call for the types of services that we provide or a change in federal government contracting policies, could cause federal governmental agencies to reduce their expenditures under contracts, to exercise their right to terminate contracts at any time without penalty, not to exercise options to renew contracts or to delay or not enter into new contracts. Any of those actions could seriously harm our business, prospects, financial condition or operating results. Moreover, although our contracts with governmental agencies often contemplate that our services will be performed over a period of several years, Congress usually must approve funds for a given program each government fiscal year and may significantly reduce or eliminate funding for a program. Significant reductions in these appropriations by Congress could have a material adverse effect on our business. Additional factors that could have a serious adverse effect on our federal government contracting business include:

Our contracts with the federal government may be terminated or adversely modified prior to completion, which could adversely affect our business.

        Federal government contracts generally contain provisions, and are subject to laws and regulations, that give the federal government rights and remedies not typically found in commercial contracts, including provisions permitting the federal government to:

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        The federal government may terminate a contract with us either "for convenience" (for instance, due to a change in its perceived needs or its desire to consolidate work under another contract) or if we default by failing to perform under the contract. If the federal government terminates a contract with us for convenience, we generally would be entitled to recover only our incurred or committed costs, settlement expenses and profit on the work completed prior to termination. If the federal government terminates a contract with us based upon our default, we generally would be denied any recovery for undelivered work, and instead may be liable for excess costs incurred by the federal government in procuring undelivered items from an alternative source. As is common with government contractors, we have experienced and continue to experience occasional performance issues under some of our contracts. We may in the future receive show-cause or cure notices under contracts that, if not addressed to the federal government's satisfaction, could give the government the right to terminate those contracts for default or to cease procuring our services under those contracts.

        Our federal government contracts typically have terms of one or more base years and one or more option years. Many of the option periods cover more than half of the contract's potential term. Federal governmental agencies generally have the right not to exercise options to extend a contract. A decision to terminate or not to exercise options to extend our existing contracts could have a material adverse effect on our business, prospects, financial condition and results of operations.

        Certain of our federal government contracts also contain "organizational conflict of interest" clauses that could limit our ability to compete for certain related follow-on contracts. For example, when we work on the design of a particular solution, we may be precluded from competing for the contract to install that solution. While we actively monitor our contracts to avoid these conflicts, we cannot guarantee that we will be able to avoid all organizational conflict of interest issues.

If we fail to establish and maintain important relationships with government entities and agencies, our ability to successfully bid for new business may be adversely affected.

        To develop new business opportunities, we primarily rely on establishing and maintaining relationships with various government entities and agencies. We may be unable to successfully maintain our relationships with government entities and agencies, and any failure to do so could materially adversely affect our ability to compete successfully for new business.

We derive significant revenue from contracts and task orders awarded through a competitive bidding process. If we are unable to win new awards or successfully compete for renewal contracts, our business and prospects may be adversely affected.

        A significant number of our contracts and task orders with the federal government are awarded through a competitive bidding process. We expect that much of the business that we will seek in the foreseeable future will continue to be awarded through competitive bidding of new contracts and task orders and contracts subject to renewal. Recently, members of Congress and administration officials have authorized changes to the procurement process intended to increase competition among suppliers to the federal government. Budgetary pressures and reforms in the procurement process have caused many federal government clients to increasingly purchase goods and services through indefinite delivery/indefinite quantity, or ID/IQ, contracts, including General Services Administration contracts, or GSA contracts, and other government-wide acquisition contracts, or GWACs. These contracts have increased competition and pricing pressure by concentrating work under fewer contracts, and requiring competition both prior to the initial award of the contract and throughout the term of the contract in order to obtain

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task orders for the services we provide, requiring that we make sustained post-award marketing efforts to realize revenue under each such contract. These contracts generally approve particular contractors to provide specified goods and services to the applicable governmental agency but generally do not obligate the agency to purchase any particular amount of goods or services. To procure goods or services under the contract, the agency generally awards task orders to perform specified services or to supply specified goods pursuant to competitive bidding among approved contractors. Thus, the existence of a contract does not ensure future revenue; rather, the contract merely provides us the opportunity to compete for additional work. An agency may administer an ID/IQ contract in which it procures goods and services for itself. Under the same contract, other federal agencies may also procure goods and services. These contracts are known as GWACs. When multiple prime contractors hold GWACs for the same goods and services, all of them are eligible to supply goods and services under the contract. As a result, qualified contractors often compete with each other to obtain task orders under a GWAC. Similarly, GSA contracts, including contracts commonly known as GSA Schedule contracts, are procurement contracts administered by the GSA on behalf of the entire federal government. Like GWACs, multiple contractors may be awarded GSA contracts for the same goods and services. As a result, an agency may procure goods and services from any contractor awarded the GSA contract at the prices and on the terms stated in the contract. Moreover, even if we are highly qualified to work on a particular new contract or a contract subject to renewal, we might not be awarded business because of the federal government's policy and practice of procuring goods and services from multiple contractors in order to maintain a diverse base of contractors.

        The competitive bidding process presents a number of risks, including the following:

        The government contracts for which we compete typically have multiple year terms, and if we are unable to win a particular contract, we generally will be foreclosed from competing again for that contract until its expiration several years later. If we are unable to win new contract awards, our business and prospects will be adversely affected. In addition, upon the expiration of a contract, if the client requires further services of the type provided by the contract, there is frequently a competitive rebidding process. As of March 27, 2004, approximately 14.0% of our revenue recognized during fiscal 2003 was derived from contracts that are or will be subject to recompetition bids prior to the end of government fiscal 2004 (ending September 30, 2004). This figure excludes the C4I2SR contract, which generated 22.1% of our revenue recognized in fiscal 2003, as a result of our March 2004 award of the C4I2TSR contract, the successor to the C4I2SR contract. Although we have been awarded the C4I2TSR contract, there can be no assurance that we will win any particular bid or recompetition bid, or that we will be able to replace business lost upon expiration or completion of a contract, and the termination or nonrenewal of any of our significant contracts or a substantial portion of our other contracts could materially adversely affect our operating results.

Our business may suffer if our facilities or our employees are unable to obtain or retain the security clearances or other qualifications needed to perform services for our clients.

        Many of our federal government contracts require employees and facilities used in specific engagements to hold security clearances and to clear National Agency Checks and Defense Security Service

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checks. Many of our contracts require us to employ personnel with specified levels of education, work experience and security clearances. Depending on the level of clearance, security clearances can be difficult and time-consuming to obtain. If our employees or our facilities lose or are unable to obtain necessary security clearances or successfully clear necessary National Agency or Defense Security Service checks, we may not be able to win new business and our existing clients could terminate their contracts with us or decide not to renew them. To the extent we cannot obtain or maintain the security clearances necessary for our facilities or our employees working on a particular contract or to the extent our facilities or our employees do not successfully clear necessary National Agency Checks or Defense Security Service checks, we may not derive the revenue anticipated from the contract, and our operating results could be materially adversely affected.

We must comply with a variety of laws, regulations and procedures and our failure to comply could harm our operating results.

        We must observe laws and regulations relating to the formation, administration and performance of federal government contracts which affect how we do business with our clients and impose added costs on our business. For example, the Federal Acquisition Regulation and the industrial security regulations of the Department of Defense and related laws include provisions that:

        We are subject to industrial security regulations of the Department of Defense and other federal agencies that are designed to safeguard against foreigners' access to classified information. If we were to come under foreign ownership, control or influence, we could lose our facility security clearances, which could result in our federal government customers terminating or deciding not to renew our contracts, and could impair our ability to obtain new contracts.

        In addition, our employees often must comply with procedures required by the specific agency for which work is being performed, such as time recordation or prohibition on removal of materials from a location.

        Our failure to comply with applicable laws, regulations or procedures, including federal procurement regulations and regulations regarding the protection of classified information, could result in contract termination, loss of security clearances, suspension or prohibition from contracting with the federal government, civil fines and damages and criminal prosecution and penalties, any of which could materially adversely affect our business.

The federal government may revise its procurement or other practices in a manner adverse to us.

        The federal government may revise its procurement practices or adopt new contracting rules and regulations, such as cost accounting standards. It could also adopt new contracting methods relating to GSA contracts, GWACs or other government-wide contracts, or adopt new standards for contract awards intended to achieve certain social or other policy objectives, such as establishing new set-aside programs for small or minority-owned businesses. In addition, the federal government may face restrictions from new legislation or regulations, as well as pressure from government employees and their unions, on the nature and amount of services the federal government may obtain from private contractors. These changes could impair our ability to obtain new contracts or contracts under which we currently perform when those contracts are put up for recompetition bids. Any new contracting methods could be costly or

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administratively difficult for us to implement, and, as a result, could harm our operating results. For example, the Truthfulness, Responsibility and Accountability in Contracting Act, proposed in 2001, would have limited and severely delayed the federal government's ability to use private service contractors. Although this proposal was not enacted, it or similar legislation could be proposed at any time. Any reduction in the federal government's use of private contractors to provide federal information technology services could materially adversely impact our business.

Our contracts and administrative processes and systems are subject to audits and cost adjustments by the federal government, which could reduce our revenue, disrupt our business or otherwise adversely affect our results of operations.

        Federal governmental agencies, including the Defense Contract Audit Agency, or DCAA, routinely audit and investigate government contracts and government contractors' administrative processes and systems. These agencies review our performance on contracts, pricing practices and cost structure. They also review our compliance with applicable laws, government regulations, policies and standards and the adequacy of our internal control systems and policies, including our purchasing, property, estimating, compensation and management information systems. Any costs found to be improperly allocated to a specific contract will not be reimbursed, and any such costs already reimbursed must be refunded. Moreover, if any of our administrative processes and systems are found not to comply with the applicable requirements, we may be subjected to increased government scrutiny or required to obtain additional governmental approvals that could delay or otherwise adversely affect our ability to compete for or perform contracts. Therefore, an unfavorable outcome to an audit by the DCAA or another government agency, such as the Defense Security Service, or DSS, which verifies security compliance, could materially adversely affect our competitive position and result in a substantial reduction of our revenues. If a government investigation uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeitures of profits, suspension of payments, fines and suspension or debarment from doing business with the federal government. In addition, we could suffer serious reputational harm if allegations of impropriety were made against us.

