8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 12, 2007

THE MANAGEMENT NETWORK GROUP, INC.

____________________________________________________

(Exact name of registrant as specified in its charter)

Delaware	0-27617	48-1129619
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

7300 College Boulevard, Suite 302, Overland Park, KS 66210

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (913) 345-9315

___________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On November 12, 2007, The Management Network Group, Inc. announced its results of operations and financial condition for the third quarter which ended September 29, 2007. The public announcement was made by means of a press release, the text of which is set forth in Exhibit 99.1 hereto.

In connection with the November 12, 2007 press release, we held a conference call with investors as described in the press release. In addition to the information in the press release, the following information was discussed on the call:

o Days sales outstanding (DSO) were under 50 days at September 29, 2007

o Top five and top ten customer concentrations were 60.7% and 78.8%, respectively

o Five new customers were added during the quarter

o Revenue per full-time equivalent employee (FTE) was approximately $360,000 in third quarter 2007

o Utilization for third quarter 2007 was 85%

o There were 268 employees at September 29, 2007

The information in this Item 2.02, and Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of TMNG under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act made after the date hereof, the information contained in this Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any filing of TMNG, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(D). Exhibits
EXHIBIT NUMBER	DESCRIPTION
99.1	Press Release dated November 12, 2007

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

THE MANAGEMENT NETWORK GROUP, INC.

(Registrant)

Date:	November 12, 2007	By:	/s/ Donald E. Klumb
			Donald E. Klumb
			Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description of Document
99.1	Press Release of Registrant, Dated November 12, 2007 announcing financial results for its Third Quarter Ended September 29, 2007

EX-99

Exhibit 99.1

[GRAPHIC OMITTED]

CONTACT:

The Management Network Group, Inc.	Brainerd Communicators
Janet Hall		Michele Clarke (Media)
Janet.Hall@tmng.com		clarke@braincomm.com
800.876.5329		212.986.6667
		Corey Kinger (Investors)
		kinger@braincomm.com
		212.986.6667

TMNG GLOBAL REPORTS 2007 THIRD QUARTER RESULTS

- Return to Profitability Driven by Organic Growth and Acquisitions -

Overland Park, KS – November 12, 2007 – TMNG Global (Nasdaq: TMNG) a leading provider of management consulting and software solution services to the global communications, media and entertainment industries, today reported financial results for its 2007 third quarter ended September 29, 2007.

Revenues in the third quarter of 2007 were $20.8 million, more than doubling revenues of $8.7 million in the prior year period. The third quarter 2007 results include $3.7 million of revenue from RVA Consulting acquired in August 2007 and $6.8 million of revenue from TMNG’s new Software Solutions segment that consists of the recently acquired Cartesian Ltd. Third quarter 2007 organic revenue growth from TMNG’s management consulting services segment approached 19% compared to the third quarter of 2006, driven by contractual commissions of $0.8 million related to the sale of a managed services client. During the quarter, TMNG’s gross margin was 49.5%, compared with 46.1% in the third quarter of 2006. The gross margin improvement reflected strong top-line growth and the inclusion of the higher margin RVA business.

TMNG Global reported net income of $504,000, or $0.01 per diluted share for the third quarter of 2007, compared to a net loss of ($3.1) million, or ($0.09) per diluted share in last year’s third quarter. GAAP results for the third quarter of 2007 include a gain of $0.5 million, or $0.01 per diluted share, related to the favorable resolution of a foreign tax withholding dispute. After adjusting for the tax-related gain, expenses related to the review of the Company’s option granting practices, depreciation and amortization expense, as well as non-cash expense related to share-based compensation, TMNG Global generated non-GAAP adjusted net income of approximately $2.3 million, or $0.06 per diluted share, during the third quarter of 2007. The comparable non-GAAP adjusted net loss for the third quarter of fiscal 2006 was ($1.8) million, or ($0.05) per diluted share.

The Company ended the third quarter with cash and short-term investments of $28.7 million, working capital of approximately $30.7 million, no long-term debt, and stockholders’ equity of $54.9 million.

“In addition to strong organic growth and a return to profitability, the acquisitions of Cartesian, RVA and most recently TWG have added scale, a greater diversity of services, and expanded client opportunities for our business as it moves forward,” said Rich Nespola, TMNG Global Chairman and CEO. “Our client base reflects an impressive mix of industry leaders and innovators across the wireless, cable, communications, media and entertainment industries. Penetrating that base with an expanded set of capabilities and further growing our client roster domestically and internationally are key goals in support of our efforts to sustain a growing and profitable business model.”