Failure to maintain strong relationships with other government contractors could result in a decline in our revenue.

        We derived 15.7% and 17.1% of our total revenue in fiscal 2003 and in fiscal 2002, respectively, and 20.6% of our total revenue for the three months ended March 27, 2004 from contracts under which we acted as a subcontractor or from "teaming" arrangements in which we and other contractors jointly bid on particular contracts or programs. As a subcontractor or team member, we often lack control over fulfillment of a contract, and poor performance on the contract could tarnish our reputation, even when we perform as required. We expect to continue to depend on relationships with other contractors for a portion of our revenue in the foreseeable future. Moreover, our revenue and operating results could be materially adversely affected if any prime contractor or teammate chooses to offer a client services of the type that we provide or if any prime contractor or teammate teams with other companies to independently provide those services.

The calculation of our backlog is subject to numerous uncertainties, and we may not receive the full amounts of revenue estimated under the contracts included in our backlog, which could reduce our revenue in future periods.

        Backlog is our estimate of the amount of revenue we expect to realize over the remaining life of the awarded contracts and task orders we have in hand as of the measurement date. Our total backlog consists of funded and unfunded backlog. We define funded backlog as estimated future revenues under government contracts and task orders for which funding has been appropriated by Congress and authorized for expenditure by the applicable agency, plus estimated future revenues we expect to receive under signed purchase orders with commercial clients. Unfunded backlog is the difference between total

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backlog and funded backlog. Unfunded backlog reflects our estimate of future revenues under awarded government contracts and task orders for which either funding has not been appropriated or expenditures have not been authorized. Our total backlog does not include estimates of revenue from GWAC or GSA schedules beyond contract or task order awards, but our unfunded backlog does include estimates of revenue beyond contract or task order awards for other types of ID/IQ contracts, including our C4I2SR contract and its successor contract, the C4I2TSR contract, both with the U.S. Air Force Space Command.

        The calculation of backlog is highly subjective and is subject to numerous uncertainties and estimates, and there can be no assurance that we will in fact receive the amounts we have included in our backlog. Our assessment of a contract's potential value is based upon factors such as historical trends, competition and budget availability. In the case of contracts which may be renewed at the option of the applicable agency, we generally calculate backlog by assuming that the agency will exercise all of its renewal options; however, the applicable agency may elect not to exercise its renewal options. In addition, federal contracts typically are only partially funded at any point during their term, and all or some of the work to be performed under a contract may remain unfunded unless and until Congress makes subsequent appropriations and the procuring agency allocates funding to the contract. Our estimate of the portion of backlog from which we expect to recognize revenues in fiscal 2004 or any future period is likely to be inaccurate because the receipt and timing of any of these revenues is dependent upon subsequent appropriation and allocation of funding and is subject to various contingencies, such as timing of task orders, many of which are beyond our control. In addition, we may never receive revenues from some of the engagements that are included in our backlog and this risk is greater with respect to unfunded backlog. The actual receipt of revenues on engagements included in backlog may never occur or may change because a program schedule could change, the program could be canceled, the governmental agency could elect not to exercise renewal options under a contract or could select other contractors to perform services, or a contract could be reduced, modified or terminated. We adjust our backlog on a quarterly basis to reflect modifications to or renewals of existing contracts or task orders, awards of new contracts or task orders, or approvals of expenditures. Additionally, the maximum contract value specified under a government contract or task order awarded to us is not necessarily indicative of the revenues that we will realize under that contract. We also derive revenues from ID/IQ contracts, which typically do not require the government to purchase a specific amount of goods or services under the contract other than a minimum quantity which is generally very small. If we fail to realize revenue included in our backlog, our revenues and operating results for the then current fiscal year as well as future reporting periods could be materially adversely affected.

Loss of our GSA contracts or GWACs would impair our ability to attract new business.

        We are a prime contractor under several GSA contracts and GWAC schedule contracts. We believe that our ability to continue to provide services under these contracts will continue to be important to our business because of the multiple opportunities for new engagements each contract provides. If we were to lose our position as prime contractor on one or more of these contracts, we could lose substantial revenues and our operating results could suffer. GSA contracts and other GWACs typically have a one or two-year initial term with multiple options exercisable at the government client's discretion to extend the contract for one or more years. We cannot be assured that our government clients will continue to exercise the options remaining on our current contracts, nor can we be assured that our future clients will exercise options on any contracts we may receive in the future.


Risks Associated with International Operations

        Our international business exposes us to additional risks including exchange rate fluctuations, foreign tax and legal regulations and political or economic instability that could materially adversely affect our operating results.

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        In connection with our international operations (including international operations under U.S. government contracts), we are subject to risks associated with operating in and selling to foreign countries, including:

        Although our international operations are not currently substantial, to the extent we expand our international operations, these and other risks associated with international operations are likely to increase. Although such risks have not harmed our operating results in the past, no assurance can be given that such risks will not materially adversely affect our operating results in the future.

If subcontractors on our prime contracts are able to secure positions as prime contractors, we may lose revenue.

        For each of the past several years, as the GSA schedule contracts and GWACs have increasingly been used as contract vehicles, we have received substantial revenue from government clients relating to work performed by other information technology providers acting as subcontractors to us. In some cases, companies that have not held GSA schedule contracts or secured positions as prime contractors on GWACs have approached us in our capacity as a prime contractor, seeking to perform services as our subcontractor for a government client. Some of these providers that are currently acting as subcontractors to us may in the future secure positions as prime contractors upon renewal of the GSA schedule or a GWAC contract. If one or more of our current subcontractors are awarded prime contractor status in the future, it could reduce or eliminate our revenue for the work they were performing as subcontractors to us. Revenue derived from work performed by our subcontractors represented approximately 13% of our revenue for each of fiscal 2002 and 2003, and approximately 11.6% of our revenue in the three months ended March 27, 2004.


Risks Related to Our Business

We have incurred net losses in the past and our revenue and operating results could be volatile.

        In fiscal 2003 and 2002, we had net income attributable to common stockholders of $7.4 million and $529,000, respectively. In the first three months ended March 27, 2004, we had net income attributable to common stockholders of $2.4 million. We incurred net losses attributable to common stockholders of $2.8 million and $2.3 million for fiscal 2001 and 2000, respectively. We cannot assure you that we will not incur net losses attributable to common stockholders in the future.

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        Our revenue and operating results may vary significantly from quarter to quarter. In particular, if the federal government does not pass, or delays passing, an appropriation act for each government fiscal year beginning on October 1, or fails to pass a resolution maintaining current funding levels until passage of an appropriation act, federal agencies may be forced to suspend our contracts, delay payments for work performed and delay the award of new and follow-on contracts and task orders due to a lack of funding. We are unable to predict the amount and timing of equipment purchases required by the U.S. Air Force Space Command C4I2SR contract and the recently awarded successor to that contract, the C4I2TSR contract. The timing of purchases under these contracts affects and will continue to affect our revenue and operating results, sometimes substantially, and we expect that these fluctuations will continue for the term of these contracts. Further, the rate at which the federal government procures technology may be negatively affected depending on priorities of presidential administrations or senior government officials. Therefore, our historical operating results may not be a good indication of our future performance. Our quarterly operating results may not meet the expectations of securities analysts or investors, which in turn may have an adverse effect on the market price of our common stock. Our quarterly operating results may also fluctuate due to impairment of goodwill charges required by recent changes in accounting standards.

We may lose money or generate less than anticipated profits if we do not accurately estimate the cost of our performance under fixed price or time and materials contracts.

        Some of our contracts require that we perform on a fixed price basis. We derived 26.6% of our total revenue in fiscal 2003 and 17.3% of our total revenue in fiscal 2002 from fixed price contracts. In addition, we derived 25.7% of our total revenue in the three months ended March 27, 2004 from fixed price contracts. A fixed price contract generally provides that we will receive a specified price for our performance under the contract, regardless of the cost to us of such performance. This requires that we accurately estimate the cost that we will incur to perform our obligations under any contract at the time that we submit our proposal or offer to the applicable government agency. When making proposals for engagements on a fixed price basis, we rely on our estimates of costs and timing for completing the projects. These estimates are subject to numerous variables and uncertainties, and there can be no assurance that the costs of performing under any fixed price contract will not exceed, perhaps substantially, our estimates. Any increased or unexpected costs or unanticipated delays in connection with the performance of fixed price contracts, including costs and delays caused by factors outside our control, could make these contracts less profitable than anticipated or could cause us to incur losses, which could be substantial, on these contracts. In the past, we have from time to time incurred losses on some fixed price contracts and our profits on some fixed price contracts have been less than anticipated. Our operating results could be materially adversely affected if the actual costs of performing under these contracts exceed our estimates.

        Many of our contracts are performed on a time and materials basis. A time and materials contract typically provides that we are paid a fixed hourly rate for direct labor costs expended and reimbursed for allowable materials, costs and expenses. We derived 35.1% of our total revenues in fiscal 2003 and 42.1% of our total revenues for fiscal 2002 from time and materials contracts. In addition, we derived 51.0% of our total revenue in the three months ended March 27, 2004 from time and materials contracts. While time and materials contracts are generally subject to less uncertainty than fixed price contracts, to the extent that our actual labor costs are higher than the contract rates, we may lose money on the contract.

Our margins and operating results may suffer if cost reimbursable contracts increase as a percentage of our total government contracts.

        In general, cost reimbursable contracts are the least profitable of our government contracts. Our cost reimbursable contracts generally provide for reimbursement of costs, which are determined to be reasonable, allowable and allocable to the contract, as well as payment of a fee representing the profit margin negotiated between us and the contracting agency, which may be fixed or performance based. Our

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time and materials contracts generally are more profitable than our cost reimbursable contracts. Cost reimbursable contracts contributed 38.3% and 40.6% of our total revenues in fiscal 2003 and fiscal 2002, respectively, and 23.3% of our total revenues in the three months ended March 27, 2004. To the extent that cost reimbursable contracts represent an increased proportion of our total government contracts, our operating results could be materially adversely affected.