Financial Results for the Thirty-Nine Weeks Ended September 29, 2007

For the thirty-nine weeks ended September 29, 2007, revenues increased 101% to $51.0 million, compared with $25.4 million in the comparable year-ago period. During the thirty-nine weeks ended September 29, 2007, the Software Solutions segment contributed $17.7 million in revenues. TMNG’s gross margin was 46.5% during the thirty-nine weeks ended September 29, 2007, compared with 48.3% in the comparable year-ago period.

Net loss for the thirty-nine weeks ended September 29, 2007 was ($2.8) million or ($0.08) per diluted share, compared with a net loss of ($7.3) million or ($0.20) per diluted share in comparable year-ago period. GAAP results include the tax-related gain recorded in the third quarter of 2007, as discussed above. Non-GAAP net income, adjusted for the tax-related gain, expenses related to the review of the Company’s option granting practices, depreciation and amortization expense, as well as non-cash expense related to share-based compensation, was approximately $3.0 million, or $0.08 per diluted share, for the thirty-nine weeks ended September 29, 2007. The comparable non-GAAP adjusted net loss for the thirty-nine weeks ended September 30, 2006 was ($3.7) million, or ($0.10) per diluted share.

In addition to reporting net income (loss) and net income (loss) per share on a GAAP basis, this press release contains certain non-GAAP adjustments which are described in the schedule entitled “Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income (Loss)” that accompanies this press release. In making these non-GAAP adjustments, the Company took into account the impact of certain items that are generally not expected to be on-going in nature and certain non-cash expenses and benefits. Management believes the exclusion of these items provides a useful basis for evaluating underlying business performance, but should not be considered in isolation and is not in accordance with, or a substitute for, evaluating Company performance utilizing GAAP financial information. The Company believes that providing such adjusted results allows investors and other users of the Company’s financial statements to better understand TMNG’s comparative operating performance for the periods presented.

TMNG’s management used each of these non-GAAP financial measures in its own evaluation of the Company’s performance, particularly when comparing performance to the prior year’s period. TMNG’s non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Although TMNG’s management believes non-GAAP financial measures are useful in evaluating the performance of its business, TMNG acknowledges that items excluded from such measures may have a material impact on the Company’s net income (loss) and net income (loss) per share calculated in accordance with GAAP. Therefore, management uses non-GAAP measures in conjunction with GAAP results. Investors and other users of our financial information should also consider the above factors when evaluating TMNG’s results.

Conference Call

The Company will host a conference call at 5:00 p.m. ET today to discuss 2007 third quarter results. Investors can access the conference call via a live webcast on the company’s website, www.tmng.com, or by dialing 800-568-3651 in the United States or 706-643-3947 from international locations and referencing passcode 20264985. A replay of the conference call will be archived on the company’s website for one week. Additionally, a replay of the call will be available by dialing 706-645-9291, passcode 20264985, through November 19, 2007.

About TMNG Global

TMNG Global (NASDAQ: TMNG) is a leading provider of professional services to the converging communications industry. Its companies, TMNG, CSMG Adventis, Cartesian, RVA Consulting, and TWG Consulting, and its base of over 500 consultants, have provided strategy, management, and technical consulting, as well as products and services, to more than 1200 communications service providers, entertainment, media, and technology companies and financial services firms worldwide. The company is headquartered in Overland Park, Kansas, with offices in Boston, Chicago, London, New Jersey, New York, Shanghai and Washington, D. C.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, any statements that do not relate to historical or current facts constitute forward-looking statements, including any statements contained herein regarding expectations with respect to the Company’s future business, financial condition and results of operations. Forward-looking statements are subject to known and unknown risks, uncertainties, and contingencies, many of which are beyond the Company’s control, which may cause actual results, performance, or achievements to differ materially from those projected or implied in such forward-looking statements. Factors that might affect actual results, performance, or achievements include, among other things, the ability of the Company to successfully integrate recent acquisitions, conditions in the telecommunications industry, overall economic and business conditions, the demand for the Company’s services, the level of cash and non-cash expenditures incurred by the Company, technological advances and competitive factors in the markets in which the Company competes, and the factors described in this press release and in TMNG’s filings with the Securities and Exchange Commission, including the risks described in “Risk Factors” under Item1A in TMNG’s periodic reports filed with the SEC, including, but not limited to, its Annual Report on Form10-K for the fiscal year ended December30, 2006 and subsequent periodic reports containing updated disclosures of such risks. These filings are available at the SEC’s web site at www.sec.gov. TMNG does not intend to update these forward-looking statements and undertakes no duty to any person to provide any such update under any circumstances.