Our markets are highly competitive, and many of the companies we compete against have substantially greater resources.

        We operate in highly competitive markets that include a large number of participants and involve intense competition to win contracts. Many of our competitors may compete more effectively than we can because they are larger, have greater financial and other resources, have better or more extensive relationships with government officials involved in the procurement process and have greater brand or name recognition. In order to stay competitive in our industry, we must attract and retain the highly skilled employees necessary to provide our services and keep pace with changing technologies and client preferences. In addition, some of our competitors have established alliances or strategic relationships among themselves or with third parties in order to increase their ability to address client needs. As a result, new competitors or alliances among competitors may emerge and compete more effectively than we can. There is also a significant industry trend towards consolidation which may result in the emergence of larger companies that may be better able to compete with us. If we are unable to compete effectively, our business could be materially adversely affected.

Our failure to attract and retain qualified employees, including our executive and senior management team, may adversely affect our business.

        Our continued success depends to a substantial degree on our ability to recruit and retain the technically skilled personnel we need to serve our clients effectively. Our business involves the development of tailored technology solutions for our clients, a process that relies heavily upon the expertise and services of our employees. Competition for skilled personnel in the information technology services industry is intense, and technology service companies often experience high attrition among their skilled employees. Recruiting and training these employees require substantial resources. Our failure to attract and retain technical personnel could increase our costs of performing our contracts, reduce our ability to meet our clients' needs, limit our ability to win new business and constrain our ability to grow.

        In addition to attracting and retaining qualified technical personnel, we believe that our success will depend on the continued employment of our executive and senior management team and its ability to generate new business and execute projects successfully. We believe that the personal reputations of our management team members and the business relationships between individual members of our management team and governmental officials involved in the procurement process and related areas are critical elements of obtaining and maintaining client engagements in our industry, particularly with agencies performing classified operations. To create and maintain these client relationships, identify potential business opportunities and establish our reputation among our current and potential clients, we depend on our senior management team. The loss of any of our senior executives could cause us to lose client relationships or new business opportunities, which could materially adversely affect our business.

A substantial majority of our historical growth has been due to acquisitions and we may have difficulty identifying and executing future acquisitions on favorable terms, which may adversely affect our results of operations and stock price.

        A substantial majority of our historical growth was the result of acquisitions, and the selective pursuit of acquisitions remains one of our key growth strategies. We cannot assure you that we will be able to identify and execute suitable acquisitions in the future on terms that are favorable to us, or at all.

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        We may encounter other risks in executing our acquisition strategy, including:

        In connection with any future acquisitions, we may decide to consolidate the operations of any acquired business with our existing operations or to make other changes with respect to the acquired business, which could result in special charges or other expenses. Our results of operations also may be adversely affected by expenses we incur in making acquisitions and, in the event that any goodwill resulting from present or future acquisitions is found to be impaired, by goodwill impairment charges. As of March 27, 2004, we had approximately $94.5 million of goodwill resulting from acquisitions on our balance sheet and, to the extent we make future acquisitions, the amount of goodwill could increase, perhaps substantially. Any of the businesses we acquire may also have liabilities or adverse operating issues.

        In addition, our ability to make future acquisitions may require us to obtain additional financing and we may be materially adversely affected if we cannot obtain additional financing for any future acquisitions. To the extent that we seek to acquire other businesses in exchange for our common stock, fluctuations in our stock price could have a material adverse effect on our ability to complete acquisitions and the issuance of common stock to acquire other businesses could be dilutive to our stockholders. To the extent that we use borrowings to acquire other businesses, our debt service obligations could increase substantially and relevant debt instruments may, among other things, impose additional restrictions on our operations, require us to comply with additional financial covenants or require us to pledge additional assets to secure our borrowings.

We may have difficulty integrating the operations of any companies we acquire, which may adversely affect our results of operations.

        The success of our acquisition strategy will depend upon our ability to successfully integrate our acquired businesses. The integration of these businesses into our operations may result in unforeseen events or operating difficulties, absorb significant management attention and require significant financial resources that would otherwise be available for the ongoing development of our business. These integration difficulties could include the integration of personnel with disparate business backgrounds, the transition to new information systems, coordination of geographically dispersed organizations, loss of key employees of acquired companies and reconciliation of different corporate cultures. For these or other reasons, we may be unable to retain key clients or to retain or renew contracts of acquired companies. Moreover, any acquired business may fail to generate the revenue or net income we expected or produce the efficiencies or cost-savings that we anticipated.

If we are unable to manage our growth, our business may be adversely affected.

        Sustaining our growth has placed significant demands on our management, as well as on our administrative, operational and financial resources. If we continue to grow, we must improve our operational, financial and management information systems and expand, motivate and manage our workforce. If we are unable to do so, or if new systems that we implement to assist in managing any future growth do not produce the expected benefits, our business, prospects, financial condition or operating results could be materially adversely affected.

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Systems failures may disrupt our business and have an adverse effect on our results of operations.

        Any systems failures, including failure of network, software or hardware systems, whether caused by us, a third-party service provider, unauthorized intruders and hackers, computer viruses, natural disasters, power shortages or terrorist attacks, could cause loss of data and interruptions or delays in our business or that of our clients. In addition, the failure or disruption of mail, communications or utilities could cause us to interrupt or suspend our operations or otherwise harm our business. Our property and business interruption insurance may be inadequate to compensate us for losses that may occur as a result of any system or operational failure or disruption, and insurance to cover these types of risks may not be available in the future on terms that we consider acceptable, if at all.

        The systems and networks that we maintain for our clients, although redundant in their design, could also fail. If a system or network we maintain were to fail or experience service interruptions, we might experience loss of revenue or face claims for damages or contract termination. Our liability insurance may be inadequate to compensate us for damages that we might incur and liability insurance to cover these types of risks may not be available in the future on terms that we consider acceptable, or at all.

If our subcontractors fail to perform their contractual obligations, our performance as a prime contractor and our ability to obtain future business could be materially and adversely impacted.

        Approximately 13% of our total revenue in each of fiscal 2003, fiscal 2002 and fiscal 2001, and approximately 11.6% of our total revenues in the three months ended March 27, 2004, was generated by work performed by subcontractors who perform a portion of the work we are obligated to deliver to our clients. A failure by one or more of our subcontractors to satisfactorily deliver on a timely basis the agreed-upon supplies and/or perform the agreed-upon services may materially and adversely affect our ability to perform our obligations as a prime contractor. In extreme cases, a subcontractor's performance deficiency could result in the federal government terminating our contract for default. A default termination could expose us to liability for excess costs of reprocurement by the government and have a material adverse effect on our ability to compete for future contracts and task orders.

Our indebtedness and debt service obligations may increase substantially and we will be subject to restriction under debt instruments.

        As of March 27, 2004, we had approximately $46.0 million of debt outstanding under our credit facility. Contemporaneously with the closing of our acquisition of MATCOM on January 21, 2004, we amended and restructured our prior credit facility and increased the borrowing capacity to $80.0 million, which consists of both revolving credit and term loans. Borrowings available under our amended credit facility were used as part of the acquisition price for MATCOM and will also be used to finance our future business needs, including acquisitions, when and if we identify suitable acquisition targets. Our leverage may increase as a result of any future acquisitions and, accordingly, the amount of our indebtedness will likely increase, perhaps substantially.

        Our indebtedness could have significant negative consequences, including:

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        Our credit facility bears interest at variable rates based upon prevailing market interest rates, which exposes us to the risk of increased interest rates.

        Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance, our debt will depend primarily on our future performance, which to a certain extent is subject to the economic, financial, competitive and other factors beyond our control. There can be no assurance that our business will continue to generate sufficient cash flow from operations in the future to service our debt or meet our other cash needs. If we are unable to generate this cash flow from our business, we may be required to refinance all or a portion of our existing debt, sell assets or obtain additional financing to meet our debt obligations and other cash needs. We cannot assure you that any such refinancing, sale of assets or additional financing would be possible on terms that we would find acceptable.

        If we fail to comply with the financial covenants in our amended credit facility, our lenders may exercise remedies, including requiring immediate repayment of all outstanding amounts. The financial covenants in our amended credit facility include the following:

        The borrowings and other amounts due under our amended credit facility are secured by substantially all of our current and future tangible and intangible assets, including accounts receivable, inventory and capital stock of our existing or future subsidiaries. Our ability to obtain other debt financing may therefore be adversely affected because the lenders under our amended credit facility will have a prior lien on our assets to secure amounts we owe to them. In addition, upon the occurrence of specified events of default under the amended credit facility, the lenders would be entitled to demand immediate repayment of all borrowings and other amounts outstanding under the facility and to realize upon the collateral pledged under the facility to satisfy our obligations to them. The events of default include, but are not limited to, a default by us under a material government contract, which is defined as a government contract with a remaining term in excess of six months pursuant to which at least $5,000,000 is payable under the terms of that contract, or a material contract, which is defined as a contract pursuant to which at least $5,000,000 is payable under the terms of that contract.

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        The credit facility also requires us to comply with certain covenants, including, among others, provisions:


Risks Related to Our Common Stock and
any Offering Made Pursuant to this Prospectus

Ownership of our stock is concentrated and this small group of stockholders may exercise substantial control over our actions.

        Based on shares outstanding as of May 3, 2004, investment partnerships and a limited liability company managed by Frontenac Company beneficially own approximately 32.9% of our outstanding stock, and our officers and directors beneficially own, in the aggregate, approximately 40.7% of our outstanding stock. The percentage of our shares owned by our directors and officers as set forth in the preceding sentence includes the shares owned by partnerships and a limited liability company managed by Frontenac Company because two of our directors are affiliates of Frontenac Company and are therefore deemed to beneficially own those shares. These stockholders, if acting together, have the ability to substantially influence the election of directors and other corporate actions. In addition, these partnerships and this limited liability company, if acting together, also have the ability to substantially influence the election of directors and other corporate actions. This concentration of ownership may also have the effect of delaying or preventing a change in our control.

Our management could apply the proceeds of any offering made pursuant to this prospectus to uses that do not increase our market value or improve our operating results.

        Unless otherwise indicated in the prospectus supplement, we may apply the net proceeds from any offering made pursuant to this prospectus to repay debt, to acquire other business and technologies and for working capital and other general corporate purposes. We have not reserved or allocated the net proceeds for any specific purpose, and we cannot state with certainty how our management will use the net proceeds. Accordingly, our management will have considerable discretion in applying the net proceeds. We may use the net proceeds for purposes that do not result in any increase in our market value or improve our results of operations.

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Provisions of our charter and bylaws and Delaware law make a takeover of our company more difficult.

        Our basic corporate documents and Delaware law contain provisions that might enable our management to resist an attempt to take over our company. For example, our board of directors can issue shares of common stock and preferred stock without stockholder approval, and the board could issue stock to dilute and adversely affect various rights of a potential acquiror. Other provisions of our charter and bylaws that could deter or prevent a third party from acquiring us include:

        We are subject to Section 203 of the Delaware General Corporation Law that, subject to exceptions, would prohibit us from engaging in any business combination with any interested stockholder, as defined in that section, for a period of three years following the date on which that stockholder became an interested stockholder.

        The board could use these and other provisions to discourage, delay or prevent a change in the control of our company or a change in our management. These provisions might also discourage, delay or prevent an acquisition of our company at a price that investors may find attractive. These provisions could also make it more difficult for our stockholders to elect directors and take other corporate actions and could limit the price that investors might be willing to pay for shares of our common stock.

Future sales of shares of our common stock and the resulting dilution that would occur with such sales could cause the market price of our common stock to decline.

        Sales of a substantial number of shares of common stock in the public market in the course of any offering made pursuant to this prospectus, or the perception that such sales could occur, could materially adversely affect the market price of our common stock and make it more difficult for us to sell equity securities in the future at a time and price we deem appropriate. As of May 3, 2004, we had 8,468,616 shares of common stock outstanding.

The market price of our common stock could be volatile and could decline following any offering made pursuant to this prospectus, resulting in a substantial loss on your investment.

        The stock market in general, and the market for technology-related stocks in particular, has been highly volatile. As a result, the market price of our common stock may be similarly volatile, and investors in our common stock may experience a decrease, which could be substantial, in the value of their stock, including decreases that may be unrelated to our operating performance or prospects. The price of our common stock could be subject to fluctuations in response to a number of factors, including those listed elsewhere in this "Risk Factors" section.

        In the past, securities class action litigation has been initiated against companies following periods of volatility in their stock price. If we were the target of this type of litigation, it could result in substantial costs and divert our management's attention and resources, and it could also require us to make substantial payments to satisfy judgments or to settle litigation.

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A portion of the net proceeds from any offering made pursuant to this prospectus may be used to repay loans from one of the potential underwriters of any offering made pursuant to this prospectus, which may present a potential conflict of interest.

        We may use a portion of the net proceeds from any offering made pursuant to this prospectus to repay borrowings outstanding under our existing credit facility. An affiliate of Wachovia Capital Markets, LLC is a lender under that credit facility and may receive a portion of the net proceeds from any offering made pursuant to this prospectus through the repayment of those borrowings, which may present a potential conflict of interest if Wachovia Capital Markets, LLC serves as an underwriter of any offering made pursuant to this prospectus. If applicable, any offering made pursuant to this prospectus will be made pursuant to the provisions of Conduct Rule 2710(c)(8) of the National Association of Securities Dealers, Inc., which is intended to address potential conflicts of interest involving underwriters.

A substantial number of shares of our common stock will be eligible for sale in the near future, which could cause our common stock price to decline significantly.

        If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market following any offering made pursuant to this prospectus, the market price of our common stock could decline significantly. These sales may also make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. If our executive officers, directors or any of our stockholders enter into lock-up agreements in connection with any offering made pursuant to this prospectus, then upon the expiration of those lock-up agreements, the shares owned by those persons will become available for sale in the public market. The underwriters of any offering made pursuant to this prospectus may decide to release the executive officers, directors and stockholders from their lock-up agreements with the underwriters at any time and without notice, which would allow for earlier sale of shares in the public market. As restrictions on resale end, the market price of our common stock could drop significantly if the holders of restricted shares sell them or are perceived by the market as intending to sell them.


SI INTERNATIONAL, INC.

Overview

        We are a provider of information technology and network solutions primarily to the federal government. Our clients include the U.S. Air Force Space Command, the Department of State, the Federal Retirement Thrift Investment Board, the Department of Homeland Security, the Department of Agriculture, the U.S. Navy, the National Institutes of Health and the intelligence community. In addition, we provide our services to a small number of commercial entities. We combine our technology and industry expertise to provide a full spectrum of state-of-the-practice solutions and services, from design and development to implementation and operations, to assist our clients in achieving their missions. Our service offerings focus primarily on our clients' mission-critical needs in the areas of:

        Our principal executive offices are located at 12012 Sunset Hills Road, Reston, Virginia 20190, and our telephone number is (703) 234-7000.

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USE OF PROCEEDS

        Unless otherwise specified in the applicable prospectus supplement, we will use the net proceeds of a sale of securities by us for one or more of the following:


RATIO OF EARNINGS TO FIXED CHARGES

        The following table sets forth our historical consolidated ratio of earnings to fixed charges and ratio of earnings to fixed charges and preferred stock dividends for the periods indicated:

 
   Three Months Ended
    
    
    
    
    
 
   Fiscal Year
 
   March 27,
2004
   March 29,
2003
 
   2003
   2002
   2001
   2000
   1999
Ratio of Earnings to Fixed Charges   4.64   5.10   6.27   1.80   0.99   0.94   1.65
Ratio of Earnings to Fixed Charges and Preferred Stock Dividends   4.64   5.10   6.27   1.29   0.69   0.73   1.16
   
 
 
 
 
 
 

        For purposes of calculating the ratio of earnings to fixed charges and the ratio of earnings to fixed charges and preferred stock dividends, "earnings" represents pre-tax income from continuing operations plus fixed charges. The term "fixed charges" means the sum of interest expensed, amortization of deferred financing costs and debt discounts, and an estimate of the interest within rental expense.

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DESCRIPTION OF EQUITY SECURITIES

        We are a Delaware corporation. Your rights as a stockholder are governed by the Delaware General Corporation Law, our second restated certificate of incorporation and our amended and restated bylaws, as amended. The following summary of some of the material terms, rights and preferences of the capital stock is not complete. You should read our second restated certificate of incorporation, which we refer to as our charter, and amended and restated bylaws, as amended, which we refer to as our bylaws, for more complete information.

Authorized Shares

        Our charter allows us to issue up to 50,000,000 shares of common stock, par value $.01 per share, and 10,000,000 shares of preferred stock, par value $.01 per share. As of May 3, 2004, we had 8,468,616 shares of common stock outstanding and no shares of preferred stock outstanding.

Stockholder Liability

        Under Delaware law, you will not be personally liable for any obligation of ours solely because you are a stockholder. Notwithstanding this limitation, common law theories of "piercing the corporate veil" may be used to impose liability on stockholders in certain instances. Also, to the extent, that we conduct operations in another jurisdiction where the law of that jurisdiction does not recognize the limitations of liability afforded by Delaware law, a third party could attempt to assert a claim against our stockholders based on our obligations.

Common Stock

        Terms.    The holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders and do not have cumulative voting rights. Subject to the rights of any outstanding shares of our preferred stock, the holders of outstanding shares of common stock are entitled to receive dividends out of assets legally available at times and in amounts as the board may determine from time to time. We do not intend to pay cash dividends in the foreseeable future and we will be prohibited from paying dividends on our common stock pursuant to the terms of the amended credit facility that we entered into in connection with our acquisition of MATCOM. Upon the liquidation, dissolution or winding up of our company, the holders of our common stock are entitled to share ratably in all assets remaining after payment of, or provision for, all of our liabilities, subject to prior distribution rights of preferred stock, if any, then outstanding. The common stock has no preemptive or conversion rights and is not subject to redemption. All outstanding shares of common stock are fully paid and nonassessable, and the shares of common stock to be issued in this offering will be fully paid and nonassessable.

        Stock Exchange Listing.    Our common stock is traded on the Nasdaq National Market under the trading symbol "SINT."

        Transfer Agent and Registrar.    The transfer agent and registrar for our common stock is Wachovia Bank, N.A.

Preferred Stock

        Under the terms of our charter, the board of directors is authorized, without any need for action by our stockholders but subject to any limitations prescribed by law, to issue shares of our preferred stock in one or more series. Each series shall consist of such number of shares and have the rights, preferences, powers and restrictions, such as dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices and liquidation preferences, as the board of directors shall determine. The board of directors may issue preferred stock with voting or conversion rights that may have the effect of

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delaying, deferring or preventing a change in control of our company and that could adversely affect the market price of the common stock and the voting and other rights of the holders of common stock. We currently do not have any outstanding shares of preferred stock, and we currently have no plans to issue any preferred stock.

        Terms.    You should refer to the prospectus supplement relating to the offering of any preferred stock for specific terms, including the following terms:

        The terms of any preferred stock we issue through this prospectus will be set forth in a certificate of designation. We will file the certificate of designation as an exhibit to the registration statement that includes this prospectus, or as an exhibit to a filing with the SEC that is incorporated by reference into this prospectus. The description of preferred stock in any prospectus supplement will not describe all of the terms of the preferred stock in detail. You should read the applicable certificate of designation for a complete description of all of the terms.

        Rank.    Unless we say otherwise in a prospectus supplement, the preferred stock offered through that supplement will, with respect to dividend rights and rights upon our liquidation, dissolution or winding up, rank:

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The term "equity securities" does not include convertible debt securities.

        Dividends.    Subject to any preferential rights of any outstanding stock or series of stock, our preferred stockholders are entitled to receive dividends, when and as authorized by our board of directors, out of legally available funds. We are prohibited from paying dividends on any preferred stock pursuant to the terms of the amended credit facility that we entered into in connection with the acquisition of MATCOM.