(Please see attached financial tables)

THE MANAGEMENT NETWORK GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

		Thirteen Weeks Ended						Thirty-nine Weeks Ended
	September 29,			September 30,			September 29,			September 30,
		2007			2006			2007			2006
Revenues	$	20,814		$	8,691		$	51,047		$	25,395
Cost of services (includes net non-cash share-based compensation expense of $191 and $142 for the thirteen weeks ended September 29, 2007 and September 30, 2006, respectively, and $124 and $513 for the thirty-nine weeks ended September 29, 2007 and September 30, 2006		10,514			4,687			27,308			13,129
Gross Profit		10,300			4,004			23,739			12,266
Operating Expenses:
Selling, general and administrative (includes net non-cash share-based compensation expense of $577 and $808 for the thirteen weeks ended September 29, 2007 and September 30, 2006, respectively, and $588 and $2,159 for the thirty-nine weeks ended September 29, 2007 and September 30, 2006, respectively		8,944			7,455			22,778			20,578
Special Committee investigation		103						2,451
Intangible asset amortization		1,057			215			2,149			566
Legal settlements					(62	)					(31	)
Total operating expenses		10,104			7,608			27,378			21,113
Income (loss) from operations		196			(3,604	)		(3,639	)		(8,847	)
Other income:
Interest income		387			528			1,185			1,609
Other, net		452						452			(1	)
Total other income		839			528			1,637			1,608
Income (loss) before income tax provision		1,035			(3,076	)		(2,002	)		(7,239	)
Income tax provision		(531	)		(5	)		(815	)		(39	)
Net income (loss)	$	504		$	(3,081	)	$	(2,817	)	$	(7,278	)
Income (loss) per common share:
Basic and diluted	$	0.01		$	(0.09	)	$	(0.08	)	$	(0.20	)
Weighted average shares used in calculation of net income (loss) per common share:
Basic		35,808			35,764			35,763			35,713
Diluted		36,140			35,764			35,763			35,713

THE MANAGEMENT NETWORK GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

		September 30,				September 30,
			2007				2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$		11,147		$		11,133
Short-term investments			17,525				27,200
Receivables:
Accounts receivable			14,671				5,063
Accounts receivable – unbilled			6,784				3,654
			21,455				8,717
Less: Allowance for doubtful accounts			(609	)			(378	)
			20,846				8,339
Prepaid and other current assets			2,266				2,257
Total current assets			51,784				48,929
Property and equipment, net			1,714				846
Goodwill			13,365				13,365
Licenses and identifiable intangible assets, net			12,696				1,189
Other assets			928				967
Total Assets	$		80,487		$		65,296
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade accounts payable	$		2,259		$		1,446
Accrued payroll, bonuses and related expenses			6,378				1,965
Other accrued liabilities			2,429				1,986
Income tax liabilities			1,461				271
Deferred revenue			5,327				33
Accrued contingent consideration			1,260
Unfavorable and other contractual obligations			1,956				649
Total current liabilities			21,070				6,350
NONCURRENT LIABILITIES:
Deferred income tax liabilities	$		1,860		$
Unfavorable and other contractual obligations			2,099				2,189
Other concurrent liabilities			516
Total noncurrent liabilities			4,475				2,189
Total stockholders’ equity:			54,942				56,757
Total Liabilities and Stockholders’ Equity	$		80,487		$		65,296

THE MANAGEMENT NETWORK GROUP, INC.

RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED NET INCOME (LOSS)

(unaudited)

(in thousands, except per share data)

	Thirteen Weeks Ended						Thirty-nine Weeks Ended
	September 29,			September 30,			September 29,			September 30,
	2007			2006			2007			2006
Reconciliation of GAAP net income (loss) to non-GAAP adjusted net income (loss):
GAAP net income (loss)	$	504		$	(3,081	)	$	(2,817	)	$	(7,278	)
Special Committee investigation		103			2,451
Depreciation and amortization		1,378			330			3,059			885
Gain on settlement of foreign withholding tax dispute		(452	)		(452	)
Non-cash share based compensation expense		768			950			712			2,672
Adjustments to GAAP net income (loss)		1,797			1,280			5,770			3,557
Non-GAAP adjusted net income (loss)	$	2,301		$	(1,801	)	$	2,953		$	(3,721	)
Reconciliation of GAAP net income (loss) per diluted common share to non-GAAP adjusted net income (loss) per diluted common share:
GAAP net income (loss) per diluted common share	$	0.01		$	(0.09	)	$	(0.08	)	$	(0.20	)
Special Committee investigation		0.00			0.06
Depreciation and amortization		0.04			0.01			0.09			0.02
Gain on settlement of foreign withholding tax dispute		(0.01	)		(0.01	)
Non-cash share based compensation expense		0.02			0.03			0.02			0.08
Adjustments to GAAP net income (loss)		0.05			0.04			0.16			0.10
Non-GAAP adjusted net income (loss) per diluted common share	$	0.06		$	(0.05	)	$	0.08		$	(0.10	)
Weighted average shares used in calculation of diluted net income (loss) per common share		36,140			35,764			35,763			35,713

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