        Redemption.    If we provide for a redemption right in a prospectus supplement, the preferred stock offered through that supplement will be subject to mandatory redemption or redemption at our option, in whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in that supplement.

        Liquidation Preference.    As to any shares of preferred stock offered through this prospectus, the applicable supplement shall provide that, upon the voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of those shares of preferred stock shall receive, before any distribution or payment shall be made to the holders of any other class or series of stock ranking junior to those shares of preferred stock in our distribution of assets upon any liquidation, dissolution or winding up, and after payment or provision for payment of our debts and other liabilities, out of our assets legally available for distribution to stockholders, liquidating distributions in the amount of any liquidation preference per share (set forth in the applicable supplement), plus an amount, if applicable, equal to all distributions accrued and unpaid thereon (not including any accumulation in respect of unpaid distributions for prior distribution periods if those shares of preferred stock do not have a cumulative distribution). After payment of the full amount of the liquidating distributions to which they are entitled, the holders of those shares of preferred stock will have no right or claim to any of our remaining assets. In the event that, upon our voluntary or involuntary liquidation, dissolution or winding up, the legally available assets are insufficient to pay the amount of the liquidating distributions on all of those outstanding shares of preferred stock and the corresponding amounts payable on all of our shares of other classes or series of equity security ranking on a parity with those shares of preferred stock in the distribution of assets upon liquidation, dissolution or winding up, then the holders of those shares of preferred stock and all other such classes or series of equity security shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

        If the liquidating distributions are made in full to all holders of preferred stock entitled to receive those distributions prior to any other classes or series of equity security ranking junior to the preferred stock upon our liquidation, dissolution or winding up, then our remaining assets shall be distributed among the holders of those junior classes or series of equity shares, in each case according to their respective rights and preferences and their respective number of shares.

        Voting Rights.    Unless otherwise indicated in the applicable supplement, holders of our preferred stock will not have any voting rights, except as may be required by applicable law or any applicable rules and regulations of the Nasdaq National Market.

        Conversion Rights.    The terms and conditions, if any, upon which any series of preferred stock is convertible into common stock will be set forth in the prospectus supplement relating to the offering of those shares of preferred stock. These terms typically will include:

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        Transfer Agent and Registrar.    We will identify the transfer agent and registrar for any series of preferred stock issued through this prospectus in a prospectus supplement.

Depositary Shares

        General.    We may issue receipts for depositary shares, each of which will represent a fractional interest of a share of a particular series of preferred stock. We will deposit the shares of preferred stock of any series represented by depositary shares with a depositary under a deposit agreement. We will identify the depositary in a prospectus supplement. Subject to the terms of the deposit agreement, if you own a depositary share, you will be entitled, in proportion to the fraction of the shares of preferred stock represented by your depositary share, to all of the rights and preferences to which you would be entitled if you owned the shares of preferred stock represented by your depositary share directly (including dividend, voting, redemption, conversion, subscription and liquidation rights).

        The depositary shares will be represented by depositary receipts issued pursuant to the applicable deposit agreement. Immediately following the issuance and delivery of our preferred stock to the depositary, we will cause the depositary to issue, on our behalf, the depositary receipts. Upon request, we will provide you with copies of the applicable form of deposit agreement and depositary receipt.

        Dividends and Other Provisions.    If you are a "record holder" (as defined below) of depositary receipts and we pay a cash dividend or other cash distribution with respect to the shares of preferred stock represented by your depositary share, the depositary will distribute all cash dividends or other cash distributions it receives in respect of the shares of preferred stock represented by your depositary receipts in proportion to the numbers of shares of depositary shares you owned on the record date for that dividend or distribution.

        If we make a distribution in a form other than cash, the depositary will distribute the property it receives to you and all other record holders of depositary receipts in an equitable manner, unless the depositary determines that it is not feasible to do so. If the depositary decides it cannot feasibly distribute the property, it may sell the property and distribute the net proceeds from the sale to you and the other record holders. The amount the depositary distributes in any of the foregoing cases may be reduced by any amounts that we or the depositary is required to withhold on account of taxes.

        A "record holder" is a person who holds depositary receipts on the record date for any dividend, distribution or other action. The record date for depositary shares will be the same as the record date for the shares of preferred stock represented by those depositary receipts.

        Withdrawal of Preferred Stock.    If you surrender your depositary receipts, the depositary will be required to deliver certificates to you evidencing the number of shares of preferred stock represented by those receipts (but only in whole shares). If you deliver depositary receipts representing a number of depositary shares that is greater than the number of whole shares to be withdrawn, the depositary will deliver to you at the same time a new depositary receipt evidencing the fractional shares.

        Redemption of Depositary Shares.    If we redeem a series of preferred stock represented by depositary receipts, the depositary will redeem depositary shares from the proceeds it receives after redemption of the preferred stock. The redemption price per depositary share will be equal to the applicable fraction of the redemption price per share payable with respect to that series of preferred stock. If fewer than all the depositary shares are to be redeemed, the depositary will select shares to be

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redeemed by lot, pro rata or by any other equitable method it may determine. After the date fixed for redemption, the depositary shares called for redemption will no longer be outstanding. All rights of the holders of those depositary shares will cease, except the right to receive the redemption price that the holders of the depositary shares were entitled to receive upon redemption. Payments will be made when holders surrender their depositary receipts to the depositary.

        Voting the Preferred Stock.    When the depositary receives notice of any meeting at which the holders of preferred stock are entitled to vote, the depositary will mail information contained in the notice to you as a record holder of the depositary shares relating to the preferred stock. As a record holder of the depositary shares on the record date (which will be the same date as the record date for the preferred stock), you will be entitled to instruct the depositary as to how you would like your votes to be exercised. The depositary will endeavor, insofar as practicable, to vote the number of shares of preferred stock represented by your depositary shares in accordance with your instructions. We will agree to take all reasonable action that the depositary may deem necessary to enable the depositary to do this. If you do not send specific instructions the depositary will not vote the shares of preferred stock represented by your depositary shares.

        Liquidation Preference.    In the event of our liquidation, dissolution or winding up, whether voluntary or involuntary, you will be entitled, as a record holder of depositary shares, to the fraction of the liquidation preference accorded each applicable share of preferred stock, as has been set forth in a prospectus supplement.

        Conversion of Preferred Stock.    Our depositary shares, as such, are not convertible into common stock or any of our other securities or property. Nevertheless, if so specified in a prospectus supplement, the depositary receipts may be surrendered by their holders to the depositary with written instructions to the depositary to instruct us to cause conversion of the preferred stock represented by the depositary shares into whole common or preferred stock, as the case may be. We will agree that, upon receipt of this type of instruction and any amounts payable, we will convert the depositary shares using the same procedures as those provided for delivery of preferred stock to effect such conversion. If the depositary shares are to be converted in part only, one or more new depositary receipts will be issued for any depositary shares not to be converted. No fractional shares of common stock will be issued upon conversion, and if such conversion will result in issuance of a fractional share, we will pay an amount of cash equal to the value of the fractional interest based upon the closing price of the common stock on the last business day prior to the conversion.

        Amendment and Termination of the Deposit Agreement.    We and the depositary may amend the form of depositary receipt and any provision of the deposit agreement at any time. However, any amendment which materially and adversely alters your rights as a holder of depositary shares will not be effective unless the holders of at least a majority of the depositary shares then outstanding approve the amendment. The deposit agreement will only terminate if:

        Resignation and Removal of Depositary.    The depositary may resign at any time by delivering notice to us of its election to do so. Additionally, we may remove the depositary at any time. Any resignation or removal will take effect when we appoint a successor depositary and the successor accepts the appointment. We must appoint a successor depositary within 60 days after delivery of the notice of

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resignation or removal. A successor depositary must be a bank or trust company having its principal office in the U.S. and having a combined capital and surplus of at least $50 million.

        Charges of Depositary.    We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay charges of the depositary in connection with the initial deposit of the shares of preferred stock and issuance of depositary receipts, all withdrawals of preferred stock by owners of the depositary shares and any redemption of the shares of preferred stock. You will pay other transfer and other taxes, governmental charges and other charges expressly provided for in the deposit agreement.

        Miscellaneous.    The depositary will forward to you all reports and communications from us that we are required, or otherwise determine, to furnish to the holders of the preferred stock.

        Neither we nor the depositary will be liable under the deposit agreement to you other than for the depositary's gross negligence, willful misconduct or bad faith. Neither we nor the depositary will be obligated to prosecute or defend any legal proceeding in respect of any depositary shares or preferred stock unless satisfactory indemnity is furnished. We and the depositary may rely upon written advice of counsel or accountants, or upon information provided by persons presenting shares of preferred stock for deposit, holders of depositary receipts or other persons believed to be competent and on documents believed to be genuine.

Warrants

        We may issue warrants for the purchase of common or preferred stock. If we offer warrants, we will describe the terms in a prospectus supplement. Warrants may be offered independently, together with other securities offered by any prospectus supplement, or through a dividend or other distribution to stockholders and may be attached to or separate from other securities. Warrants may be issued under a written warrant agreement to be entered into between us or the holder or beneficial owner, or we could issue warrants pursuant to a written warrant agreement with a warrant agent specified in a prospectus supplement. A warrant agent would act solely as our agent in connection with the warrants of a particular series and would not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of such warrants.

        The following are some of the warrant terms that could be described in a prospectus supplement:

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Registration Rights Agreement

        In October 1998, we entered into a registration rights agreement with various holders of our outstanding common stock. Based on information provided to us by these various holders as of May 3, 2004, there are approximately 3,500,000 shares of common stock covered by the registration rights agreement. Pursuant to the terms of the registration rights agreement, these stockholders have the right to require us to file a registration statement on Forms S-1 under the Securities Act to permit their shares to be sold in the public market. This right may be exercised on three occasions. These stockholders also have the right to require us on unlimited occasions to file additional registration statements on Form S-3 in order to permit their shares to be sold in the public markets. In addition, in the event that we decide to register any of our securities under the Securities Act, we are required, with certain exceptions, to include in our registration the registrable securities of any holder who so requests. The expenses incurred in such registrations will be borne by us. We have included 1,500,000 shares of common stock held by these stockholders for registration pursuant to this registration statement.

        Upon the sale of all of the securities registered by the selling stockholders pursuant to this registration statement and assuming no other sales by such persons, the holders of approximately 2,500,000 shares of our outstanding common stock will continue to have rights under the registration rights agreement.

Certain Provisions of Delaware Law and Our Charter and Bylaws

        The following summary of certain provisions of the Delaware General Corporation Law and our charter and bylaws is not complete. You should read the Delaware General Corporation Law and our charter and bylaws for more complete information. The business combination provisions of Delaware law, which are discussed below, and the provisions of our charter and bylaws that are discussed below could have the effect of delaying or preventing a takeover transaction or a change in our control. These provisions could have the effect of discouraging offers to acquire us and of increasing the difficulty of consummating any such offer, even if the offer contains a premium price for holders of common stock or otherwise benefits stockholders.

        Delaware Takeover Statute.    We are subject to Section 203 of the General Corporation Law of the State of Delaware, which, in general, prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the time that the person or entity became an interested stockholder. A business combination includes mergers and asset sales involving the interested stockholder and other transactions resulting in a financial benefit to the interested stockholder. An interested stockholder is, in general, any entity or person who owns, or within the last three years has owned, 15% or more of the outstanding voting stock. This provision could discourage takeover attempts, including attempts that might result in the payment of a premium over the market price for shares of our common stock.

        Removal of Directors.    Our charter provides that, subject to the rights of the holders of any series of preferred stock then outstanding, directors may be removed only for cause by the affirmative vote of holders of two-thirds of the shares of our stock that are entitled to vote. Any vacancy on the board of directors, regardless of the reason for the vacancy and subject to the rights of the holders of any series of preferred stock then outstanding, may be filled only by vote of the majority of the directors then in office. The limitations on the removal of directors and filling of vacancies could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, control of us.

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        Advance Notice.    Our charter also provides that all stockholder actions must be effected at a duly called meeting and may not be taken by written action in lieu of a meeting. All stockholder action must be properly brought before any stockholder meeting which, according to our bylaws, means that proper notice must be given for, or waived at, a stockholder meeting. In addition, special stockholder meetings may only be called by the Chairman of the Board, the President or pursuant to a resolution adopted by a majority of our entire board of directors. These provisions could have the effect of delaying stockholder actions that are favored by the holders of a majority of our outstanding voting securities until a meeting is called. These provisions could also discourage a potential acquiror from making a tender offer for our common stock because, even if able to acquire a majority of our outstanding voting securities, a potential acquiror would only be able to take actions such as electing new directors or approving business combinations or mergers at duly called stockholder meeting, and not by written consent.

        Staggered Board.    Our charter provides for the division of our board of directors into three classes with staggered three-year terms. The existence of a staggered board of directors could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, control of our board of directors.

        Limitations of Liability and Indemnification Matters.    Pursuant to our bylaws, each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer of our company or is or was serving at our request as a director, officer, employee or agent of another company or of a partnership, joint venture trust or other enterprise, will be indemnified and held harmless by us to the fullest extent authorized by the Delaware General Corporation Law against all expense, liability and loss reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification will continue until the indemnitee has ceased to be a director, officer, employee or agent.

        Our charter specifically provides that our directors are not personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability:

provided that, if the Delaware General Corporation Law is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the amended Delaware General Corporation Law.

        We have entered into indemnity agreements with our directors and certain of our officers, which provide, among other things, that we will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director or executive officer of the Company, and otherwise to the fullest extent permitted under Delaware law and our bylaws. These agreements are in addition to the indemnification provided to our officers under our bylaws in accordance with Delaware law.


DESCRIPTION OF DEBT SECURITIES

        We may use this prospectus to offer debt securities. If we offer debt securities, we will prepare and distribute a prospectus supplement that describes the specific terms of the debt securities. In this section of the prospectus, we describe the general terms we expect all debt securities to have. We also identify

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some of the specific terms that will be described in a prospectus supplement. Although we expect that any debt securities we offer with this prospectus will have the general terms we describe in this section, our debt securities may have terms that are different from or inconsistent with the general terms we describe here. Therefore, you should read the prospectus supplement carefully.

General Terms of Debt Securities

        Unless we say otherwise in a prospectus supplement, debt securities we offer through this prospectus:

        Senior debt securities will rank equally with all of our other unsecured and unsubordinated obligations. Subordinated debt securities will be subordinate and junior in right of payment to all of our present and future senior debt in the manner we describe in a prospectus supplement.

        If the debt securities are guaranteed by one or more of our subsidiaries, unless we say otherwise in a prospectus supplement, the guarantee:

        We may incur additional debt, subject to limitations in the agreements governing our revolving credit facilities and other notes we may have issued.

        Unless we say otherwise in a prospectus supplement:

The Indentures

        Any debt securities we offer through this prospectus will be issued under an indenture between us and a trustee. We have filed with the SEC two "base indentures" that are exhibits to the registration statement that includes this prospectus. The senior indenture describes the general terms of senior debt securities we may issue. In addition to describing the general terms of subordinated debt securities that we may issue, the subordinated indenture includes additional terms describing the subordination provisions of these securities. The indentures will be subject to the Trust Indenture Act of 1939, as amended.

        The base indentures do not include all the terms of debt securities we may issue through this prospectus. If we issue debt securities through this prospectus, our Board of Directors will establish the additional terms for each series of debt securities. The additional terms will be set forth in a supplemental indenture or in a resolution of our Board of Directors. The base indentures describe the additional terms

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that may be established and we summarize the additional terms that may be established under "—Additional Terms of Debt Securities," below.

        We have summarized the provisions of the base senior indenture and the base subordinated indenture below. The summary is not complete. You should read the indentures for provisions that may be important to you. The extent, if any, to which the provisions of the base indentures apply to particular debt securities will be described in the prospectus supplement relating to those securities. You should read the prospectus supplement for more information regarding any particular issuance of debt securities.

Additional Terms of Debt Securities

        As described above, the terms of a particular series of debt securities we offer through this prospectus will be established by our Board of Directors when we issue the series. We will describe the terms of the series in a prospectus supplement. The base indentures provide that the terms that may be established include the following:

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Form of Securities and Related Matters

        Registered or Bearer Form.    Debt securities may be offered in either registered or bearer form.

        Denominations.    Unless we say otherwise in a prospectus supplement, we will issue debt securities in denominations of:

        Payment Currencies and Indexed Securities.    We may offer debt securities for which:

        The other currency may be a currency unit comprised of various currencies. Payments on debt securities may also be based on an index.

        Payment, Transfer and Exchange.    Unless we say otherwise in a prospectus supplement, we will maintain an office or agency for paying principal, interest and other amounts on the debt securities. We will notify you of the location of that office and of any change in the office's location. At our option, however, we may make any interest payments on debt securities issued in registered form by:

        Unless we say otherwise in a prospectus supplement, we will pay interest to the person whose name is in the register at the close of business on the regular record date for such interest.

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        We will describe in a prospectus supplement how we will pay amounts owing on bearer securities. We will only pay amounts owing on bearer securities at an office outside the United States.

        Unless we say otherwise in a prospectus supplement, you may transfer or exchange debt securities issued in registered form at an agency that we designate. You may transfer or exchange debt securities without service charge, although we may require you to pay any related tax or other governmental charge.

Global Securities

        We may issue debt securities of a series in the form of one or more fully registered global securities. Each registered global security will:

        If we issue a registered global security, we will only transfer or exchange it for another global security issued to the depositary, its successor or their nominees, until we issue securities in definitive form.

        After we issue a registered global security and deposit that registered global security with or on behalf of the depositary, the depositary will credit on its book-entry registration and transfer system the respective principal amounts of the debt securities represented by the registered global security to the accounts of institutions that have accounts with the depositary. We refer to institutions that have accounts with the depositary as "participants." The underwriters or agents engaging in the distribution of the debt securities will designate the accounts to be credited. We will designate the accounts to be credited if we offer and sell the debt securities directly. You may only own a beneficial interest in registered debt securities if you are a participant or hold your interest through a participant. Your interest will be shown on, and transfers of your interest will only be effected through, records maintained by the depositary for the registered global security or by its nominee and/or records maintained by the participants.

        We will treat the depositary for a registered global security, or its nominee, as the sole owner or holder of the debt security represented by the registered global security for all purposes under each indenture as long as it is the owner of the debt security. Accordingly, if you own a beneficial interest in a registered global security, you must rely on the procedures of the depositary (and, if you are not a participant, you must rely on the procedures of the participant through which you own your interest), to exercise any of your rights under the indenture. We understand that under existing industry practices, depositaries authorize participants to give or take instructions or take actions required or permitted under indentures, and participants authorize beneficial owners owning through such participants to give or take instructions or actions or act upon the instructions of beneficial owners holding through them.

        Unless we say otherwise in a prospectus supplement, we will make payments with respect to principal, premium, if any, and interest on the debt securities represented by a registered global security to the depositary or its nominee, as the case may be. We expect that the depositary will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the registered global security. We also expect that participants will act pursuant to standing instructions and customary practices. We, the respective trustees and our agents or agents of the respective trustees will not have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in any registered global security, or for maintaining, supervising or reviewing any records relating to such beneficial interests.

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        Unless we say otherwise in a prospectus supplement, we will issue debt securities in certificated form in exchange for a registered global security:

        In addition, unless we say otherwise in a prospectus supplement, we will have the right not to have any of the debt securities of a series represented by one or more registered global securities. If we make that determination, we will issue debt securities of such series in certificated form in exchange for all of the registered global securities representing such series of debt securities.

        You should note that the laws of some states may require that you take physical delivery of global securities in definitive form. Such laws may impair your ability to own, transfer or pledge beneficial interests in global securities.

        The debt securities of a series may also be issued in whole or in part in the form of one or more bearer global securities that will be deposited with a depositary, or its nominee, identified in a prospectus supplement. We may issue bearer global securities in temporary or permanent form. The specific terms and procedures, including the specific terms of the depositary arrangement, with respect to any portion of a series of debt securities to be represented by one or more bearer global securities will be described in a prospectus supplement.

Certain Covenants

        We will describe any material covenants in respect of any series of debt securities in a prospectus supplement.

Consolidation, Merger, Sale of Assets

        Unless we say otherwise in a prospectus supplement, each indenture will provide that we will not, in a single transaction or a series of related transactions, engage in any of the following transactions if any of these transactions would result in a sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of our property and assets to any other person or group of affiliated persons:

        In order to engage in any such transaction, we must satisfy all of the following conditions:

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        Unless we say otherwise in a prospectus supplement, each indenture for debt securities that are guaranteed will provide for similar restrictions on any guarantor.

Subordination

        Generally.    Unless we say otherwise in a prospectus supplement, the payment of principal, premium, if any, and interest on subordinated debt securities will be subordinated (or junior) to the prior payment in full of all of any of our present and future "senior debt." This means that we must pay all present and future senior debt before we pay amounts due to holders of subordinated debt securities if we liquidate, dissolve, reorganize or go through a similar process. After making these payments, we may not have sufficient assets remaining to pay the amounts due to holders of subordinated debt securities or equity securities.

        We will describe what debt is defined as "senior" with respect to any subordinated debt securities we offer in a prospectus supplement, but senior debt will generally include bank debt and certain other pre-existing debts.

        Payment Blockage for Payment Defaults.    Unless we say otherwise in a prospectus supplement, if we have defaulted in the payment of any "designated senior debt," we may not:

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        We will describe "designated senior debt" in a prospectus supplement. This prohibition will not affect any payment we have already made to defease debt securities (as described under "—Defeasance or Covenant Defeasance of Indenture," below).

        We must resume payment on subordinated debt securities, and make any payments we have missed, when one of the following has occurred:

        Payment Blockage for Non-Payment Defaults.    Unless we say otherwise in a prospectus supplement, we will also be prohibited from paying any amounts or distributing any assets as described with respect to payment defaults if:


        Unless we say otherwise in a prospectus supplement, we will be required to suspend payments and distributions on our subordinated debt securities starting when we receive notice of the applicable default. We may and must resume payments on our subordinated debt securities, and make any payments we have missed, upon the earliest of:

        Any number of notices of non-payment defaults may be given, but during any 365-day consecutive period only one blockage period may commence and the period may not exceed 179 days. No non-payment default with respect to senior debt that existed or was continuing on the date a blockage period for our subordinated debt securities commenced may be made the basis of another blockage period for those securities whether or not within a period of 365 consecutive days, unless at least 90 consecutive days have elapsed since the default was cured or waived.

        Subsidiary Guarantees.    We will tell you in a prospectus supplement whether and to what extent debt securities will be guaranteed by one or more of our subsidiaries. Unless we say otherwise in a prospectus supplement, any guarantee of subordinated debt securities will be an unsecured subordinated obligation of the guarantor. As such, the guarantees will either rank on an equal basis with or senior to all other existing and future debt of the guarantor that is expressly subordinated to senior debt of the subsidiary. Unless we say otherwise in a prospectus supplement:

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        Structural Subordination.    Debt securities may be offered without guarantees, and even if there are guarantees, any subsidiary may elect not to join in the guarantee. If any non-guarantor entity is involved in a bankruptcy, liquidation or reorganization, the non-guarantor entity will pay the holders of its debt and its trade creditors before it will be able to distribute any assets to its parent. The indentures may not limit the amount of debt that these entities may incur. Therefore, you should only look to our assets and any assets of the guarantor entities for repayment of obligations under the debt securities.

Default Provisions

        Events of Default.    Unless we say otherwise in a prospectus supplement, each of the following is an event of default as to any of our senior or subordinated debt securities:

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        Waiver of Default.    Unless we say otherwise in a prospectus supplement, holders of not less than a majority of the debt securities of a series may waive any past default except for:

        Acceleration of Payment.    Unless we say otherwise in a prospectus supplement, each indenture will provide that if an event of default (other than one of the events specified in clauses 8, 9 and 10 above) occurs and continues, the trustee or the holders of not less than 25% in aggregate principal amount of the debt securities of the applicable series outstanding may, and the trustee at the request of such holders shall, declare all unpaid principal of, premium, if any, and accrued interest on, all the debt securities of the applicable series to be due and payable immediately by a notice given in writing to us (and to the trustee if given by the holders of the debt securities of the applicable series). The trustee may, then, at its discretion, proceed to protect and enforce the rights of the holders of the applicable debt securities by appropriate judicial proceeding. Unless we say otherwise in a prospectus supplement, if an event of

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default specified in clauses 8, 9 and 10 above occurs and continues, then all the debt securities of the applicable series shall without further action become and be immediately due and payable, in an amount equal to the principal amount of the debt securities of the applicable series, together with accrued and unpaid interest, if any, to the date the debt securities become due and payable, without any declaration or other act on the part of the trustee or any holder. The trustee or, if notice of acceleration is given by the holders of the debt securities of the applicable series, the holders of the debt securities of the applicable series shall give notice to the agent under any credit agreement of such acceleration.

        Waiver of Acceleration.    Unless we say otherwise in a prospectus supplement, each indenture will provide that, after a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders of a majority in aggregate principal amount of the debt securities, by written notice to us and the trustee, may rescind and annul such declaration if:

        Notices of Default.    Unless we say otherwise in a prospectus supplement, each indenture will provide that we are also required to notify the trustee within five business days of the occurrence of any default. Unless we say otherwise in a prospectus supplement, we are required to deliver to the trustee, on or before a date not more than 60 days after the end of each fiscal quarter and not more than 120 days after the end of each fiscal year, a written statement as to compliance with the indenture, including whether or not any default has occurred.

        Obligations of Trustee.    Unless we say otherwise in a prospectus supplement, the trustee is under no obligation to exercise any of the rights or powers vested in it by the indenture at the request or direction of any of the holders of the debt securities unless they shall have offered to the trustee security or indemnity satisfactory to the trustee against the costs, expenses and liabilities that might be incurred thereby.

        The Trust Indenture Act limits the trustee, should it become a creditor of ours or of any guarantor, from obtaining payment of claims in certain cases or realizing certain property received by it in respect of those claims, as security or otherwise. The trustee is permitted to engage in certain other transactions as long as, if it acquires any conflicting interest and an event of default occurs, it either cures the conflict or resigns as trustee.

        For information regarding the acceleration of a portion of the principal amount of any original issue discount securities on the occurrence of an event of default, please read the prospectus supplement relating to the issuance of those securities.

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Defeasance or Covenant Defeasance of an Indenture

        Unless we say otherwise in a prospectus supplement, we will be able to discharge our obligations under debt securities and the obligations of any guarantor of debt securities at any time by taking the actions described below. The discharge of all obligations using this process is known as "defeasance." If we defease debt securities, all obligations under the series of debt securities that is defeased will be deemed to have been discharged, except for:

        We will also be able to free ourselves from certain covenants that are described in an indenture by taking the actions described below. The discharge of obligations using this process is known as "covenant defeasance." If we defease covenants under debt securities, then certain events (not including non-payment, enforceability of any guarantee, bankruptcy and insolvency events) described under "—Events of Default" will no longer constitute an event of default with respect to the debt securities.

        Unless we say otherwise in a prospectus supplement, in order to exercise either defeasance or covenant defeasance as to the outstanding debt securities of a series:

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Modifications and Amendments

        Unless we say otherwise in a prospectus supplement, we, any guarantor and the trustee may modify and amend either indenture with the consent of the holders of a majority in aggregate principal amount of the outstanding debt securities of all series affected by the modification or amendment; provided, however, that no modification or amendment may, without the consent of the holder of each outstanding debt security of all series affected by the modification or amendment:

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        Unless we say otherwise in a prospectus supplement, we, any guarantor and the trustee may modify and amend either indenture without the consent of the holders if the modification or amendment does only the following:

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        The holders of a majority in aggregate principal amount of the debt securities of a series outstanding may waive compliance with certain restrictive covenants and provisions of either indenture with respect to that series.

Original Issue Discount

        We may issue debt securities under either indenture for less than their stated principal amount. Such securities may be treated as "original issue discount securities" and they may be subject to special tax consequences. In addition, some debt securities that are offered and sold at their stated principal amount may, under certain circumstances, be treated as issued at an original issue discount for federal income tax purposes. We will describe the federal income tax consequences and other special consequences applicable to securities treated as original issue discount securities in the prospectus supplement relating to such securities. "Original issue discount security" generally means any debt security that:

Notices

        Unless we say otherwise in a prospectus supplement, we will send notices to holders of debt securities by mail to the holder's address as it appears in the register.

Governing Law

        Unless we say otherwise in a prospectus supplement, each indenture, the debt securities and any guarantees will be governed by the laws of the State of New York.

Concerning the Trustees

        We will identify any relationship that we may have with the trustee for a series of debt securities in a prospectus supplement with respect to particular debt securities.

        The holders of a majority in principal amount of all outstanding debt securities of a series (or if more than one series is affected thereby, of all series so affected, voting as a single class) will have the right to direct the time, method and place of concluding any proceeding for exercising any remedy or power available to the trustee for such series.

        If the trustee knows of an event of default that occurs (and is not cured), the trustee will be required to exercise such of the rights and powers vested in it by the applicable indenture and will use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. Subject to these provisions, no trustee will be under any obligation to exercise any of its rights or powers under the applicable indenture at the request or direction of any of the holders of debt securities unless they shall have offered to the trustee security and indemnity satisfactory to the trustee against the costs, expenses and liabilities that might be incurred thereby.

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SELLING STOCKHOLDERS

        The table below sets forth information about the selling stockholders' beneficial ownership of our common stock as of May 3, 2004. As of May 3, 2004, the selling stockholders beneficially owned, in the aggregate, 2,837,870 shares of our common stock. Frontenac Company VII, L.L.C., or Frontenac LLC, is the general partner of Frontenac VII Limited Partnership, or FVII and the general partner of Frontenac Masters VII Limited Partnership, or Masters. James E. Crawford, III, a member of our board of directors, is a member of Frontenac LLC. Walter C. Florence, a member of our board of directors, is affiliated with Frontenac LLC and is a limited partner of Masters. The address of each selling stockholder is 135 S. LaSalle Street, Suite 3800, Chicago, IL 60603.

        The number of shares of common stock outstanding as of May 3, 2004 was 8,468,616 shares. The number of shares of common stock outstanding after this offering includes shares of common stock being offered for sale by us in this offering. This table assumed no exercise of the underwriters' over-allotment option.

 
   Shares Beneficially
Owned Prior to
the Offering
    
   Shares Beneficially
Owned After
the Offering
Name of Selling Stockholder
   Number of
Shares
Beneficially
Owned (1)
   Percent
   Number of
Shares
Being
Offered
   Number of
Shares
Beneficially
Owned
   Percent
Frontenac VII Limited Partnership   2,702,705   31.3%   952,381   1,750,324   16.2%
Frontenac Masters VII Limited Partnership   135,165   1.6%   47,619   87,546   0.8%
(1)
As reported in the Schedule 13G/A filed on February 4, 2004.

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PLAN OF DISTRIBUTION

        As used in this prospectus, "selling stockholders" includes the successors-in-interest, donees, transferees or others who may later hold the selling stockholders' interests. In all cases, the selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale.

        We or the selling stockholders may sell securities on a negotiated or competitive bid basis to or through one or more underwriters or dealers. We or the selling stockholders may also sell securities directly to institutional investors or other purchasers or through agents. We or the selling stockholders will identify any underwriter, dealer or agent involved in the offer and sale of securities, and any applicable commissions, discounts and other items constituting compensation to such underwriters, dealers or agents, in a prospectus supplement.

        We or the selling stockholders may distribute securities from time to time in one or more transactions

        Unless stated otherwise in a prospectus supplement, the obligations of any underwriters to purchase securities will be subject to certain conditions and the underwriters will be obligated to purchase all of the applicable securities if any are purchased. If a dealer is used in a sale, we or the selling stockholders may sell the securities to the dealer as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.

        We or our agents, or the selling stockholders or their agents, may solicit offers to purchase securities from time to time. Unless stated otherwise in a prospectus supplement, any agent will be acting on a best efforts basis for the period of its appointment.

        In connection with the sale of securities, underwriters or agents may receive compensation (in the form of discounts, concessions or commissions) from us, from the selling stockholders or from purchasers of securities for whom they may act as agents. Underwriters may sell securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of securities may be deemed to be underwriters as that term is defined in the Securities Act, and any discounts or commissions received by them from us or from the selling stockholders and any profits on the resale of the securities by them may be deemed to be underwriting discounts and commissions under the Securities Act. We or the selling stockholders will identify any such underwriter or agent, and we or the selling stockholders will describe any such compensation paid, in the related prospectus supplement.

        Underwriters, dealers and agents may be entitled, under agreements with us or the selling stockholders, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act.

        If stated in a prospectus supplement, we or the selling stockholders will authorize agents and underwriters to solicit offers by certain specified institutions or other persons to purchase securities at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Institutions with whom such contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions but shall in all cases

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be subject to our approval. Such contracts will be subject only to those conditions set forth in the prospectus supplement and the prospectus supplement will set forth the commission payable for solicitation of such contracts. The obligations of any purchaser under any such contract will be subject to the condition that the purchase of the securities shall not be prohibited at the time of delivery under the laws of the jurisdiction to which the purchaser is subject. The underwriters and other agents will not have any responsibility in respect of the validity or performance of such contracts.

        The securities may or may not be listed on a national securities exchange or traded in the over-the-counter market (other than the common stock, which is quoted on The Nasdaq National Market). No assurance can be given as to the liquidity of the trading market for any such securities.

        If underwriters or dealers are used in the sale, until the distribution of the securities is completed, SEC rules may limit the ability of any such underwriters and selling group members to bid for and purchase the securities. As an exception to these rules, representatives of any underwriters are permitted to engage in certain transactions that stabilize the price of the securities. Such transactions may consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of the securities. If the underwriters create a short position in the securities in connection with the offerings (in other words, if they sell more securities than are set forth on the cover page of the prospectus supplement) the representatives of the underwriters may reduce that short position by purchasing securities in the open market. The representatives of the underwriters may also elect to reduce any short position by exercising all or part of any over-allotment option described in the prospectus supplement. The representatives of the underwriters may also impose a penalty bid on certain underwriters and selling group members. This means that if the representatives purchase securities in the open market to reduce the underwriters' short position or to stabilize the price of the securities, they may reclaim the amount of the selling concession from the underwriters and selling group members who sold those shares as part of the offering. In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases. The imposition of a penalty bid might also have an effect on the price of the securities to the extent that it discourages resales of the securities. We and the selling stockholders make no representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the securities. In addition, the representatives of any underwriters may determine not to engage in such transactions or that such transactions, once commenced, may be discontinued without notice.

        Certain of the underwriters or agents and their associates may engage in transactions with and perform services for us or our affiliates in the ordinary course of their respective businesses.

        In no event will the commission or discount received by any NASD member or independent broker-dealer participating in a distribution of securities exceed eight percent of the aggregate principal amount of the offering of securities in which such NASD member or independent broker-dealer participates.

        In addition to the manners of distribution described above, the selling stockholders may enter into hedging transactions. For example, the selling stockholders may:

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        A distribution of the common stock by the selling stockholders may also be effected through the issuance by the selling stockholders or others of derivative securities, including without limitation, warrants, exchangeable securities, forward delivery contracts and the writing of options.

        From time to time, the selling stockholders may pledge or grant a security interest in some or all of our common stock owned by it. If the selling stockholder defaults in the performance of its secured obligations, the pledgees or secured parties may offer and sell such common stock from time to time by this prospectus. The selling stockholders also may transfer and donate our common stock owned by it in other circumstances. The number of shares of our common stock beneficially owned by the selling stockholders will decrease as and when the selling stockholders transfer or donate their shares of our common stock or defaults in performing obligations secured by its shares of our common stock.


LEGAL MATTERS

        Certain legal matters in connection with any offering of securities made by this prospectus will be passed upon for us by Shaw Pittman LLP, a limited liability partnership including professional corporations.


EXPERTS

        The consolidated financial statements of SI International, Inc. included in SI International, Inc.'s Form 10-K/A for the year ended December 27, 2003 have been audited by Ernst & Young LLP, independent auditors, as set forth in their report included therein and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

        The financial statements incorporated herein by reference from our Current Report on Form 8-K filed with the SEC on January 28, 2004, as amended on the March 17, 2004 Form 8-K/A that relates to the financial statements of MATCOM International, Corp., have been audited by Grant Thornton LLP, independent public accountants, as indicated in their report with respect thereto, and are incorporated herein by reference in reliance upon the authority of said firm as experts in accounting and auditing.


WHERE YOU CAN FIND MORE INFORMATION

        We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the SEC's website at http://www.sec.gov. You may also read and copy any document we file at the SEC's Public Reference Room at:

        Please call the SEC at (800) SEC-0330 for further information on the operating rules and procedures for the public reference room.

        The SEC allows us to "incorporate by reference" the information we file with them, which means we can disclose important information to you by referring you to those documents. The information we incorporate by reference is an important part of our prospectus, and all information that we will later file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below as well as any future filings made with the SEC under Sections 13(a), 13(c), 14, or

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15(d) of the Securities Exchange Act, except that we do not incorporate any document or portion of a document that is "furnished" to the SEC (Exchange Act File No. 000-50080) from the date of the initial registration statement and prior to the effectiveness of this registration statement, and any filings made from the date of this prospectus until we sell all of the securities under this prospectus as supplemented.

        Copies of these filings are available at no cost on our website, www.si-intl.com. Amendments to these filings will be posted to our website as soon as reasonably practicable after filing with the SEC. In addition, you may request a copy of these filings and any amendments thereto at no cost, by writing or telephoning us. Those copies will not include exhibits to those documents unless the exhibits are specifically incorporated by reference in the documents or unless you specifically request them. You may also request copies of any exhibits to the registration statement. Please direct your request to:

        Our prospectus does not contain all of the information included in the registration statement. We have omitted certain parts of the registration statement in accordance with the rules and regulations of the SEC. For further information, we refer you to the registration statement, including its exhibits and schedules. Statements contained in our prospectus and any accompanying prospectus supplement about the provisions or contents of any contract, agreement or any other document referred to are not necessarily complete. Please refer to the actual exhibit for a more complete description of the matters involved. You may get copies of the exhibits by contacting the person named above.

        You should rely only on the information in our prospectus, any prospectus supplement and the documents that are incorporated by reference. We have not authorized anyone else to provide you with different information. We are not offering these securities in any state where the offer is prohibited by law. You should not assume that the information in this prospectus, any prospectus supplement or any incorporated document is accurate as of any date other than the date of the document.

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LOGO

SI International, Inc.

3,200,000 Shares
Common Stock


PROSPECTUS SUPPLEMENT
October    , 2004

Wachovia Securities

SG Cowen & Co.
Legg Mason Wood Walker
Incorporated

Stephens Inc.

SunTrust Robinson Humphrey



QuickLinks

ABOUT THIS PROSPECTUS SUPPLEMENT
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND MARKET DATA
PROSPECTUS SUPPLEMENT SUMMARY
The Company
Our Market Opportunity
Our Core Strengths
Our Growth Strategy
Recent Developments
The Offering
Summary Historical and Pro Forma Consolidated Financial Data
USE OF PROCEEDS
DIVIDEND POLICY
PRICE RANGE OF COMMON STOCK
CAPITALIZATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SELLING STOCKHOLDERS
UNDERWRITING
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
ABOUT THIS PROSPECTUS
RISK FACTORS Risks Related to Our Industry
Risks Associated with International Operations
Risks Related to Our Business
Risks Related to Our Common Stock and any Offering Made Pursuant to this Prospectus
SI INTERNATIONAL, INC.
USE OF PROCEEDS
RATIO OF EARNINGS TO FIXED CHARGES
DESCRIPTION OF EQUITY SECURITIES
DESCRIPTION OF DEBT SECURITIES
SELLING STOCKHOLDERS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION